Assessing urgent applications: Compliance with rules?

Note: Footnotes omitted and emphasis added

[1] This urgent application was brought by the applicants on 26 May 2020, wherein they sought an order prohibiting the respondents from selling an immovable property (the Desert Star Property) pending the outcome of an action to be instituted by the applicants for the return of shares and loan account in the fourth respondent. At the time when the matter was heard, the respondents opposed the application on the merits and on the basis that the application was not urgent.

Parties

[2] The second applicant, Roderick Stainton (Mr Stainton), is a businessman, trustee, and a managing director of the company Rokwil Civils (Pty) Ltd (Rokwil), the first applicant. The first respondent is Robert Le Sueur (Mr Le Sueur), a businessman, and trustee of the Le Sueur Family Trust (LSF Trust). The fourth respondent is the company Desert Star Trading 549 (Pty) Ltd (Desert Star). What is evident from the papers filed is that the parties have been involved in various business ventures over the past years. One of the business ventures that is relevant to the proceedings is the industrial property development, Keystone Park, in Hammarsdale.

[3] On 20 May 2019, the applicants and the first to third respondents concluded a settlement agreement, which was subject to a suspensive condition. The settlement agreement provided, inter alia, for the sale and transfer of an immovable property owned by Keystone Park to the LSF Trust, and, the sale and transfer of 50 shares owned by Rokwil in Desert Star to the LSF Trust, in accordance with an agreement of Sale of Shares and loan account annexed to the settlement agreement. After the conclusion of the Share Sale agreement, Desert Star shares were transferred from the Rokwil Trust to the LSF Trust.

Rokwil also ceded its loan account in Desert Star to the LSF Trust. Mr Stainton resigned as sole director of Desert Star. Mr Le Sueur was appointed in his place and he took full control of the day-to-day affairs of Desert Star. It is common cause that the settlement agreement lapsed in July 2019, as a result of the non-fulfilment of the suspensive condition. Important to the dispute before this court is the fact that on or about 7 May 2020, the LSF Trust commenced with arrangements to sell the Desert Star Property, and Rokwil Civils as well as the Rokwil Trust were informed per e-mail of the pending auction of the Desert Star Property. The applicants seek an interim order prohibiting the sale of the immovable property that belongs to Desert Star.

[4] When the matter was heard, the issue of urgency remained alive and the respondents contended that the matter was not urgent. I shall deal with the issue of urgency first since it may be dispositive of the entire application. In order to decide whether the conduct of the applicants was dilatory, all of the papers filed and the principles that find application in dealing with urgent applications will be considered.

Urgency

[5] The applicants deal with urgency in paras 39 to 42 of the founding affidavit filed, which read:

‘39.   Applicants seek inter alia an urgent order interdicting the auction of the property, which sale is to take place on 3rd June 2020, pending the outcome of the balance of the relief, which is sought in a separate action instituted within 10 days.
40.   I submit that if the sale proceeds the Fourth Respondent, the First Respondent and Rokwil Trust as creditor and shareholder respectively, will be placed in an extremely prejudicial position.
41.   I submit that if this matter is not heard as one of urgency the property will be unjustly sold at a public auction on 3rd June 2020.
42.   That, of course, would be before I would be able to have the determination of the action on the merits for the return of the shares, and reinstatement of the loan account to the First Respondent, heard in the ordinary course.’ (My emphasis).

[6] It is trite that urgent applications must comply with rule 6(12) of the Uniform Rules of Court and with due regard to the various principles in respect of urgent applications.

[7] The respondents, in their opposition, submitted that the urgency is self-created, since the enquiry into urgency related to the time when the applicants became aware of the lapse of the Share Sale agreement and not when they became aware of the fact that a public auction of the property was to take place on 3 June 2020.

[8] Mr Lotz SC, for the respondents, referred to the version tendered by the applicants, that they received a letter on 22 July 2019 from the respondents’ attorney, informing them that the structured transaction (which includes the settlement agreement) had lapsed on 19 July 2019. They therefore have been aware of the status of the agreement since July 2019. Moreover, on 30 October 2019, the applicants’ attorney was informed in writing that the respondents’ attorney requested a conditional cancellation of the Share Sale agreement, and the conclusion of a fresh sale agreement.

The applicants did nothing to assert any of their rights. They waited until 26 May 2020 to launch this application, to be heard on 28 May 2020, despite being aware of their rights since 22 July 2019. It is clear that 10 months had passed before the applicants requested on 19 May 2020, an undertaking from the respondents not to sell the Desert Star Property. On these facts, the respondents argued that any urgency that might have existed is not genuine, but self-created. The respondents asked that the matter be struck off the roll with costs.

[9] In light of the aforesaid facts, I asked Mr Broster SC, for the applicants, to address me on the issue of urgency, since I am of the view that the applicants failed to disclose when they became aware that the settlement agreement had lapsed and that they ought to exercise their rights. On the papers, no explanation was given for failing to institute any action since 22 July 2019 until May 2020, nor were any reasons given why the urgent application should not be regarded as an abuse of process. Mr Broster had great difficulty justifying any urgency as the applicants failed to explain their inaction since 2019 to protect their rights.

[10] Should a party be allowed to sneak in through the back door of the court house, when it would be denied access though the front door? The Practice Directives in this Division governing the procedure to be followed in urgent applications is intended, in my view, to avoid an abuse of the process.

It is published in Erasmus Superior Court Practice and states:

‘10 Urgent Applications
10.1. Apart from a certificate of urgency (which practitioners are reminded is not a mere formality: in appropriate cases the signatories of such certificates may be ordered to pay costs de bonis propriis) which in specific terms records that the matter is of such a nature that relief has to be obtained forthwith and cannot await the ordinary motion court the following day, the following administrative requirements should be followed:
(a) As soon as an urgent application is in the pipeline, the registrar should be notified and an indication given as to when it is contemplated the application will be moved.
(b) This should be followed by a call every hour to inform the registrar and the duty judge apprised of the current position.
(c) If the urgent application falls away, the registrar should be told forthwith.
(d) If practitioners, in the absence of a duty registrar, go before a judge and do not obtain an order, they should immediately report this fact to the registrar.
10.2 In every urgent application (including the ordinary motion court) a draft order must be presented to the judge. If the draft is amended in chambers, practitioners must come to the assistance of the registrar’s typist in order to ensure that the order is in a form where it can be issued forthwith.
10.3 Where a rule nisi together with an interim interdict or other interim relief is sought as a matter of urgency the rule of practice in force is stated as follows:

“It is not permissible to grant interim interdicts without notice to the respondent unless there is a real danger that the giving notice will defeat the object of the interdict or it is wholly impracticable to give such notice. (It is not the practice of this Division to grant orders over the telephone save in very exceptional circumstances)”’ (Footnotes omitted).

[11] In Caledon Street Restaurants CC v D’Aviera, Kroon J summarised the rules, which pertain to urgent applications as follows:

‘Subject to the provisions of Rule 6(12) of the Uniform Rules of Court, the provisions of Rule 6(5) are peremptory. Rule 6(5)(a) provides that an application must be in a form “as near as may be in accordance with Form 2(a)”. In terms of Rule 69(5)(b) an applicant is obliged to nominate a day, at least five days after service on the respondent, on or before which the respondent must notify the applicant of intended opposition. Rule 6(5)(d)(ii) provides that within 15 days of such notification, the respondent, who is opposing, must file opposing affidavits. Sub-rule 5(f) provides for the application thereafter to the registrar for a date for the hearing of the matter, the date on which the registrar may be so approached depending on whether or not replying papers are filed by the applicant, which is also to be done within a prescribed time period.’

[12] I am mindful of the fact that there are various degrees of urgency as discussed by Majiedt JA in Cathay Pacific Airways Ltd & another v HL & another, and that the degree of urgency determines to what extent there may be a departure from the rules.

[13] In Commissioner, South African Revenue Services v Hawker Air Services (Pty) Ltd; Commissioner, South African Revenue Service v Hawker Aviation Partnership & others, Cameron JA stated the following in relation to urgency:

‘One of the grounds on which Patel J dismissed the applications was that at their inception they had lacked urgency. This was erroneous. Urgency is a reason that may justify deviation from the times and forms the Rules prescribe. It relates to form, not substance, and is not a prerequisite to a claim for substantive relief. Where an application is brought on the basis of urgency, the Rules of Court permit a Court (or a Judge in chambers) to dispense with the forms and service usually required, and to dispose of it “as to it seems meet” (Rule 6(12)(a)). This, in effect, permits an urgent applicant, subject to the Court’s control, to forge its own Rules (which must “as far as practicable be in accordance with” the Rules). Where the application lacks the requisite element or degree of urgency, the Court can, for that reason, decline to exercise its powers under Rule 6(12)(a). The matter is then not properly on the Court’s roll, and it declines to hear it. The appropriate order is generally to strike the application from the roll. This enables the applicant to set the matter down again, on proper notice and compliance.’ (My emphasis, footnotes omitted).

[14] On a procedural level, I agree with some of the sentiments written by Jones J in Vena & another v Vena & others para 8, which read:

‘Second, the judgment suggests that an order striking the application from the roll is an appropriate order because, in that event, the matter can be set down again after proper notice is given. It is indeed so that the applicant should, if so advised, not be deprived of the right to set the matter again. That is why I did not give judgment for the respondents but instead made an order dismissing the claim.

My understanding of an order for the dismissal of a claim in circumstances such as these is that, generally speaking, it is equivalent to an order for absolution from the instance, in which event it is open to an applicant to set the matter down again. In a given set of circumstances, it may be that dismissal may amount to a final judgment on an issue, with the consequence of res judicata. But that is not in the normal course where the case turns on a procedural point, and, I believe, it is not the case here.

The correct position, as I see it, is stated in Herbstein and Van Winsen The Civil Practice of Supreme Court of South Africa 5th ed at 684. The learned authors describe some of the orders that a court may make in the following terms:

“The court may grant judgment outright in favour of the either party, or it may give absolution from the instance or, what amounts to the same thing, dismiss the action” (my emphasis).

The term absolution from the instance is not usually used in motion procedure; the order is almost always to dismiss the application.

In support of the statement that dismissal of an action amounts to same thing as absolution from the instance, the learned authors cite

• • Cloete v Greyling (1907) 24 SC 57;
  • Municipality of Christiana v Victor 1908 TS 1117;
  • Eldred v Van Aardt and Bell 1924 SWA 79 82;
  • Becker v Wertheim, Becker & Leverson 1943 (1) PH F34 (A); and
  • Bulford v Bob White’s Service Station (Pvt) Ltd 1973 (1) SA 188 (RA) 193G.

See also Regering van die RSA v SA Eagle Versekeringsmaatskappy 1985 (2) SA 42 (O) 56J-57D.

There is a measure of reservation on the point in Purchase v Purchase 1960 (3) SA 383 (N) 385A where the order, however, was not the dismissal of the claim. The court made no order on an application but gave the applicant leave to apply on the same papers, if so advised, on proper notice to the respondent (see rule 6(6)). The weight of authority, including the Appellate Division authority of Becker v Wertheim Becker & Leverson supra, supports the statement in Herbstein and Van Winsen.

This element of the issue is not given consideration in the Commissioner, South African Revenue Services v Hawker Air Services (Pty) Ltd judgment. The judgment does not say, though it might imply, that [sic] claim in the case before it could not have been re-instituted once it was dismissed. It would seem to me that such a claim cannot be re-instituted only if dismissal gives rise to the matter being res judicata, as, for example, where an application for leave to appeal is dismissed on its merits. In my view the judgment of the Supreme Court does not intend to overrule what would appear to be an established line of decisions on the dismissal of claims generally, a line which has stood unquestioned for many years.’ (My emphasis).

[15] I am of the opinion that the approach adopted by the SCA in Commissioner, South African Revenue Services v Hawker Air Services supra, has to be followed.

To dismiss the application without deciding on the merits may well lead to a party raising a defence of res judicata when the claim is reinstated on the roll on proper notice. Not only is the approach adopted by the SCA in Commissioner, South Africa Reserve Services v Hawker Air Services practical, it leads to legal certainty and has to be followed.

[16] I align myself with the view expressed by Tuchten J in Mogalakwena Local Municipality v Provincial Executive Council, Limpopo & others para 64, which reads:

‘It seems to me that when urgency is in issue the primary investigation should be to determine whether the applicant will be afforded substantial redress at a hearing in due course. If the applicant cannot establish prejudice in this sense, the application cannot be urgent.
Once such prejudice is established, other factors come into consideration. These factors include (but are not limited to):

• whether the respondents can adequately present their cases in the time available between notice of the application to them and the actual hearing,
• other prejudice to the respondents and the administration of justice,
• the strength of the case made by the applicant and
• any delay by the applicant in asserting its rights.

This last factor is often called, usually by counsel acting for respondents, self-created urgency.’ (My emphasis).

[17] The Constitutional Court in New Nation Movement NPC & others v President of the Republic of South Africa & others, reaffirmed that the following factors should play a role in assessing urgency:

‘In assessing whether an application is urgent, this Court has in the past considered various factors, including, among others:
(a) the consequence of the relief not being granted;
(b) whether the relief would become irrelevant if it is not immediately granted;
(c) whether the urgency was self-created.’ (Footnotes omitted).

[18] In my view, it would be an abuse of process if the applicants sought preferential treatment and bypassed other litigants in the queue who wait their turn to be heard. Moreover, it will be an abuse if a party, in this instance the respondents, are expected to abandon everything they are doing to answer the case brought by the applicants in less than 48 hours, when on the facts of the matter, the respondents were entitled to more time.

[19] In light of the objection to the procedure used by the applicants, the onus was on them to persuade this court that non-compliance with the rules was justified on the grounds of urgency. The justification for the urgent application should have been supported by facts. The applicants have failed to state any facts or reasons why their claim is so urgent that they cannot be afforded sufficient redress at a hearing in due course. The alleged urgency is clearly self-created.

[20] Since the papers had to be read to determine the issue of urgency, there is the temptation to address the lack of urgency by issuing an appropriate costs order. This approach however of awarding costs orders does not instil any respect for the rules or practices of court. The mere fact that a colleague would need to read the papers again, if the matter returns, should not result in granting the applicants an unfair advantage in circumstances where it is not justified.

I agree with the approach of Kroon J in Caledon Street, supra, where he stated:

‘However, the attractiveness of finally disposing of the litigation should not be allowed to govern. The approach should rather be that there are times where, by way of non-suiting an applicant, the point must clearly be made that the rules should be obeyed and that the interest of the other party and his lawyers should be accorded proper respect, and the matter must be looked at to consider whether the case is such a time or not.’ (My emphasis).

[21] Weighing all of the above, I hold that the application is not urgent and must be struck from the roll for want of urgency.

Order

[22] It is ordered:

The application is struck from the roll for want of urgency with costs, such costs to include costs of senior counsel.