Rota Investments CC v Swarts

Plascon-Evans restated in the words of recently retired Justice Edwin Cameron in 2003, whilst still a judge of appeal in the Supreme Court of Appeal and before being elevated to the Constitutional Court.

See also National Director of Prosecutions v van Rensburg (7523/19) [2021] ZAWCHC 14 (5 February 2021) at para 11 per Gamble J citing, with approval,

See also National Director of Public Prosecutions v Zuma [2009] ZASCA 1; 2009 (2) SA 277 (SCA) per Harms DP at para 26:

“[26] Motion proceedings, unless concerned with interim relief, are all about the resolution of legal issues based on common cause facts. Unless the circumstances are special they cannot be used to resolve factual issues because they are not designed to determine probabilities. It is well established under the Plascon-Evans rule that where in motion proceedings disputes of fact arise on the affidavits, a final order can be granted only if the facts averred in the applicant’s (Mr Zuma’s) affidavits, which have been admitted by the respondent (the NDPP), together with the facts alleged by the latter, justify such order. It may be different if the respondent’s version consists of bald or uncreditworthy denials, raises fictitious disputes of fact, is palpably implausible, far-fetched or so clearly untenable that the court is justified in rejecting them merely on the papers.” 

Essence

Plascon-Evans restated and covers allegations or denials that are so far-fetched or clearly untenable that the court is justified in rejecting them merely on the papers.

Decision

(11147/2019) [2019] ZAWCHC 120 (13 September 2019)

Granted application for provisional sequestration and also ordered service on any trade union referred to in s 11(4) of the Insolvency Act and on employees (if any), in terms of s 11 2A(b) of the Insolvency Act.

Judges

P A Myburgh AJ.

Heard: 1 August 2019
Delivered: 13 September 2019

Related books

Darcy du Toit et al Labour Relations Law: A Comprehensive Guide 6ed 925 pages (LexisNexis 2015) at  482

Darcy du Toit et al Labour Law Through The Cases – loose-leaf service updated 6 monthly (LexisNexis 2019) 

Van Niekerk and Smit (Managing editors) et al [email protected] 4ed 612 pages (LexisNexis 2018) at 

Myburgh and Bosch Reviews in the Labour Courts 1ed (LexisNexis 2016) at 147, 441

Reasons

“[12] In my view, in addition to the cases quoted, it is instructive to have regard to the words of His Lordship Justice Cameron (referring to both the Room Hire and the Plascon-Evans cases), who held [in SA Veterinary Council v Szymanski] as follows:

‘It is an elementary rule of motion proceedings that an applicant cannot succeed in the face of a genuine dispute of fact that is material to the relief sought. Conflicting averments under oath cannot be tested on affidavit but only by oral evidence. Nearly eighty years ago Innes CJ explained that –

“(The) reason is clear; it is undesirable in such cases to endeavour to settle the dispute of fact upon affidavit. It is more satisfactory that evidence should be led and that the court should have an opportunity of seeing and hearing the witnesses before coming to a conclusion,”

Innes CJ added a significant qualification:

‘(Where) the facts are not really in dispute . . . there can be no objection, but on the contrary a manifest advantage in dealing with the matter by the speedier and less expensive method of motion.”

This qualification endorsed in the subsequent classic expositions on the subject led to a gradual but not inconsiderable relaxation of the criteria for determining whether despite a factual dispute relief can be granted in affidavit proceedings.

Most notably, Corbett CJ in Plascon-Evans Paints Limited v Van Riebeeck Paints (Pty) Limited amplified the ambit of uncreditworthy denials that would not impede the grant of relief. He extended them beyond those not raising a real, genuine or bona fide dispute of fact, to allegations or denials ‘are so far-fetched or clearly untenable that the court is justified in rejecting them merely on the papers’.

Quotations from judgment

Note: Footnotes omitted and emphasis added

Introduction

[1] In this application the applicant (‘Rota’) seeks a provisional order of sequestration of the estate of the respondents. The application is brought in terms of ss 9(1) and 10 of the Insolvency Act, No. 24 of 1936 (‘the Act’), in terms of which the court may grant a provisional order of sequestration in the event that:

  • (a) the applicant has a liquidated claim against the respondents of R100 or more;
  • (b) the respondents have committed an act of insolvency or are factually insolvent;
  • (c) there is reason to believe that it will be to the advantage of the respondents’ creditors if their estate is sequestrated.

[2] I deal with these requirements seriatim.

. . . . .

[9] While the defence of the respondents regarding the liquidated claim is somewhat opaque, it would seem that they rely on the non-fulfilment of a suspensive condition which was to provide motor vehicles for the R1,3 million loan. The argument is that, as Rota did not provide those vehicles, it cannot be said that the Swarts owe Rota the money.

[10] The question is whether this amounts to a legitimate defence. In this regard, counsel for Rota provided a succinct setting out of the legal principles which are of application.

With reference to the relevant case law, I highlight a number of these principles:

  • (a) facts must be clearly distinguished from ‘contention, submission or conjecture’, which are not facts even when made under oath;
  • (b) bona fide must be given its ordinary meaning of ‘genuine’, ‘honest’ and ‘in good faith’, while ‘reasonable grounds’ requires that the defence have an objectively sustainable, justifiable or substantial basis.

[11] Counsel referred to the well-known cases dealing with disputes of fact in motion proceedings with reference to be leading cases such as Room Hire Company (Pty) Limited v Jeppe Street Mansions and Others.

[12] In my view, in addition to the cases quoted, it is instructive to have regard to the words of His Lordship Justice Cameron (referring to both the Room Hire and the Plascon-Evans cases), who held [in SA Veterinary Council v Szymanski] as follows:

‘It is an elementary rule of motion proceedings that an applicant cannot succeed in the face of a genuine dispute of fact that is material to the relief sought. Conflicting averments under oath cannot be tested on affidavit but only by oral evidence. Nearly eighty years ago Innes CJ explained that –

“(The) reason is clear; it is undesirable in such cases to endeavour to settle the dispute of fact upon affidavit. It is more satisfactory that evidence should be led and that the court should have an opportunity of seeing and hearing the witnesses before coming to a conclusion,”

Innes CJ added a significant qualification:

‘(Where) the facts are not really in dispute . . . there can be no objection, but on the contrary a manifest advantage in dealing with the matter by the speedier and less expensive method of motion.”

This qualification endorsed in the subsequent classic expositions on the subject led to a gradual but not inconsiderable relaxation of the criteria for determining whether despite a factual dispute relief can be granted in affidavit proceedings.

Most notably, Corbett CJ in Plascon-Evans Paints Limited v Van Riebeeck Paints (Pty) Limited amplified the ambit of uncreditworthy denials that would not impede the grant of relief. He extended them beyond those not raising a real, genuine or bona fide dispute of fact, to allegations or denials ‘are so far-fetched or clearly untenable that the court is justified in rejecting them merely on the papers’.

[13] The Swarts, when dealing with this aspect, make some sparse allegations that motor vehicles were to be provided for the R1,3 million. However, as pointed out by Botha in his reply to this allegation, the name and make of the motor vehicles are not mentioned, and neither are the number or value of such vehicles.

[14] The paucity of the Swarts’ version in this respect is untenable and so far-fetched, that it does not give rise to a material dispute of fact, and thus a Court is justified in rejecting the allegations on the papers.

[15] In the circumstances, I find that Rota has discharged the onus of showing that it has a liquidated claim of R1,3 million in its favour.”