Alliance Corporation Ltd v Blogg

• Jurisdiction: South Africa
• Judge: Wunsh B
• Judgment Date: 12 May 1999
• Citation: 1999 JDR 0344 (W)
• Hearing Date: 26 April 1999
• Court: Witwatersrand Local Division
• Docket Number: 99/8570

Wunsh J :

This matter came up in the urgent court on what was in effect the extended return day of a writ of arrest issued by the Registrar in terms of Rule 9 of the Uniform Rules of Court on 1 April 1999 for the apprehension of Barry Selwyn Blogg ("Blogg"), an incola of the area of this Court, at the instance of Alliance Corporation Limited, a company incorporated and having its registered office in the Isle of Man ("Alliance"). In form the proceedings were an application to set aside the writ, although Blogg's originating affidavit was called an answering affidavit. At the conclusion of argument I set aside the writ, reserving the question of costs, and said I would give the reasons for my order later. I gave the parties the opportunity until May 7 to make submissions on an aspect of the costs. My reasons follow and the full terms of the order I made will appear towards the end of the judgment.

On 9 September 1998 Blogg, Willie Kangisser ("Kangisser"), Alliance and Novotec (Pty) Ltd ("the company") concluded a written agreement for the sale by Blogg and Kangisser to Alliance of the share capital (owned by them as to 85% and 15% respectively) of the company and Blogg's claim against the company for R820 000. The agreement was implemented. The company was placed in final liquidation on 6 April 1999.

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Wunsh J

On 15 February 1999 Alliance wrote to Blogg implying that it had or would have claims arising from "alleged breaches of contract, fraud and serious accounting regularities ... tax evasion and breach of government exchange control regulations" and submitting "the first of what is anticipated to be six or seven statements of claim to which we require you to respond". This was a claim for R48 073,04. Four days later a further letter called for an adjustment of R10 226,31 and then on 22 February an amount of R32 251,92 was claimed. Alliance's attorneys sent Blogg a letter, running to over 16 pages, on 26 March 1999, in which they set out a number of alleged misrepresentations and breaches of warranties and stating that, by reason thereof, Alliance cancelled the agreement. Most of the complaints are based on alleged breaches of warranties which, in terms of the sale agreement, gave rise to a right to cancel only after a failure by the sellers to pay such sum of money as would remedy them within 14 days after being called upon to do so "and provided such liability to pay such sum is certain". This did not restrict Alliance's right to cancel on the ground of a misrepresentation if it established the requirements for that right. The attorneys laid all the breaches and misrepresentations at Blogg's door and exculpated Kangisser, who, it is said, has agreed to the cancellation of the agreement, although there is no evidence that he has repaid or tendered to repay the R110 000,00 he received out of the purchase price.

The letter of 26 March was responded to on 30 March by Edward Nathan & Friedland Inc ("Edward Nathan"), Alliance's attorneys at the time, denying the allegations, rejecting the cancellation and containing the following:

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"... we hereby give you notification that we are authorised to accept service of process directed at Mr Blogg at our offices".

(They are in the central business district of Sandton.)

A summons initiating an action by Alliance against Blogg, Kangisser and the company for repayment of the purchase price of R820 000,00 was signed by counsel and Alliance's attorneys on 30 March 1999 and issued by the Registrar on the same date. This reflected Blogg's address as 12 Chamonix, 16 John Avenue, Bedfordpark. A copy of the summons was annexed to an affidavit signed by John Carney, the managing director of Alliance, on its behalf which was submitted to the Registrar for the issue of the writ of arrest which he signed on 1 April 1999. Blogg was not arrested. An agreement was reached between Edward Nathan, on his behalf, and Alliance's attorneys that Edward Nathan would hold Blogg's passport and his airline ticket to Australia in trust pending the outcome of this application and that, if the application failed, they would continue to do so until the determination of Alliance's action. Since then Blogg has appointed his present attorneys in the place of Edward Nathan and it was agreed that, if the application failed, those attorneys would hold the passport and airline ticket in trust.

The ground upon which the application for the issue of the writ was based was that Blogg intended to flee the Republic of South Africa to avoid the payment of his alleged debt to Alliance and a debt to the company. Carney alleged that Blogg "was intending and making preparations to depart from the Republic of South Africa (for Australia) in order to avoid

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payment of his indebtedness". By the time the matter came before Fevrier AJ on April 22 there were, in addition to Carney's affidavit pursuant to which the writ was issued, 3 further sets of affidavits. The case was postponed to April 28 because Alliance contended that it wished to make some further investigations and to file a further replying affidavit and this it duly did on April 26, albeit over 6 hours late. There are a number of disputes in the 371 pages of affidavits and their annexures. When argument began on April 28 I asked Mr Blou why the summons had not been served. All that he could say was that Blogg's address reflected in it was the residence he had in the meantime vacated and that the Deputy Sheriff had not been able to find him there when he tried to execute the writ. He said, furthermore, that a plaintiff at those instance a writ is issued is usually given 30 days to issue the summons. By the end of argument he told me that the summons would be served on Blogg by delivery to his present attorneys whom he has authorised, in the place of Edward Nathan, to accept service.

In my view, it is not necessary for me to examine, except in order to determine the liability for costs and the scale thereof, the disputed factual allegations. The writ, which is in the prescribed form, required the Sheriff "to detain and bring (Blogg) before the court ... to answer the claim of (Alliance) for him to show cause why he should not be ordered to abide the judgment of the (court) or to furnish security for his further...