Ams Marketing Co (Pty) Ltd v Holzman and Another

• Jurisdiction: South Africa
• Judge: Leveson AJ
• Judgment Date: 12 April 1983
• Hearing Date: 18 February 1983
• Court: Witwatersrand Local Division

Leveson AJ:

This matter first came before GOLDSTONE J by way of an urgent application on 26 January 1983. For present purposes the relief sought, in summarised form, was as follows:

(a)

an order directing the first respondent to release the funds standing to the credit of the applicant (whilst in liquidation) with the second respondent;

Leveson AJ

(b)

an order directing the first respondent to deliver forthwith to the applicant all books of account (specified in a separate annex) and all assets and documents belonging to the applicant;

(c)

costs of the application.

A The second respondent has elected not to take part in these proceedings.

On the application of a director of the applicant, one P C Wellman, the applicant had been placed under provisional order of liquidation on 5 October 1982. Thereafter the Master of the Supreme Court had appointed the first respondent as provisional B liquidator of the applicant. During his period of administration the first respondent had collected certain debts owed to the applicant and deposited the proceeds in an account opened by him for that purpose with the second respondent. On 18 January 1983 the provisional order was discharged. When the matter was heard by GOLDSTONE J on the morning of 26 January 1983 only the applicant's founding affidavit was before him. C The first respondent's reply had not been filed. The learned Judge, by consent, granted the relief claimed in para (a) above and postponed consideration of the remaining relief to 28 January. However, it would seem that the funds were not released immediately because at 16h07 on 26 January the learned D Judge granted a further order in the following terms:

(a)

Second respondent is interdicted forthwith from making any payments out of account number 88986 (the account opened by the first respondent) in the name of AMS Marketing Co (Pty) Ltd unless upon the signature/s authorised by the board of directors of that company.

(b)

E Costs reserved.

The implication flowing from that order is not only that the first respondent had failed to comply with the earlier order, but also that some evidence must have been placed before the learned Judge to the effect that the applicant had some reasonable basis for believing that the first respondent F intended to withdraw funds from the account in breach of the order. However nothing further was said in this regard in any of the further affidavits filed by the parties, nor was I informed, at the hearing before me, of the facts which had given rise to the further order. Save to the extent stated below, I am therefore in no position to adjudicate on this point.

G On 28 January 1983 the matter again came before GOLDSTONE J. The relevant portion of the learned Judge's order reads as follows:

"By consent and without prejudice to either party's rights it is ordered that:

1. (a)

The first respondent is ordered to allow the applicant's attorneys and Mr Wellman to H inspect all documents in his possession relating to debtors of the applicant.

(b)

Such inspection to take place at the first respondent's attorneys' offices at 2.00 pm today.

(c)

The first respondent's attorneys will furnish copies of such of those documents as the applicant requires. Costs of making such copies are to be costs in the application.

2.

Costs of today are reserved."

Leveson AJ

At the hearing before me I was informed that the moneys in the bank account with the second respondent had been released in favour of the applicant and that the inspection of the documents had taken place. On the strength of these facts Mr A Rosenzweig, who appeared for the first respondent, made the point that the relief claimed had become academic and that the only issue for consideration was the question of costs. Citing Jenkins v SA Boiler Makers, Iron & Steel Workers & Ship Builders Society 1946 WLD 15; Giliomee v Cilliers 1958 (3) SA 97 (A) B and an unreported decision of NICHOLAS J in P G Wood Finance (Pty) Ltd v The Board Centre (Pty) Ltd delivered in this Division on 22 April 1982 (case No 9411/81), in each of which the relief sought had been aborted by subsequent developments, he suggested that I should cut the Gordian knot and simply make no order as to costs with respect to all proceedings which had taken place after 28 January 1983. This C approach was answered by Mr De Wet, who appeared for the applicant, with the contention that not all the books and documents of the applicant had been made available to it, that this issue was capable of adjudication on the existing papers and that an order for relief in this connection was still required. He further contended that the first respondent's D conduct had rendered an urgent application necessary, that the first respondent knew that the funds deposited with the second respondent were urgently required by the applicant and consequently that the first respondent should bear the costs of the application in connection with this aspect of the matter. In the alternative he contended that because adjudication was necessary on the question of the undelivered documents it was E convenient, at the same time, to adjudicate on the question of costs in connection with the claim for the release of the funds. It follows that, if the applicant's contentions are upheld, the attractive proposals put up by Mr Rosenzweig must be rejected.

Before consideration can be given to the merits of the F application there are certain preliminary matters which require attention. The first respondent applied to strike out certain matter in the applicant's replying affidavit and, in addition, to put in a further affidavit so as to answer new matter contained in the replying affidavit. These matters were not argued separately, it having been agreed between counsel that upon consideration of the merits of the application I G should decide whether the offending matters in the replying affidavit were to be admitted or not and whether, alternatively, regard should be had to the fourth set of affidavits.

The basis of the application to strike out was that in its replying affidavit the applicant had referred to discussions H Wellman had had with one Perkel and had annexed to that affidavit transcripts of tape recordings of those discussions. The first respondent's contention was that the statements made by Perkel were not admissible against him because Perkel was the applicant's auditor and there was no evidence that he was authorised to speak on behalf of the first respondent. The applicant contended the opposite, namely that Perkel was the first respondent's agent. Prior to the granting of the provisional order, Perkel, who is apparently an auditor by profession, had been engaged

Leveson AJ

by the applicant as a consultant (whatever that word may mean in the context of this case), but not as auditor. At one point in the affidavits Wellman had referred to Perkel as "the auditor" but the impression with which one is left is that the reference was to his profession and not to his relationship A with the applicant. The first respondent denies that Perkel was his agent. The question is material, so it was contended by both counsel, because a finding on this point determines which of the two parties was at fault in not attending a meeting that had been arranged or was to be arranged between them. According to the first respondent the books and records were in Perkel's B possession. That might lead to the suspicion that they were given to him by the first respondent for the purpose of writing up the applicant's accounts, but, even if this were so, it seems to me that the evidence falls short of establishing authority on the part of Perkel to speak on behalf of the first respondent on other matters. As the statements made by Perkel in the transcripts were not confirmed by him by affidavit I C must therefore hold that they are not admissible against the first respondent. That, however, does not preclude me from looking at the statements made by Wellman in the same transcripts in so far as they are admissible against the applicant. It should be added that in view of the decision to which I have come on the merits it is doubtful whether the D result would have been different had I admitted Perkel's statements.

The basis of the application to put in the fourth set of affidavits was the contention of the first respondent that the applicant's replying affidavit contains an abundance of new matter. Although I was not specifically informed so, having regard to the date of the first respondent's answering E affidavit, it is likely that the document was before GOLDSTONE J at the hearing of 28 January. Thereafter the order in regard to inspection of the books and documents was made. The inspection took...