California Spice and Marinade (Pty) Ltd v Haralambos; In re Bankorp v California Spice and Marinade (Pty) Ltd
| Jurisdiction | South Africa |
| Judge | Wunsh J |
| Judgment Date | 04 July 1997 |
| Docket Number | 96/31564 |
| Hearing Date | 25 June 1997 |
| Court | Witwatersrand Local Division |
Wunsh J:
The respondent is a banking institution which has instituted several actions against one or more of the applicants and a fourth party. The defendants in the actions are California Spice and Marinade (Pty) Ltd ("the company"), Fair O'Rama Property Investments CC ("the close corporation"), Haralambos Tsaperas ("Haralambos") and Patroklos Lucky Tsaperas, the brother of Haralambos ("Patroklos"). Haralambos is cited as "Harry Tsaperas" in one of the actions.
Haralambos, who signed the founding affidavit, is the sole shareholder and director of the company. In the affidavit he says he is "a member of the (close corporation)" and claims to be authorised to represent it in this application by a resolution of the close corporation which he has annexed. Although the heading of the resolution is "Minutes of the Members" (sic) of the close corporation, Haralambos was the only person shown to have been present and is reflected as the sole member.
The actions are:
Case 31564/91. This is against the company, as the principal debtor, and Haralambos, Patroklos and the close corporation, as sureties, for an amount of which the aggregate is R1 222 097,00, interest at 27,51%, compounded monthly in advance
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from 31 October 1991, and attorney and client costs. The company has delivered a counterclaim for R984 312,00 for damages, arising from the dishonour by the respondent of bills drawn on the company. According to the affidavit this action was "consolidated with four other actions instituted by the plaintiff against the defendant one of which has dropped away". These actions appear to be Case 33345/91 against the close corporation, Haralambos and Patroklos, Case 33346/91 against Haralambos and Case 33346/91 against Patroklos.
The affidavit, after recording that the trial was set down for 14 March 1995, continues:
A week before the hearing the Plaintiff filed a supplementary discovery affidavit in which it discovered approximately two thousand documents. An application was brought before the trial court for a postponement which order was granted and the Plaintiff was ordered to pay the costs of the postponement on the attorney and client scale.
In October 1995 the Defendants brought an application in the above Honourable Court for an order compelling the Plaintiff to properly answer the request for further particulars which order was granted. A reply to the request for further particulars for trial was filed by the (Plaintiff) more than a year later in November 1996. This reply consisted of five hundred pages and a further approximately four thousand documents were given to the Defendants' attorneys. All these documents relate to the various transactions that were conducted through the banking account.
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At the trial the history of each transaction will have to be canvassed as it will be necessary to show that at the time the Plaintiff dishonoured the bills of exchange referred to above the Defendants' account was in fact in credit and that such bills of exchange should not have been dishonoured.
When the principal matters (these were cases 31564/91 and 33345/91) were set down for trial I was advised by Melamed & Hurwitz Inc., the attorneys representing the Defendants in the principal matters, that they anticipated that the trial would last approximately two weeks and that counsel would require at least three weeks to prepare for trial. They advised me that they required an amount of R300 000,00 (Three Hundred Thousand Rand) as a deposit to cover counsel's fees and their fees to enable them to represent the Defendants. To date we have spent over R150 000,00 (One Hundred and Fifty Thousand Rand) in legal fees in respect of these actions.
The Applicants and my brother are not possessed of sufficient liquid funds tot be able to spend R300 000,00 (Three Hundred Thousand Rand) on litigation in the principal matters. In the circumstances, my brother and I decided to act personally in respect of the actions instituted against us and the First and Second Applicants took resolutions authorising and directing me to represent them in the actions brought
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under case nos. 31564/91 and 33345/91 respectively. The resolutions are attached as annexures ''HT-3" and "HT-4" respectively.
I am fully conversant with the facts of the principal matters. I and the First and Second Applicants are satisfied that in the principal matters I will be able properly to represent all of the applicant defendants. The defendants in the principal matters have terminated the mandate of Melamed & Hurwitz Inc. to represent them in the principal matters and this has been communicated to the Respondent in accordance with the Rules of this Honourable Court.
When I contacted Melamed & Hurwitz Inc. to terminate their mandate to represent the First and Second Applicants in the actions brought under case nos. 31564/91 and 33345/91 respectively, I was informed that there is a common law rule that juristic persons may be represented in the Supreme Court only by an advocate or a duly qualified attorney and that I might accordingly be refused permission to represent the First and Second Applicants in case nos. 31564/91 and 33345/91. However, Melamed & Hurwitz Inc. informed me further that the relevant common law rule may well conflict with the Constitution of the Republic of South Africa Act, 108 of 1996 ['the Constitution'].
After considering the advice received from Melamed & Hurwitz Inc., the First and Second Applicants decided to launch an application to
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establish their right to be represented by me in the principal matters and directed me to take all steps necessary to bring this application as is reflected in resolutions 'HT-1' and 'HT-2'.
The rule which is challenged in this application itself prevents me from representing the First and Second Applicants in this application. Having regard to this fact, to the complex legal nature of this application and to the anticipated cost of being represented by counsel in this application, on behalf of the First and Second Applicants I have instructed Melamed & Hurwitz Inc. to represent them in this application and to brief counsel to appear on their behalf in this application.
The termination of the mandate of Melamed & Hurwitz Inc. to represent the First and Second Applicants in the principal matters remains unaffected by their mandate in this application.
I have been advised and submit that the rule that a juristic person must be represented by a counsel or an attorney in civil proceedings before the Supreme Court violates the fundamental rights protected by section 34 of the Constitution, namely the right to have any dispute that can be resolved by the application of law decided in a fair public hearing before a court. Further legal argument in this regard will be addressed at the hearing of this matter.
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I have been advised and submit that the rule that a juristic person must be represented by a counsel or an attorney in civil proceedings before the Supreme Court violates the fundamental right to equality protected by section 9 of the Constitution on the following grounds:
It denies juristic persons equality before the law and equal protection of the law when they are involved in civil proceedings before the Supreme Court;
It discriminates unfairly between juristic persons and natural persons who are involved in civil proceedings before the Supreme Court;
It discriminates unfairly between juristic persons who are involved in civil proceedings before the Supreme Court and those that are involved in civil proceedings before the Magistrate's Court;
It discriminates unfairly between juristic persons who are involved in civil proceedings before the Supreme Court and those that are involved in criminal proceedings before the Supreme Court.
Further legal argument in this regard will be addressed at the hearing of this matter.
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I have been further advised and submit that:
this Honourable Court has the Constitutional authority to modify the rule that a juristic person must be represented by a counsel or an attorney in civil proceedings before the Supreme Court so that it accords with the Constitution, alternatively, to develop the said rule with due regard to the spirit, purport and objects of the Bill of Rights; and that
the said rule modified to accord with the Constitution, alternatively, developed with due regard to the spirit, purport and objects of the Bill of Rights, is that a company is entitled to be represented through its directors and a close corporation is entitled to be represented through its members in legal proceedings before the Supreme Court.
Further legal argument in this regard will be addressed at the hearing of this matter."
The trial was due to be heard on 10 March 1997 and this application was launched to be heard immediately before its commencement. However, the trial was postponed to 31 July 1997 and the application was brought in the motion court last week without any explanation of the inaction since March. The relief sought, the nature of which appears towards the end of this judgment, is designed to enable Haralambos to represent the company and the close corporation at the trial. Counsel appeared to
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argue the application on behalf of the applicants while counsel for the plaintiff merely held a watching brief and told me that the plaintiff did not oppose the orders claimed by the applicants. On the morning of the hearing I asked the Legal Resources Centre's Constitutional Litigation Unit to provide an amicus curiae. Because the request was made so late, all that could be arranged was that an attorney...
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