Crossmoor Transport (Pty) Ltd v Absa Bank Limited and others

• Jurisdiction: http://justis.com/jurisdiction/166,South Africa
• Judge: Koen J
• Judgment Date: 04 September 2023
• Citation: 2023 JDR 3302 (KZP)
• Hearing Date: 25 August 2023
• Docket Number: 9953/23P
• Court: KwaZulu-Natal Division, Pietermaritzburg

Koen J:

Introduction

[1]

The applicant, Crossmoor Transport (Pty) Ltd (Crossmoor), seeks an interim interdict against the first respondent, Absa Bank Ltd (ABSA), in the following terms: [1]

‘1.

Pending the outcome of an action to be instituted by the Applicant against the First Respondent within 30 days:

1.1

The First Respondent is interdicted and restrained from:

1.1.1

Executing upon the Order granted by this Court under case number 8991/19 on 17 December 2021 (“the Court Order”);

1.1.2

Instructing the Second to Sixth Respondent or any other Sheriff, to attach and remove the assets/articles listed in paragraph 3 of the Court Order from any of the Applicant’s premises.

1.2

The Second to Sixth Respondents are interdicted and restrained from executing the Court Order.

2.

Should the Applicant not institute the action within 30 days of the date of this order, the order in 2.1 and 2.2 will lapse and be of no further force and effect.

3.

The costs of this application shall be costs in the action.’ [2]

[2]

The relief claimed is interdictory, akin although not entirely identical to an application for a stay of a court order in terms of this court’s inherent jurisdiction or pursuant to the provisions of rule 45A, but nevertheless aimed at staying execution on the entire court order, specifically any attachment and removal of the assets listed in paragraph 3 of the court order from any of Crossmoor’s premises. In the context of an

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application for the stay of execution of a court order the full court in MEC, Department of Public Works v Ikama Architects [3] remarked:

‘Courts enjoy constitutionally supported inherent jurisdiction to control their own processes, taking into account the interests of justice. It appears as if this inherent discretion operates independently of the provisions of Uniform Rule 45A. Execution must generally be allowed. This is so even in cases where a stay is sought pending the determination of proceedings still to be instituted. Courts will generally grant a stay of execution if the applicant demonstrates that real and substantial justice requires this or where an injustice will result if execution proceeds. The court’s discretion must be exercised judicially, but cannot otherwise be limited.’ (footnotes omitted)

[3]

The issue in this application is whether Crossmoor has satisfied the requirements for an interim interdict, [4] specifically whether it has proved a prima facie right, even if open to some doubt, to interdict the execution of the court order and to restrain the second to sixth respondents from removing the assets in paragraph 3 of the court order.

Background

[4]

The events material to this application are largely common cause, or not seriously disputed. They include the following:

(a)

Over time Crossmoor and ABSA [5] concluded various credit agreements, in terms of which Crossmoor was to acquire various assets/articles referred to in paragraph 1.1.2 of the relief claimed (the assets);

(b)

Crossmoor conducted itself in relation to those credit agreements in such a way that ABSA became entitled to and did cancel all the credit agreements;

(c)

Crossmoor was thereafter liquidated on 27 September 2021;

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(d)

On 18 November 2021 Crossmoor, its liquidators, ABSA, and other creditors of Crossmoor concluded an agreement (the settlement agreement);

(e)

The settlement agreement expressly provided inter alia that:

(i)

The liquidation order in respect of Crossmoor was discharged by consent (paragraph 1);

(ii)

On discharge of the liquidation order, a consent order attached to the settlement agreement (the consent order prayed) ‘would be made an order of court to replace the final liquidation order’ (paragraph 2);

(iii)

The consent order prayed would ‘be made an order of court by an application brought by ABSA’ exactly in accordance with its terms (clause 4), because of the practice in the High Court, KwaZulu-Natal Division regarding making settlement agreements an order of court (paragraph 5); [6]

(iv)

The terms of the recordal in the consent order prayed were ‘explicitly agreed upon and the terms and conditions of the recordal were verbatim enforceable as an agreement between the parties’, to be granted by the court, ‘and enforceable between ABSA and Crossmoor, as if specifically incorporated into the settlement agreement’ (paragraph 8);

(v)

ABSA and Crossmoor specifically agreed that the consent order prayed would be an agreement by ABSA to enter into the consent order prayed as a ‘payment arrangement of the debt in paragraph 2’ of the consent order prayed, ‘without novating the cancellation’ of the credit agreements, ‘which would remain cancelled’ (paragraph 9.1);

(vi)

ABSA’s ownership in the assets remains vested in those assets as is set out in the consent order prayed for the return of the assets (paragraph 9.2);

(vii)

The liquidation order would be replaced between Crossmoor and ABSA by the consent order prayed as a court order ‘for the return of the assets and a repayment arrangement of the debt’ (paragraph 9.3);

(viii)

Apart from the terms in the settlement agreement and consent order prayed, ‘the terms and conditions of the individual instalment sale [or credit]

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agreements between ABSA and Crossmoor would remain of full force and effect’ (paragraph 9.4);

(ix)

The settlement agreement provides, as set out in the consent order prayed, that the terms of the instalment sale agreements would only be amended and varied as set out in the consent order prayed. And further where there is ‘any discrepancy between the individual instalment sale agreements and the consent order prayed, the terms of the consent order would prevail’ (paragraph 11);

(x)

Paragraph 12 of the settlement agreement provides that:

‘The settlement agreement would constitute the whole of the agreement between the parties relating to the liquidation and consent order prayed, save to the extent provided therein, and no extension, amendment, leniency or any relaxation granted by any party in terms of the settlement agreement would be binding on any party, unless same was reduced to writing and signed by the parties involved and if necessary’;

(xi)

The settlement agreement further states that no ‘addition, variation, deletion or agreed cancellation of all or any clauses or provisions’ would have ‘any force or effect unless in writing and signed by the parties’ (paragraph 13);

(xii)

No waiver of any of the terms and conditions of the settlement agreement would be binding or effectual for any purpose unless in writing and signed by the parties. Any such waiver would be effective only in the specific instance and for the purpose given. Failure or delay on the part of any party in exercising any right, power or privilege would not constitute or be deemed a waiver thereof, nor would any whole or partial exercise of any right, power or privilege preclude any other or further exercise of any right, power or privilege (paragraph 14).

(f)

The consent order prayed attached to the settlement agreement:

(i)

Repeated that the ‘final liquidation order against [Crossmoor] was discharged and set aside’ (paragraph 1);

(ii)

Recorded that Crossmoor was ordered forthwith to deliver to ABSA the assets described in the second to fourth columns of paragraph 2 thereof (paragraph 2);

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(iii)

Recorded that Crossmoor agreed to make payment to ABSA in the amount of R134 544 725 together with interest on the accounts set out in paragraph 2, that is the various individual credit agreements, in the amounts as set out in paragraphs 3.1 to 3.29 (paragraph 3);

(iv)

Recorded that the execution of the order in paragraph 2, that is for the forthwith delivery of the assets forming the subject matter of the individual credit agreements, was suspended pending compliance by Crossmoor (or as long as Crossmoor complied) with its payment obligations in clause 3 of the consent order prayed (paragraph 4);

(v)

Further, should Crossmoor ‘fail to make any payment in terms of paragraph 3 within 5 days of notice to remedy such breach, the suspension of paragraph 2 [that is for the return of the assets] shall ipso facto lapse and the Sheriff be authorised to attach and deliver all assets in paragraph 2’ to ABSA (paragraphs 4.1 and as also mirrored in paragraph 5);

(vi)

The consent order further recorded that:

(aa)

Crossmoor was indebted to ABSA ‘in the amount of R134 544 725.00 plus interest for the financing of certain assets on instalment sale and lease agreements, as set out in paragraph 2’ (paragraph 10.1);

(bb)

Crossmoor had defaulted on the agreements with ABSA and ABSA ‘cancelled the agreements prior to institution of the liquidation application’ (paragraph 10.2);

(cc)

ABSA ‘agreed to enter into the agreement as a payment arrangement of the judgement debt in paragraph 2, without novating the cancellations of the agreements referred to in paragraph 2 above which remain cancelled’ (paragraph 10.3);

(dd)

ABSA reserved ‘ownership of the assets referred to in paragraph 2 above pending payment of the full outstanding balance on each asset’ (paragraph 10.4);

(ee)

Where Crossmoor defaults and fails to remedy one of the liabilities/payments this would constitute a default against all, ‘and

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the suspension of the order for repossession would automatically lapse and [ABSA would] be entitled to enforce the order for repossession of all the assets (paragraph 10.7);

(ff)

The consent order prayed would be the consent order as agreed upon ‘for return of the assets and a repayment arrangement of the debt’ (paragraph 10.8);

(gg)

Where any asset is fully paid, ABSA will release ownership of the asset...