Hammel v Radiocity Contact Centre CC

• Jurisdiction: South Africa
• Judge: Dlodlo J
• Judgment Date: 12 December 2008
• Docket Number: 13778/2008
• Court: Cape Provincial Division
• Hearing Date: 02 December 2008
• Citation: 2008 JDR 1525 (C)

Dlodlo J:

[1]

The Applicant in his capacity as a creditor brought an application for the winding up of the Respondent in terms of section 68 (c) of the Close Corporation Act 69 of 1984 (the Close Corporation Act) on the basis that the Respondent was unable to pay its debts. The Respondent did not dispute its indebtedness to the Applicant. On the contrary, the Respondent tendered payment of the sum of Five thousand nine hundred and six rands sixty seven cents (R5906.67), due at the time the application was launched, and the payment of the sum of One thousand six hundred and thirty six rand and seventy cents (R1636.70), due and payable on 10 September 2008. The Respondent did indeed pay both the abovementioned sums of money to the Applicant on 1 September 2008. Accordingly, as the Applicant received the above mentioned sum of money, by the time the application for the provisional winding up of the Respondent was heard on 3 September 2008, the cause for the application had been removed. In other words, the locus standi the Applicant had had in the matter, had been taken away. The issue

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for determination in the instant matter is simply which party is responsible for the costs incurred in the matter.

[2]

The Applicant is an adult male engineering student resident at 5 Bellwood Road, Fresnaye, Western Cape. The Respondent is a Close Corporation duly incorporated in terms of the Close Corporation laws of the Republic of South Africa and it has its registered address and principal place of business at Suite 20—201C, Waverly Business Park, Wyecroft Road, Mowbray, Cape Town. The Respondent conducts business as a producer of an in-house radio pursuant to mandates furnished to it by its clients. Its entire member's interest is owned by Marnus Flats who controls the Respondent's sister company in Australia. Much of the Respondent's business relates to work delegated to it by its Australia sister company. Mr Miller and Ms Ipser appeared before me for the Applicant and the Respondent respectively.

[3]

It was submitted on behalf of the Respondent that the general rule is that a party withdrawing proceedings is liable, as the unsuccessful litigant, to pay the costs of the proceedings. It was further emphasised that very sound reasons, such as dishonesty or fraud, must be shown before a defendant or respondent would not be entitled to his costs. Ms Ipser relied on the following cases for the aforementioned assertion, namely: Germishuys v Douglas Bespreingsraad 1973 (3) SA 299 (NKA) at 300D—E; Waste Products Utilisation v Wilkes (Biccari interested party) 2003 (2) SA 590 (W) at 597A-B; Reuben Rosenblum Family Investments v Marsubar 2003 (3) SA 547 (C) at 550 C-D. In Ms Ipser's submission, there exist no sound reasons in the instant matter

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which would justify the Respondent being deprived of its costs. It, however, needs to be mentioned hastily that the cases Ms Ipser referred to supra are factually distinguishable from the matter at hand. I may revisit this aspect latter on in this Judgment.

[4]

Another submission made on behalf of the Respondent is that it is not necessary for the Court to go into the merits of the application when determining liability for cost in a situation where an application has been withdrawn prior to being heard. In Ms Ipser's submission, the very fact that the application was withdrawn is conclusive as regards the issue of determining costs, save in those circumstances where the aforementioned good grounds exist which would justify the Court depriving the other party of costs. I was referred to Germishuys v Douglas Besproeingsraad supra at 303G—304A where the following, inter alia appears: "In Jenkins se saak,supra, het dit gegaan om die toekenning van koste en die houding wat die Hof moet inneem wanneer 'n saak op die meriete geskik is en die Hof daarna 'n bevinding op koste moet doen. In so 'n geval is dit vir die Hof dienstig om aandag aan die meriete te skenk om te sien wat 'n billike kostebevel sou wees…………Daar is na my mening 'n kernverskil tussen die posisie van 'n applicant wat sy saak skik op die meriete en dan vir die Hof om uitsluitsel oor koste vra en die posisie van 'n applikant wat sy eis terugtrek en dan probeer om 'n kostebevel teen hom af te weer.

Mnr. Zietsman se hele betoog dat daar na die meriete gekyk moet word om te sien of applikant op 'n sekere kostebevel geregtig is, al dan nie, gaan vir my in die onderhawige geval nie op nie. Vir my is die aangeleentheid duidelik. Applikant het 'n aansoek gerig teen die respondent en sy eise teen respondent laat vaar sonder enige

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uitsluitsel deur die Hof of sonder dat enige aansoek aan die Hof gerig is op die meriete. Respondent het geweier om toe te stem dat applikant nie die koste hoef te betaal nie; wat respondent geregtig was om te doen".

[5]

In the instant matter, however, in my view, it would virtually be impossible to reach a just decision without considering the merits of the application. I accept that there is some inconvenience in allowing the merits to be examined at any length, when only costs are at stake. This is at times unavoidable in cases settled on the merits without an agreement between the parties as to what must happen with regard to costs incurred. In Ms. Ipser's submission the Applicant did not really have a case made out against the Respondent in this matter. In her view, the Applicant brought this application with the sole purpose of merely embarrassing the Respondent. Accordingly, in Ms. Ipser's submission, the Applicant engaged himself in proceedings which tantamount to an abuse of the Court process. I deal with these submissions infra.

[6]

I agree with Mr. Miller that upon receipt of the payment which...