Kingsgate Clothing (Pty) Ltd v Edcon Limited

• Jurisdiction: http://justis.com/jurisdiction/166,South Africa
• Judge: E van der Schyff
• Judgment Date: 15 November 2021
• Docket Number: 57045/2020
• Hearing Date: 09 November 2021
• Court: Gauteng Division, Pretoria
• Citation: 2021 JDR 3001 (GP)

Van der Schyff J:

Introduction and background:

[1]

The applicants seek the review and setting aside of an award made by the fourth respondent on 22 September 2020 in terms whereof the fourth respondent effectively found that the applicants had not established a reservation of ownership over goods supplied by them to the first respondent prior to the first respondent being placed under business rescue. The applicants seek that the matter be referred to Justice Nugent for fresh determination, alternatively for such relief as the court deems appropriate. The fourth respondent filed a notice to abide.

[2]

The first respondent was placed under business rescue on 29 April 2020. A business rescue plan (the BRP) was published on 8 June 2020 and adopted on 22 June 2020. As a result, the BRP is binding on the first respondent and the applicants, although the applicants state that they voted against the adoption thereof. A dispute arose between the applicants and the second and third respondents as joint business rescue practitioners. The dispute revolved around the interpretation of the Edcon Merchandise Supply Agreement (EMSA) and whether it provided for a reservation of ownership in favour of the applicants. This dispute was referred to the fourth respondent for determination in accordance with clause 39 of the BRP. The applicants are not satisfied with the award of the fourth respondent.

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Van der Schyff J

[3]

The applicants aver in their founding affidavit that the fourth respondent committed gross irregularities and manifest errors in coming to a conclusion that is so wrong that it led to a 'patently inequitable result'. It is trite that the affidavits filed in motion proceedings must contain the pleadings as well as the evidence. It is thus necessary to consider the founding affidavit in order to determine the factual basis for the submission that gross irregularities and manifest errors were committed by the fourth respondent. To this end the applicants aver that:

i.

The fourth respondent failed and refused to have regard to binding Supreme Court of Appeal authority in respect of the interpretation of written documents. 'It is plain from the reading of the award that the fourth respondent had no regard to the authority.' He failed to - (a) follow the precepts of interpretation of written documents on the basis of text, context, material known to the parties and the purpose for the document; and (b) recognise the ex contrariis principle;

ii.

The fourth respondent's conclusion that the explanation tendered by the applicants in regard to the meaning to be ascribed to clause 9.4 of the EMSA should be rejected because it would amount to stating the obvious , equally applies to the conclusion reached that the meaning of 'ownership' should be ascribed to the word 'title' as used in clause 9.4 of the EMSA considering that it was not disputed that the applicants sold goods to Edcon on credit;

iii.

The fourth respondent committed a manifest error in concluding that the meaning of 'ownership' should be ascribed to the word 'title' in clause 9.4 of the EMSA considering that such an interpretation leads to an unintelligible meaning being ascribed to that clause;

iv.

A further manifest error committed by the fourth respondent in respect of the exercise of interpretation was the finding that a proper interpretation of clause 9.4 of the EMSA did not lead to the conclusion that could establish a reservation of ownership on the part of the applicants. In making this finding, the fourth respondent was unduly and impermissibly influenced by the wording that had been struck out in the letter of the first applicant to Edcon;

v.

The fourth respondent ignored the evidence of the expert Baard, which evidence was not contradicted in any manner, in regard to the South African

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Van der Schyff J

experience with the use of the word 'title' to represent 'ownership' in the clothing industry;

vi.

A further manifest error on the part of the fourth respondent is the fourth respondent's disregard for his obligation to interpret the EMSA in a judicious manner as required by law. The applicants further state that 'It is difficult to accept as a mere coincidence that the fourth respondent so failed considering that the second and third respondents, in an unauthorised supplementary submission to the fourth respondent, contended, albeit plainly incorrect, that the fourth respondent should not have regard to the contextual interpretation of the EMSA since the applicants had not raised this in their affidavits;

vii.

The fourth respondent was enjoined to call for further evidence and/or submissions and not to dismiss the applicant's claims;

viii.

The fourth respondent also made manifest errors in seeking to rely upon the meaning of the term 'ownership' being ascribed to the word...