Klein NO and Another v Minister of Trade and Industry and Another

• Jurisdiction: South Africa
• Court: Transvaal Provincial Division
• Judge: Prinsloo J
• Judgment Date: 24 August 2006
• Citation: 2007 (1) SA 218 (T)
• Hearing Date: 24 August 2006
• Docket Number: 24281/04
• Counsel: S F Burger SC (with A Bam SC and M C Baloyi) for the applicants. P C van der Byl SC for the respondent. L I Vorster SC (with A Cockrell) for the intervening party.

Prinsloo J:

The parties and some background notes

[1] Corpcapital Ltd (Corpcapital) is the holding company of the Corpcapital group of companies. J

Prinsloo J

[2] Corpcapital initially launched this application under this case number in its own name, as applicant, against the respondent, A the Minister of Trade and Industry (the Minister).

[3] The application was launched on or about 15 September 2004.

[4] On 7 July 2005 Corpcapital was placed into liquidation by way of the registration of a special resolution in terms of the B provisions of ss 349 and 351 of the Companies Act, 1973 (the Act).

[5] On 8 December 2005 a notice in terms of rule 15(3) was delivered substituting the present applicants (liquidators) for Corpcapital as parties to this application.

[6] The only prayer (other than the prayer dealing with costs) C in the notice of motion reads as follows:

'1.

The respondent is directed forthwith, in terms of s 261(2)(a) of the Companies Act 61 of 1973, to direct the Registrar of companies to send a copy of the report of the inspectors (Adv John Myburgh SC and Prof Keith Prinsloo), who were appointed in D terms of s 258(2) of the Companies Act to investigate the affairs of the Corpcapital group of companies (''the inspectors' report''), to the registered office of the applicant.'

[7] On or about 5 November 2004 the intervening party, Mr Frangos, launched his application to intervene as an interested party (part A relief), coupled with an application for certain interdictory E relief (part B relief).

[8] It is convenient to quote the part B relief (in its amended form, as it was amended at a later stage):

'Part B F

Take notice that, at the hearing of the matter in case number 24281/02, alternatively, on a date to be assigned by the Registrar of this Honourable Court, alternatively, on the date indicated below if the matter is unopposed, Mr Frangos intends to make application to this Court for orders in the following terms:

B1.

Directing the Minister of Trade and Industry (''the Minister'') to make a decision, within 20 days from the date on which G the order is served on the Minister, regarding whether or not to reopen the investigation into the Corpcapital Group of Companies in terms of s 258(2) of the Companies Act 61 of 1973 (''the Investigation'') by:

(a)

Providing Mr Frangos with copies of all reports:

(i)

that were furnished to the inspectors by or on behalf of I Corpcapital Ltd in the course of the investigation;

(ii)

that were relied upon by the inspectors in preparing their report (''the inspectors' report''); and

(iii)

that have hitherto not been made available to Mr Frangos.

(b)

Directing the inspectors to afford Mr Frangos a fair opportunity to make representations and/or to present evidence to the inspectors in response to the reports referred to in (a) above.

(c)

Directing the inspectors to revise the report, should they consider it necessary to do so, in the light of the evidence and/or representations referred to in (b) above; and

(d)

Directing the inspectors to take such further steps as the Minister considers necessary. J

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B2.

Directing the Minister to communicate his decision referred to in B1 above to Mr Frangos and to the inspectors in writing as soon as A such decision has been made.

B3.

Interdicting and restraining the Minister from directing the Registrar of Companies to furnish a copy of the inspectors' report to any person, or from directing the Registrar of Companies to cause the inspectors' report to be published or printed, in terms of s 261(2) of the Companies Act 61 of 1973, until such time as the Minister has B made the decision referred to in B1 above and there has been due and proper compliance with such decision and any directions to the inspectors therein referred to.

B4.

Directing the Minister to pay the costs of this application on a joint and several basis, together with any other party which opposes the application, only in the event of the Minister opposing this application. C

B5.

Granting further and/or alternative relief.'

[9] Without intending to be disrespectful, but for the sake of convenience, I shall refer to the intervening party as 'Frangos'.

[10] In his founding affidavit Frangos describes his application as follows: D

'11.

It follows that this is an omnibus application in which I seek two distinct forms of relief.

11.1

In part A of the notice of motion, I seek leave to be joined as the second respondent in the Corpcapital application in order to oppose the relief claimed in that application. For the sake of convenience, I shall refer to this as ''the intervention E application''. Corpcapital has indicated that it will not oppose the intervention application.

11.2

In part B of the notice of motion, I seek to have the investigation reopened so that I might respond to the evidence tendered on behalf of Corpcapital that was not brought to my attention in the course of the investigation. For the sake of convenience, I shall refer to this as ''the mandamus application'' (although I F should point out that the relief sought includes a prohibitory interdict in prayer B2). If I were, in due course, to be granted leave to be joined in the Corpcapital application as a second respondent, I am advised that the mandamus application would amount, in effect, to a counter-application in the Corpcapital application. G

12.

I will address both of these applications in this affidavit. Although the intervention application should, as a matter of logic, be addressed first, the reason why I oppose the Corpcapital application is wholly dependent on the relief I seek in the mandamus application. In other words, the intervention application is parasitic on the mandamus application. I will, accordingly, address the mandamus application first and will thereafter turn to address the intervention application.' H

[11] I also find it convenient to quote the following two submissions made by Frangos in his founding affidavit:

'10.

It is the unlawful conduct on the part of the inspectors that has compelled me to launch the present application. The fundamental submission that I advance in this application is that the Minister is required to reopen the investigation so as to afford me an I opportunity to make representations to the inspectors in response to the evidence of Corpcapital that I have been denied sight of. This is a matter of procedural fairness. The purpose of this application is accordingly twofold, namely:

10.1

To allow me leave to intervene in the Corpcapital application in order to oppose the relief sought by Corpcapital; and J

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10.2

to direct the Minister to reopen the investigation in order to allow me access to the reports of those Corpcapital experts A that have not previously been made available to me so that I might comment on such reports.'

And the next submission:

'68.

I have indicated above that I remain supportive of the release of the inspectors' report as envisaged by s 261(2) of the act B in the longer term. I nevertheless oppose the release of the report in its present form because the inspectors have violated the requirements of procedural fairness. Simply put: If the mandamus application succeeds, then the Corpcapital application cannot succeed. It follows that I opposed the Corpcapital application by virtue of the fact that the relief sought therein is inconsistent with the relief C sought in the mandamus application.'

[12] The lengthy application of Frangos triggered an even lengthier paper train culminating in a record of some 673 pages. The Minister filed his answering affidavit, to both the Corpcapital application and the Frangos application, in January 2005. To this, Frangos filed a replying affidavit in February 2005, followed by D Corpcapital's replying affidavit in the same month. Still in the same month, Frangos filed a supplementary replying affidavit to what he described as 'the supplementary answering affidavit of Corpcapital'. In December 2005 Frangos filed what he described as a 'supplementary founding affidavit', and this prompted the Minister to file an answering affidavit, in January 2006, to the 'supplementary founding E affidavit' of Frangos. Not to be outdone, Corpcapital filed a supplementary affidavit in February 2006 and Frangos had the last word with a 'supplementary replying affidavit to the applicant's supplementary answering affidavit' in March 2006.

[13] When the matter finally came before me in May 2006, Mr Burger SC appeared for Corpcapital (by then officially F represented by the present applicants, the liquidators). He was assisted by Mr Bam SC and Mr Baloyi. Mr Van der Byl SC appeared for the Minister and Mr Vorster SC, assisted by Mr Cockrell, appeared for Frangos.

[14] At the commencement of the proceedings, the Frangos application to intervene was granted by me on an unopposed basis. G Procedurally, he then became the second respondent, although I shall continue to refer to him as Frangos.

The Frangos volte-face

[15] In The Shorter Oxford English Dictionary vol 2 at 3556, volte-face is defined as follows:

'The act or an instance of turning so as to face in the opposite direction. Chiefly, figuratively, a complete change of attitude, opinion or position in an argument.' I

[16] At the outset I was informed by counsel that the Frangos mandamus application would not be proceeded with before me. Instead, I would be asked, on behalf of Frangos, to dismiss the Corpcapital application and to postpone the Frangos mandamus application sine die.

[17] It is fair to point out that Frangos, through his attorneys, already J

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informed the other parties on 27 March 2006 (roughly a month before the hearing) that he would persist with the A joinder...