Simelane v Stealth Security( Pty) Ltd and Others (383 of 2014) [2014] SZHC 44 (20 March 2014)

IN THE HIGH COURT OF SWAZILAND

JUDGMENT

Civil Case No.383/2014

In the matter between:

SIKHUMBUZO M. SIMELANE Applicant

vs

STEALTH SECURTIY (PTY) LTD 1^st Respondent

ANITA C. HAYES-ROETS 2^nd Respondent

MANUELLA SIBERHUIS 3^rd Respondent

FIRST NATIONAL BANK (SWD) LTD

(MATSAPHA BRANCH) 3th Respondent

STANDARD BANK (SWD) LTD

(MATSAPHA BRANCH) 4^th Respondent

MASTER OF THE HIGH COURT 5^th Respondent

ATTORNEY GENERAL 6^th Respondent

Neutral citation: Sikhumbuzo M. Simelane vs Stealth Security (Pty) Ltd and 6 Others (383/13) [2014] [SZHC 44] (20^th March 2014)

Coram: MAPHALALA PJ

Heard: 14^th March 2014

Delivered: 20^th March 2014

For Applicant: Mr. M. Simelane

For Respondent: Mr. S. Nkosi

Summary: (i) Applicant has brought an ex parte Application for inter alia, prayer 3.7 to operate as a rule nisi as a preservation order.

(ii) The attorney for the Respondents, Mr. Nkosi in the main Application happened to be in court and as a result, opposed the granting of the order advancing various arguments as points in limine.

(iii) More, importantly that the dispute between the parties has been the subject to negotiations between the parties for a considerable period where the Applicant was represented by Mr. Madau an attorney of this court.

(iv) Secondly, that the Applicant who is an attorney before this court has acted unethically in the circumstances of the case.

(v) In the result, the court agrees with the arguments of the 2^nd Respondent that Applicant has acted in an unethical manner in pursuit of this Application brought ex parte in these circumstances.

Legal authorities cited

1. Venter vs Prest [1930] AC 558.

2. Shabangu Sithembile Dorah vs Mdluli Phathaphatha and 3 Others, High Court Case No.10/2002.

3. E.A.L. Lewis, A Guide to Professional Conduct for South African Attorneys, Juta, 1982 at page 290.

RULING

Introduction

[1] The Applicant has brought an ex parte Application before this court for inter alia, an order that the 1^st Respondent be placed under provisional judicial liquidation. This being the main Application.

Point in limine

[2] The attorney for the Applicant in the main matter appeared to be in court when the matter was called ex parte and raised a point in limine that the matter has been subject to negotiations between the parties and was ripe to be heard under the rubric of provisional judicial liquidation, that it is impossible to grant this order for the following reasons:

“a) The Applicant was until the 7^th March 2014, the attorney representing 1^st, 2^nd and 3^rd Respondents under civil case No.400/2013;

b) The 1^st, 2^nd and 3^rd Respondents in that case are the 1^st and 2^nd Respondents in the current case. The 3^rd Respondents in case No.400/2013 is the Application in this case.

c) Case No.400/2013 is an Application brought before this Honourable Court by one Ivan Groening for and an order, in inter alia, that the 1^st Respondent be wound up in terms of the provisions of the Company’s Act No.8 of 2009.

d) In terms of section 291 of the Company’s Act the winding up of a company shall be deemed to commence at the time of the presentation to the court of the Application for the winding up.

e) The Applicant with full knowledge of the above facts has commenced his own proceedings seeking judicial management of the same company or alternatively seeking that he be made an executive director by the court.”

[3] In paragraphs 6.2 to 7 various arguments are advanced which touches on the issues of conflict of interest and whether the conduct of the Applicant who was advancing arguments himself as an attorney and a litigant in the present Application is proper in the circumstances.

[4] The attorney for the Respondent then cited the case of Venter and Prest [1930] AC 558 where Lord Atkin as quoted by E.A.L. Lewis “in legal ethics” A Guide to Professional Conduct for South African Attorneys, Juta, 1982 at page 290 stated the following:

“Confidential communications passing between solicitor and client are doubly guarded in law... In the first place they are protected from disclosure whether by production of documents, or in oral evidence. This protection is part of the law of evidence... The right to have such communications so protected is the right of the client only. In this sense it is a privilege, the privilege of the client....”

[5] The attorney for the Respondent further contended that there are more instances in Applicant’s affidavit which contravene and breach the basic principle of confidentiality. That the Respondent shall outline these breaches in their answering affidavit. That despite having withdrawn as attorney for the 1^st and 2^nd Respondents, the Applicant’s duty not to disclose are not abated by such withdrawal. In this regard the attorney for the Respondent advanced arguments in paragraph 7.8, 7.9 to 7.10 and cited rules 7, 10, 11, 12, 13 and 14 of the BA International Code of Ethics as reproduced in Lewis (supra) at paragraph 317 to 319.

[6] It is contended to the Respondents that given the above submissions the Application for an interim order in terms of prayer 3.7 of the Notice of Motion should to be dismissed with costs.

The opposition

[7] The attorney for the Applicant also filed brief submissions in support of the interim relief on the 17^th March, 2014. However, I received his Heads of Arguments on the morning of the 18^th March, 2014.

[8] The first argument advanced for the Applicant is that Mr. Nkosi who appeared for the Respondents should not have been allowed to advance the argument which he did on account that he did not have a Notice of Appointment as an attorney of record in accordance with Rule 6(4) (11) of the High Court Rules. Further, it is contended for the Applicant that Mr. Nkosi had no right of appearance in the matter on account of the fact that he neither filed a Notice of Intention to oppose nor a Notice of Appointment as an attorney to appear and represent the 1^st Respondent in this matter. As such, Mr. Nkosi has no authority to act for the 1^st Respondent, whatsoever.

[9] The attorney for the Applicant then contended that in the event that the court is inclined to consider the arguments by Mr. Nkosi in court when opposing granting of the interim order he made submissions at paragraphs 4.1, 4.1.1, 4.1.2, 4.1.3, 4.1.4 up to 45 of his Heads of Arguments. I shall revert back to some pertinent arguments in my analysis and conclusions later on in this ruling. The attorney for the Applicant insisted that he be granted an interim order aforesaid.

The court’s analysis and conclusions thereon

[10] Having considered the arguments of the attorneys of the parties I am inclined to agree with the submissions advanced by Mr. Nkosi for the Respondents on all fronts.

[11] Firstly, on the first argument of the Applicant that Mr. Nkosi should not have been allowed to make any submissions on account that he has not filed a Notice of Appointment in accordance with the Rules of this court. I disagree with the Applicant argument on the simple basis that Mr. Nkosi is an attorney of record in the main matter. It would have been unjust to prevent Mr. Nkosi from advancing arguments for a proper resolution of the granting or otherwise of prayer 3.7. I must say a point in limine on a matter brought ex parte where he has been involved heavily in the negotiations between the parties.

[12] Secondly, I agree with Mr. Nkosi’s argument at page 10.1 of his Heads of Arguments that given that in any event there is animosity between the Applicant and the 1^st Respondent, the Applicant’s prayer 3.7 is impractical and will only grind the operations of the company to a halt. The Applicant does not deny the hostility and readily agrees as to its existence. How then can the company operate if the Applicant is enabled to refuse with his signature?

[13] Thirdly, it also appears to me as stated by the Respondent’s attorney in paragraph 10.3 thereof that this court has no power to grant such an order as this will change the status of the Applicant from that of non-Executive Director to Executive Director.

[14] Fourthly, this court agrees with the arguments of the Respondent’s attorney as advanced in paragraphs 10.4, 10.5, 10.6 and 11 of the Heads of Arguments.

[15] Lastly, it appears to me that the attorney for the 2^nd Respondent is also correct that until the final determination of the Application for winding up of the 1^st Respondent by this court the Applicant is estopped from continuing with this Application. Section 303(1) of the Company’s Act stipulates that:

“In any winding up by the court, all the property of the company concerned shall be deemed to be in the custody and under the control of the master until a provisional liquidation has been appoint.”

[16] The Applicant has failed either in his papers or in submissions before me to substantiate as to why the court should deviate from the current status of the 1^st Respondent and grant the Applicant powers which hitherto he did not have.

[17] In the result, for the aforegoing reasons the Application in terms of prayer 3.7 of the Notice of Motion is dismissed with costs.

[18] I rule further that the Respondents be allowed to file their opposing affidavit and the Applicant to file his replying affidavit in accordance with the Rules of this court and the matter thereafter be enrolled for hearing as a matter of urgency in respect of the other prayers.

STANLELY B. MAPHALALA

PRINCIPAL JUDGE