IN THE HIGH COURT OF SOUTH AFRICA

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					               FILING SHEET FOR EASTERN CAPE JUDGMENT

                                                 ECJ NO: 067/2005

IN THE HIGH COURT OF SOUTH AFRICA
(EASTERN CAPE DIVISION)


PARTIES: DOCKSIDE PANELBEATERS CC                APPLICANT

                         And

           DON PEDRO CC t/a DOCKSIDE             1st RESPONDENT
           PANELBEATERS

            MRS. RENIKA RUNGAN                   2nd RESPONDENT

            MR. R. L. RUNGAN                     3rd RESPONDENT

REFERENCE NUMBERS –
      Registrar: 1207/2004


DATE HEARD: 10 March 2005


DATE DELIVERED: 18 April 2005

JUDGE(S): SANDI J

LEGAL REPRESENTATIVES -
Appearances:
      for the Applicant(s): SH COLE
      for the Respondent(s): GS WERNBERG



Instructing attorneys:
      Applicant(s): NETTELTONS
      Respondent(s): NEVILLE BORMAN AND BOTHA




IN THE HIGH COURT OF SOUTH AFRICA
                                      2


(EASTERN CAPE DIVISION)

                                                      CASE NO: 1207/2004

In the matter between:


DOCKSIDE PANELBEATERS CC                              APPLICANT


Versus


DON PEDRO CC t/a DOCKSIDE                             1st RESPONDENT
PANELBEATERS

MRS. RENIKA RUNGAN                                    2nd RESPONDENT

MR. R. L. RUNGAN                                      3rd RESPONDENT


                                JUDGMENT



SANDI, J:



[1] This is an application for a spoliation order brought by the applicant,

Dockside Panelbeaters CC, for the return of its property set out in the notice

of motion and for an order interdicting the respondents from trading under, or

in any way utilising, the name Dockside Panelbeaters. The application is

opposed by all three respondents.



[2] Jacobus Phillipus Steinmann (Steinmann) is the sole member of Dockside

Panelbeaters CC, a Close Corporation which was incorporated on 31 October

2000. Its principal place of business is situated at 269 Point Road, Durban

and its branch at Unit 2, Frame Park, Phillip Frame Road, Chiselhurst, East

London.
                                     3




[3] The first respondent is Don Pedro CC, a Close Corporation trading as

“Dockside Panelbeaters” with its principal place of business at Unit 2, Frame

Park, Phillip Frame Road, Chiselhurst, East London. It was incorporated on

23 January 2003 and the second respondent, Mrs Renika Rungan, is its sole

member.



[4] The third respondent, Mr Ravendren Loganathan Rungan, is the second

respondent’s husband.



[5] The applicant’s case as deposed to by Steinmann is that in 2002 the

applicant opened a branch of its business in East London and the third

respondent was employed as its manager and was given full authority, by

resolution of the applicant signed by Steinmann, to sign all documentation to

bind the applicant in all its business dealings, and to sign cheques on the

applicant’s ABSA Bank account (annexure JPS2).



[6] The applicant leased business premises at Unit 2, Frame Park, Phillip

Frame Road, Chiselhurst, East London from where it commenced its

business. A written lease agreement, effective from 1 August 2002, was

entered into in April 2002 for a period of three (3) years terminating on 31

January 2005 (annexure JPS3).

[7] On 10 July 2002, the applicant entered into an agreement with ABSA Bank

in terms whereof it purchased the movable property set out in the instalment

sale agreement (annexure JPS4), and the invoice (annexure JPS5) issued by
                                        4


Aer-O-Cure CC. The applicant alleges that ABSA Bank retains ownership of

these goods until they have been paid for in full.



[8] Additional equipment and office furniture (as detailed in paragraph 10 of

the founding affidavit) for the running of the business were purchased by the

applicant.



[9] In October 2002, the applicant entered into a written hire purchase

agreement (annexure JPS6) with Wesbank in terms of which the applicant

purchased five Uno motor vehicles, for use as courtesy vehicles, for a

purchase price of R250 000-00.



[10] Furthermore, the applicant purchased an oxyacetylene gas set together

with a welder, four Pentium computers and one laptop computer from Bowen

Information Technology Services.



[11] The applicant avers that all of the property referred to above was duly

delivered to the applicant in East London from which time the applicant has

been in peaceful and undisturbed possession thereof.



[12] The third respondent commenced his employment as manager of the

East London branch of the applicant in July 2002.

[13] Steinmann avers that during the first six months the applicant’s business

branch in East London ran smoothly. However, later communications between

him and the third respondent became minimal and the third respondent did
                                      5


not respond to queries raised by him. Then Steinmann started receiving

summonses from creditors in East London in respect of applicant’s debts for

which he had stood surety. Legal proceedings against the applicant were also

commenced.



[14] Thereafter Steinmann consulted his Durban Attorneys, Messrs Garlick

and Bousfield who addressed a letter to the third respondent requesting a

meeting in order that concerns he had could be addressed.



[15] Rentals in respect of the leased premises were allowed by the third

respondent to fall into arrears. As a result, the lease was cancelled. On 21

January 2003, the first respondent was registered as a Close Corporation

(annexure JPS7) using the same address as that of the premises leased by

the applicant’s East London branch. The said lease was entered into between

applicant’s former landlord and the first respondent, who is described therein

as “Don Pedro CC t/a Dockside Panelbeaters” (annexure JPS8).



[16] In applicant’s replying affidavit Steinmann states that it was on 10 June

2003 that he became aware of the existence of the first respondent (Don

Pedro CC) when its documents were mistakenly faxed by Debtfin to

applicant’s Durban business. Though he could not get hold of the third

respondent to obtain whatever detail he could give in this regard, he had no

reason to believe that the third respondent was defrauding him.
                                         6


[17] In its replying affidavit applicant annexes an affidavit (JPS22) deposed to

by the second respondent on 27 August 2003 in which the following is stated:

              “I, Renuka Rungan, member of Don Pedro CC hereby state that the
              assets at Dockside Panelbeaters belong to Don Pedro CC and not
              Dockside Panelbeaters CC.

              Don Pedro CC had bought assets of Dockside Panelbeaters CC in
              January 2003. Also confirmed that liabilities were not taken over of the
              company.

              Dockside Panelbeaters trading at Unit 2 Frame Park is trading as
              Dockside Panelbeaters and registered as Don Pedro CC trading as
              Dockside Panelbeaters.

              Dockside Panelbeaters CC is a registered company trading in Durban.

              Please be advised that all necessary changes have been made with
              regards to the Receiver of Revenue, the landlord of the premises and
              so forth. Please also be advised that all the creditors have been
              notified as well.

              I also confirm that I am the sole member of Don Pedro CC and have
              never signed surety in my personal capacity or as a member of Don
              Pedro CC.” (sic)


[18] Applicant’s Durban Attorneys referred Steinmann to East London

Attorneys who, on 20 May 2004, addressed a letter (annexure JPS9) to the

second respondent. Amongst other things, the letter demanded the return of

the applicant’s assets. The letter states pertinently that Steinmann is the

holder of the entire member’s interest in Dockside Panelbeaters CC. It

annexes a copy of the schedule of equipment (annexure JPS4) setting out the

assets purchased by the applicant from ABSA Bank, and it asserts that the

applicant is the owner of the five Uno vehicles referred to above.



[19] In response to that letter, the Attorneys acting for the respondents replied

on 21 May 2004 (annexure JPS10). Therein the           respondents admit that the

applicant owns the equipment set out in annexure JPS4 but state that:
                                         7


             “once Dockside Panelbeaters CC (hereinafter referred to as “DPCC”)
             decided to part ways with the East London branch, Don Pedro took
             over all payments and notified Bankfin directly. We confirm that for all
             intents and purposes, Don Pedro continued to make payments in
             respect of the finance of the equipment and in fact Mrs Rungan’s
             brother made payment of the deposit of R153 045-00. We understand
             there is pending litigation in respect of this amount against DPCC.”


[20] The letter goes on to state that:

              “We place on record that no business was purchased by Don Pedro of
              DPCC. It was merely the purchasing of the assets and not the
              business.”


[21] With regard to the five Uno motor vehicles the respondents’ Attorneys

admit that the Uno vehicles were purchased by the applicant but state that:

              “We are advised that three of the motor vehicles have been
              repossessed by Wesbank and two are in Don Pedro’s possession.
              Client wishes to return the two outstanding vehicles to your client.”


[22] In the letter the respondents admit that Steinmann is the sole member of

the applicant. However, they deny that the applicant conducts business at

Unit 2, Frame Park, Phillip Frame Road, Chieselhurst, East London and state

that it is Don Pedro CC that is trading in those premises.



[23] Steinmann avers that, notwithstanding the undertaking made by the

respondents, the two Uno vehicles have not been returned to the applicant.



[24] Steinmann denies that any agreement of purchase and sale was ever

entered into between the applicant and the first respondent and that such

statement is false. He says that no payment was ever made in this regard.
                                         8


[25] I think it is convenient at this stage to refer to one aspect of the

respondents’ answering affidavit dealing with some of the assets claimed by

the applicant. They are listed in the applicant’s founding affidavit as follows:

                  “10.1.5 One black two-headed floor mounted compressor acquired
                  in June 2002 from Auctioniers in East London;
                  10.1.7 One 1000 litre evaporator tank specifically acquired and
                  constructed by Applicant for use with the said compressor;
                  10.1.8 Galvanised airline piping conveying compressed air from
                  the compressor to the workshop equipment;
                  10.1.13 Office furniture purchased from Waltons in East London
                  being:
                             10.1.13.1 One L-shaped three piece desk;
                             10.1.13.3 Three high back chairs.”


[26] The respondents’ answering affidavit deals with the above items as

follows:

              “30.2 The item in subparagraph 10.1.5 is admitted, and the applicant
              is free to uplift the said object.
              30.4 The item in subparagraph 10.1.7 is admitted, and the applicant is
              free to uplift the said object.
              30.5 The item in subparagraph 10.1.8 is admitted, although it is a
              permanent fixture on the shop floor, and would be difficult to remove.
              30.7 The item in subparagraph 10.1.13.1 and 10.1.13.3 is admitted,
              and the applicant is free to uplift the object. Item 10.1.13.3 was
              purchased by the first respondent and 12.1.13.5 by third respondent,
              in a cash transaction. Item 10.1.13.4.is unknown to me and the
              applicant is put to the proof thereof.”


Later, the third respondent filed a supplementary affidavit, in which he sought

to withdraw the admissions made and the undertaking to return the property

set out in paragraph [26] above. I shall deal with this supplementary affidavit

later in this judgment.



[27] At the request of the respondents made in the letter dated 21 May 2004

(annexure JPS10), a list of the assets claimed by the applicant was forwarded

to the respondents’ Attorneys. Steinmann avers that a meeting arranged

between the legal representatives of the parties for the purpose of verifying
                                         9


the applicant’s property was never held as the respondents refused to attend

the same. The applicant then launched the present proceedings.



[28] Steinmann says that he became aware of the second respondent’s

affidavit, quoted in paragraph [17] above, after 27 August 2003 and he avers

further as follows:

              “18.1 It now transpires that the First Respondent, through the agency
              of the Second and Third Respondents has caused the Applicant to
              cease trading in East London and the First, Second and/or Third
              Respondents have usurped control of the Applicant’s business and
              are now conducting the business under the name of the First
              Respondent.
              18.2 In unlawfully misappropriating the Applicant’s business, the First,
              Second and/or Third Respondents have taken possession of all of the
              Applicant’s movables referred to in invoice 607 from Aer-O-Cure, all of
              the five Uno motor vehicles referred to in the hire purchase agreement
              and the additional movables acquired by the Applicant referred to in
              paragraphs 1.9 to 1.25 supra.
              18.3 The First Respondent was formed without my knowledge and
              started trading as Dockside Panelbeaters, utilising the Applicant’s
              name, and with the equipment which was formerly in the lawful and
              undisturbed possession of the Applicant.
              18.4 The Applicant is being seriously prejudiced by the fraudulent
              conduct of Respondents who have acted in consort in depriving the
              Applicant of possession of the Applicant’s movable property
              unlawfully.”


[29] Steinmann says that the respondents dispossessed the applicant of its

property without its consent and without due legal process and that the

seizure and utilisation of applicant’s assets is unlawful.



[30] In their answering affidavit deposed to by the third respondent, the

respondents aver that Steinmann has failed to disclose the following facts:

              (a) In January 2001 Steinmann, as the sole member of the

              applicant trading in Durban, was indebted to the business of the

              third respondent’s father in the sum of R60 000-00.
                         10


(b) Steinmann approached the third respondent and offered him

a 50% share of the equity in applicant’s Durban business for the

purpose of attracting business from the Indian community. The

third respondent was what he refers to as a “silent partner” in

the applicant’s business. His identity was not to be disclosed in

any documents of the applicant’s business for fear that his

creditors who had instituted actions against his business, which

business had collapsed, would attach his interest in the

applicant.

(c) The third respondent’s father agreed to write off the

applicant’s debt of R60 000-00. The third respondent says that:

“In addition, I personally from my own funds provided the

applicant with an additional amount of R60 000-00 which was

used to pay off creditors.”

(d) The third respondent said that he managed the applicant’s

Durban business on a daily basis while Steinmann performed

mechanical work on vehicles brought to the applicant for repairs.

(e) In April 2002 the third respondent wanted to be paid his

unrecorded half share in the applicant’s Durban business as he

wished to leave Durban. To retain his association with the

applicant a branch of the applicant was opened in East London

at Unit 2, Frame Park, Phillip Frame Road, Chiselhurst and, by

further agreement with Steinmann, the third respondent would

“continue to be the owner of a 50% share of the equity of the

corporation, albeit that this would continue to be unrecorded in
                       11


terms of the arrangement previously concluded”. In support of

the averment that he was a “silent partner” in applicant’s

business the third respondent says that his late brother-in-law

Gopal Krishna Naidu, paid R150 000-00 to the applicant to

assist with the financing of the East London branch, R100 000-

00 to Aer-O-Cure for the purchase of the equipment referred to

in annexure “JPS5” and a further sum of R33 500-00 to assist

with the financing of the East London branch. In this regard

copies of three cheques dated 20 May, 8 July and 6 September

2002 are annexed. Two of the cheques are payable to Dockside

Panelbeaters while one is payable to Aer-O-Cure. He states

further that at his suggestion made in June 2002 Naidu was

made a 26% shareholder of the applicant in exchange for

providing finance to the East London branch though no formal

agreement was entered into nor an amendment of the

applicant’s founding statement made to reflect this. He states

that when Naidu disinvested from the applicant the following

agreement (annexure “B1” to the answering affidavit) was

entered into between Naidu and Steinmann:

             “I, Jacobus P. Steinmann, ID NO. 530523 5075
             080, hereby confirm transfer of ownership of the
             following vehicles to Gopal Krishna Naidu, ID NO.
             680519 506 008.
             1. 2000 Renault Clio, Reg. No. ND 16150, Engine
             No. D059900, Chassis No. VF 1BBOL of 235
             75169.
             2. 1977 Porsche 911, Reg No. FWH 349 T, Engine
             No. 6550029, Chassis No. 9117301508.
             I also further confirm that the engine on the 1977
             Porsche is in the process of being changed, due to
                            12


               mechanical failure. These repairs to be carried out
               by J. P. Steinmann.
                I also confirm that these vehicles are free of any
               encumbrances and that there are no further liens
               or monies owing on them.
               The registration documents are to be posted to Mr
               Gopal Krishna Naidu, ID No. 680519 5060 080,
               who will take ownership of these vehicles. These
               vehicles are handed over to G. K. Naidu in lieu of
               shares that G. K. Naidu holds in Dockside
               Panelbeaters.
               Signed at Umhlali on 21 July 2003.”


In answer to this averment Steinmann says he signed this

document to record how he was to repay the loan of R100 000-

00 made by Naidu. In terms of the document he was to hand

over to Naidu the two vehicles. He denies that Naidu held any

shares in the applicant.



Steinmann points out that the last sentence of annexure “B1”

refers to

       “Mr G. K. Naidu holding shares in Dockside Panelbeaters,
       which is the trading name of Don Pedro CC. It does not refer to
       shares held by Mr Naidu in my Close Corporation, namely the
       applicant. Mr Naidu insisted that the last sentence be included
       in the agreement and a plain reading of the last sentence
       indicates that it is linguistically unintelligible. The words “in lieu”
       mean “instead of”. If Mr Naidu already held shares in Don
       Pedro t/a Dockside Panelbeaters, how could he get vehicles
       handed to him instead of those shares? The final sentence is
       only intelligible if interpreted to mean that “instead of getting
       shares in Don Pedro t/a Dockside Panelbeaters, Mr Naidu is
       getting cars”.
(f) With regard to the machinery, equipment and furniture of the

applicant’s East London branch the third respondent states that

it was acquired in the following manner: his brother-in-law,

Naidu, who subsequently became an unrecorded shareholder in

applicant’s Durban business, had paid R13 000-00 and R6 500-
                        13


00 to the applicant on 5 October and 6 November 2001,

respectively. In return for his share in the equity of applicant’s

business Naidu paid further sums to the applicant totalling R290

500-00 on 20 May, 7 August and 6 September 2002. Of this

amount R100 000-00 was used as a deposit towards the

acquisition of the assets of the East London branch. The third

respondent personally paid an amount of R53 045-00 as further

deposit towards these assets. He confirmed that the five Uno

vehicles were purchased by the applicant but states that four of

them had been repossessed by the credit grantor while one was

damaged by a customer in an accident.

(g) Because the applicant’s Durban branch was unable to pay its

debts, creditors instituted actions against it. Suppliers of the

East London branch insisted on cash payments as applicant’s

cheques were frequently dishonoured. To keep the branch afloat

the third respondent borrowed money and sold some of his

personal assets to pay applicant’s debts. He received no

remuneration or any share of the profits from the applicant.

(h) With the knowledge and consent of Steinmann in or about

June 2002 the third respondent purchased tow trucks and

formed a sole proprietorship known as East Cape Tow Liners

which towed vehicles to applicant’s East London branch at a

standard fee of R1 500-00 per vehicle, payable by the applicant

to the third respondent. The third respondent would be entitled

to commission on the repair work undertaken by the applicant.
                         14


In addition he would receive the storage fees paid by the

insurers in respect of such vehicles.

(i) He said that during the period 30 September 2002 to 31

January 2003 he effected personal loans to the applicant which

together with the charges payable by applicant to East Cape

Tow Liners amounted to R433 102-33. According to him the

applicant is also indebted to the second respondent in respect of

loans made to it. In this regard the third respondent testifies that

“the final agreement concluded between Steinmann and I in

terms of which I took over ownership of the applicant’s entire

East London operation and assets and the credit correctly

therefore, reflected that the debt that had hitherto existed had

been cancelled.” He says further that “I acquired all the assets

and business of the East London branch of the applicant as

amplified below.” (my underlining)

(j) The third respondent says that when he visited applicant’s

business in Durban during December 2002 he loaned the

applicant an amount of R5 000-00 which was used to pay staff

salaries. At that point he realised that he had no future in his

relationship with applicant and demanded payment of his

unrecorded share of the business. In this regard he says the

following:

              “Since neither Steinmann nor the applicant had the
              liquid resources to effect such a payment, after
              discussion of the various options it was eventually
              verbally agreed by Steinmann and me in or about
              January 2003 that I would forthwith assume the total
              ownership of all applicant’s assets in East London and
              would assume responsibility for any outstanding
                                        15


                             liabilities attached to the acquisition of assets. Under
                             the agreement, the acceptance of the applicant’s
                             liabilities did not, however encompass any other debts
                             including trading debts due by the applicant to third
                             parties, whether in respect of its East London or
                             Durban operations. This notwithstanding, I did in the
                             event pay off certain other of the applicant’s debts in
                             order to avoid execution against assets in East London,
                             but it was agreed between Steinmann and I that he
                             would employ lawyers in Durban to deal with the other
                             debts due by the applicant to creditors.”


              (k) Steinmann placed an advertisement in the Natal Mercury on

              29 November 2003 and 1 December 2003 as well as in the

              Sunday Tribune of 30 November 2003 in which he disclaimed

              further liability in respect of the debts incurred by Don Pedro CC

              trading as Dockside Panel Beaters, East London.



[31] In reply, Steinmann confirms that he placed the advertisements in the

newspapers concerned “as a desperate and most necessary commercial

move to ensure that the third respondent did not incur any further debts in

respect of the applicant.”



[32] The third respondent avers that albeit that the first respondent

commenced its trading in January 2003, it held an anniversary celebration

which Steinman attended as an honoured guest. During the celebrations

Steinmann was referred to by him as his “former partner”. On that occasion

Steinmann stayed with his family in East London. In reply to this Steinmann

states that it is preposterous for the respondents to suggest that after a

passage of seven months, the first respondent celebrated an anniversary. He

admitted that he attended the anniversary celebration of the applicant held on
                                         16


the 1st of August 2003 and not that of the first respondent. He says that on 1

August 2003 he had not been made aware that the second respondent

alleged that she, as sole member of the first respondent, had bought the

applicant’s assets.



[33] Steimann sums up his reply to the respondents’ answering affidavit as

follows:

              “to put it another way, the third respondent comes into my business
              with nothing, after I have incurred all the set up costs, and thereafter
              he secures everything of my business for himself. Not only does he
              secure everything of my business but the founding statements are not
              amended in which event I, as sole member of the applicant, retain full
              tax liabilities for any profits made. I state that any prudent
              businessman would be keen to secure the loan account in his favour,
              if he were to secure half of my business. Even more strangely, not
              only does the third respondent secure my business but he
              immediately gives it to the second respondent with no documentation
              to support his version.”


[34] The third respondent has filed a supplementary affidavit seeking to

withdraw the admissions made in paragraphs 30.2, 30.4, 30.5 and 30.7 of the

answering affidavit. The contents of these paragraphs are set out in

paragraph [26] of this judgment. He says that the admissions have been

made in error as a result of a misunderstanding between him and his attorney.

He says that his instruction to his Attorney was that:

              “the applicant could have these back if it really wanted them provided
              that it paid me the value thereof on the basis that ownership of these
              items had passed to me in terms of the January 2003 agreement
              aforementioned. --- I made the statements to my former attorney to
              the effect that the applicant could have these items subject to the
              condition aforesaid as a layman without understanding the totality of
              the legal issues arising in this matter, in particular that there was no
              need to make such tenders.”


[35] During argument, Mr Wernberg, Counsel for the respondents, conceded

that there are anomalies in the respondents’ case as shown by the
                                         17


supplementary affidavit. He also conceded that the supplementary affidavit

does not provide a reasonable explanation for the withdrawal of admissions

made, particularly in the light of the letter written by the respondents’

attorneys on 21 May 2004. See South African Post Office Board Ltd. v

Chairperson, Western Cape Provincial Tender Board, and others 2001 (2) SA

675(C) 699E-G.



[36] I do not accept for a moment that the admissions have been made in

error as alleged by the third respondent. A cursory reading of his affidavit on

this issue leaves me in no doubt that he applied his mind to the admissions

made. The affidavit deals with each item claimed by the applicant and where,

for instance, the third respondent disputes the applicant’s claim in respect of

any particular item, he furnishes an explanation for the denial of such claim. In

regard to the applicant’s claim to the galvanised airline piping (para. 10.1.8)

he offers the return thereof with the rider that it being a permanent fixture, it

would be difficult to remove. Furthermore, in the letter written by his attorney

on 21 May 2004 the following is stated:

              “Kindly provide a list of the assets alleged to be owned by DPCC in
              order that we may take instructions in this regard”


Further it says the following:

              “We place on record that we request your client to provide a list of its
              alleged assets, and if so proven, client will return same forthwith.”


[37] If the assets have been acquired by the third respondent as a result of the

debt owed to him by the applicant there would have been no need to request

a list of the property owned by the applicant. There would have been no need

to make the undertaking that if applicant proved its ownership of the property,
                                        18


the respondent would return it forthwith. I would have expected the

respondents’ attorney to have said in the letter that all the property previously

owned or possessed by the applicant had become the property of the third

respondent by virtue of the agreement allegedly entered into in January 2003.



[38] Attorney Cristino Bernardo Reigo De Dios has also filed an affidavit in

which he seeks to explain that in the consultation he had with the respondents

on 20 May 2004 which resulted in him writing the letter dated 21 May 2004 he

“erroneously assumed that the “transfer” or “takeover” of the assets of the

applicant in East London was procured by Don Pedro CC t/a Dockside

Panelbeaters .” He concludes by saying that “any previous reference to a sale

by the applicant of its assets to the first respondent is accordingly incorrect.”



[39] This affidavit completely contradicts the affidavit made by Mrs Renika

Rungan, the sole member of the first respondent, on 27 August 2003, wherein

she says that “Don Pedro CC bought the assets of Dockside Panelbeaters CC

in January 2003.”



[40] I note that the first heads of argument filed by the respondents’ counsel in

this matter on 22 October 2004 were drafted on the basis that this is a

vindicatory action. However on 7 March 2005 respondents’ counsel submitted

a new set of heads of argument in which he withdrew this argument.



[41] It is clear from the papers filed by the applicant that it had not approached

this Court on the basis that it is the owner of the moveable property in
                                      19


question. It proceeded under the mandament van spolie, based on peaceful

and undisturbed possession of its property allegedly despoiled by the

respondents.



[42] Mr Wernberg submitted that the respondents concede that although the

applicant purchased the assets in question, possession thereof passed to the

third respondent in January 2003 and that such transfer had occurred with the

consent of the applicant pursuant to the unwritten agreement after which the

third respondent became the owner of the assets – delivery thereof having

been effected brevi manu to him. Counsel submitted further that the facts of

the present matter are analogous to the situation where a lessee of premises

subsequently purchases the same without relinquishing possession thereof.



[43] The respondents’ allegations are completely contradictory. The third

respondent alleges that he acquired the assets and business of the applicant

while Renika Rungan (second respondent) and the respondents’ attorney say

that it was the first respondent who purchased the applicant’s assets. The

further contradiction relates to whether it was the assets only that were

acquired or whether it was both the assets and the applicant’s business. Not

only do the second and third respondents contradict each other on this

aspect, the third respondent’s evidence alone is contradictory.



[44] Assuming that the third respondent acquired ownership of the business

and assets of the applicant, it does not make business sense why he would
                                         20


not take over the trading debts as well. I find this improbable in the

circumstances.



[45] Next Mr Wernberg submitted that the delay in bringing the application is

fatal to the applicant’s case. He argued that the delay of some twenty months

from January 2003 to the date the application was brought is not reasonable

and that the application should be dismissed on this basis alone.



In Jivan v National Housing Commission 1977 (3) SA 890 (W) at 892H–893C

it was held that:

              “In my view the remedy of a mandament of spolie, based on the
              maxim spoliatus ante omnia restituendus est, grew as a new and
              distinct concept of the Roman-Dutch law in South Africa over the last
              century and a quarter, and there is no authority to state categorically
              that the order cannot be sought if the applicant had allowed a year to
              elapse after the interruption of his possession occurred, nor could it be
              concluded that relief could not be refused on account of delay to an
              applicant who had not delayed for a full year to launch his application
              for a mandament of spolie.
              In my view the Court has a discretion to refuse an application where,
              on account of the delay in bringing it, no relief of any practical value
              can be granted at the time of the hearing of such application.
              In exercising this discretion I think the bar imposed after one year in
              respect of the mandament consequential upon complainte is a guide
              to modern practice. If an applicant delayed for more than a year
              before bringing his application for a mandament of spolie, there would
              have to be special considerations present to allow such applicant to
              proceed with his application, and conversely, if an application was
              brought within the period of one year after interruption of the
              possession, special circumstances would have to be present before
              relief could be refused merely on the ground of excessive delay. In the
              present matter the delay of eight months before the petition was
              launched is not so gross, nor had it such self-defeating consequences,
              that, on this ground alone, relief should be refused to the applicant.”


After referring to De Villiers v Holloway, (1902) 12 C.T.R 566 at p.569 the

Court said the following at 893H:

              “It is conceivable that the delay of an applicant to bring his petition
              either confirms or displays a state of mind in which the applicant
                                       21


             acquiesced in the alleged disturbance of his possession, and, in such
             an event, I am satisfied that he would not be entitled to a mandament
             of spolie.”


[46] First, I can find no justification for the submission made by Counsel that

the applicant allowed a period of some twenty months to elapse before

bringing this application. The applicant’s case is that in January 2003

communication between him and the third respondent became minimal. He

consulted Attorneys Garlick and Bousfield who addressed a letter to the third

respondent requesting a meeting. On 10 June 2003 he became aware of the

existence of Don Pedro CC when the latter’s documents were mistakenly

faxed to the applicant’s Durban office. On 1st August 2003 a celebratory party

was held in East London which Steinmann attended. After 27 August 2003 the

applicant was made aware of the affidavit deposed to by the second

respondent in which she stated that the first respondent had purchased the

applicant’s assets. In November 2003 the applicant placed advertisements in

the newspapers in which it disclaimed liability for any further debts which

would be incurred by the first respondent. In May 2004 there was an

exchange of correspondence between the parties’ attorneys in which the

respondents admitted that the assets claimed had been purchased by the

applicant and undertook to return some of them to the applicant. When the

respondents refused to attend a meeting to verify the applicant’s assets the

present application was launched on 25 August 2004.



[47] All this activity on the part of the applicant does not suggest to me that

the applicant delayed unreasonably in bringing the application nor is it an
                                         22


indication that the applicant had acquiesced in the dispossession of its

property.



[48] In any event if, on the respondent’s version, Steinmann attended the

celebratory party of 1 August 2003 as an invited guest and a former partner of

the third respondent, it is difficult to understand why the respondents’

attorneys did not mention this in their letter of 21 May 2004.



[49] The only issue for determination by this Court is whether in the

circumstances spoliation has taken place.



[50] In Yeko v Qana 1973 (4) SA 735 (A) at 739E-F the following was said:

              “In order to obtain a spoliation order the onus is on the applicant to
              prove the required possession, and that he was unlawfully deprived of
              such possession. As the appellant admits that he locked the building it
              was only the possession that respondent was required to establish. If
              the respondent was in possession the appellant’s conduct amounted
              to self-help. He was admittedly in occupation of the building with the
              intention of selling the stock for his own benefit. Whether this
              occupation was acquired secretly, as appellant alleged, or even
              fraudulently is not the enquiry. For, as Voet, 41.2.16, says, the
              injustice of the possession of the person despoiled is irrelevant as he
              is entitled to a spoliation order even if he is a thief or a robber. The
              fundamental principle of the remedy is that no one is allowed to take
              the law into his own hands. All that the spoliatus has to prove, is
              possession of a kind which warrants the protection accorded by the
              remedy, and that he was unlawfully ousted.”
[51] In Wille’s Principles of South African Law by Hutchison et al 8th Edition at

page 267 the following is said:

              “If a person has been deprived of possession by violence, fraud,
              stealth or some other illicit method, he may obtain from the court a
              mamdament van spolie, or spoliation order, commanding the
              dispossessor to restore the possession to himself, the applicant. It is a
              fundamental principle that no man is allowed to take the law into his
              own hands. Consequently if a person without being authorized by a
              judicial decree, dispossesses another person the court, without
              inquiring into the merits of the dispute, will summarily grant an order
              for restoration of possession to the applicant, as soon as he has
                                        23


              proved two facts; namely, that he was in possession, and that he was
              despoiled of possession by the respondent. The policy of the law is
              neatly summed up in the maxim, spoliatus ante omnia restituendus
              est.”


[52] Absent in the respondents’ answering affidavit is a denial that the

applicant was in peaceful and undisturbed possession of the property in

question as well as a denial that the respondents unlawfully deprived the

applicant of its possession of the property.



[53] As can be seen from the above, the respondents’ answering affidavits

seek to create a dispute regarding the ownership of the property in question

and the manner in which the property was acquired by the applicant. Nowhere

is it denied that the applicant was in possession of the said property at the

premises referred to in the application papers as Unit 2, Frame Park, Phillip

Frame Road, Chiselhurst, East London.



[54] Whatever claims the respondents may have against the applicant

regarding debts owed to it by the applicant, the 50% share of the equity

allegedly held by the third respondent in the applicant as well as the

applicant’s alleged indebtedness to the third respondent’s brother-in-law,

Naidu, are irrelevant for the determination of the issue of spoliation.



[55] It is significant to note, as set out in paragraphs [25] and [26] of this

judgment that the respondents tendered the return of some of the property

which is the subject of this application. In my view the admission made by the

respondents in this regard lends credence to the applicant’s case that it has
                                        24


been despoiled of its property. If the applicant’s assets were acquired by the

third respondent, with the applicant’s consent, it is difficult to understand why

the respondents would tender the return of some of those assets allegedly

legitimately acquired by them. In my view the tender to return the assets could

only have been made on the basis that the respondents were not entitled to

the possession of those assets. It is an admission that their possession of the

articles in question is unlawful. Such admission also negates the allegation

made that the assets were acquired from the applicant in the manner alleged

by the third respondent.



[56] The respondents seek to persuade me that: the third respondent was

offered 50% of the equity in the applicant; that he would not be reflected as a

member of the applicant (“a silent partner”); rather than being paid 50% of the

equity in the applicant’s Durban business, the applicant’s sole member,

Steinmann, asked the third respondent to set up an East London branch,

despite not having contributed financially in setting up that branch; the third

respondent would be owner of an “unrecorded” 50% equity of the branch,

thereafter applicant’s sole member divested himself of more of his equity to

one Mr Naidu, the brother-in-law of the third respondent; despite the third

respondent having had no funds, the applicant became indebted to the third

respondent in an amount of R433 132-00; because the applicant was unable

to pay this debt Steinmann agreed to give the third respondent total

ownership of all the assets of the       applicant’s East London branch while

Steinmann agreed to retain all the applicant’s liabilities.
                                        25


[57] The letter written by the respondents’ attorneys on 21 May 2004 does not

bear testimony to this arrangement. No mention is made in the said letter of

the respondent’s 50% shareholding in the applicant’s East London branch.

The letter states pertinently as follows:

              “Whilst client does not dispute that Mr J.P. Steinmann is the sole
              member of Dockside Panelbeaters CC, it is denied that DPCC
              conducts business from the leased premises situated at Unit 2, Frame
              Park, Phillipframe Road, Chiselhurst, East London. Don Pedro, as
              mentioned above, has entered into a lawful lease agreement with
              regard to the aforesaid premises and trades as such.”


[58] The letter states further as follows:

              “Upon the ceasing of trade by DPCC in East London, Don Pedro
              purchased the assets of DPCC. It is confirmed that Receiver of
              Revenue, the landlord as well as all creditors have been notified. This
              is in the light of Don Pedro purchasing the assets and continuing to
              trade in its own capacity in East London.”


[59] Contrary to the averment made by the third respondent that he owns an

unrecorded 50% of the equity of the applicant, this is an acknowledgement

that Steinmann is applicant’s sole member. Furthermore, had the applicant

been indebted to the third respondent, as alleged, the letter would have said

so.



[60] Regarding the agreement entered into between Steinmann and Naidu on

21 July 2003 (para. 30(e) above), all I can say is that the document does not

assist in the resolution of the dispute between the applicant and the

respondents. This is a collateral issue which I need not consider and decide

in this matter.
                                        26


[61] I am of the view that the facts alleged by the applicant in this matter are

the more probable in the circumstances of this case. Those alleged by the

respondents are so far-fetched and contradictory that I have no hesitation in

rejecting them and I can see no reason why this matter should be referred to

trial as has been submitted by Mr Wernberg. In Administrator, Transvaal, and

Others v Theletsane and Others 1991 (2) SA 192(A) at 197A-B the following

was said:

             “For my purpose it is enough to say that in motion proceedings, as a
             general rule, decisions of fact cannot properly be founded on a
             consideration of the probabilities, unless the Court is satisfied that
             there is no real and genuine dispute on the facts in question, or that
             the one party’s allegations are so far-fetched or clearly untenable as to
             warrant their rejection merely on the papers, or that viva voce
             evidence would not disturb the balance of probabilities appearing from
             the affidavits.”


[62] Regarding the five Uno vehicles Mr Cole, who appeared for the applicant,

conceded that it would be impossible for the respondent to comply with an

order for the restoration of their possession as four of the vehicles have now

been repossessed by the credit grantor and the fifth one permanently

damaged.



[63] Insofar as the application for an interdict against the use by the

respondents of the name Dockside Panelbeaters is concerned, it is common

cause on the papers that the first respondent is trading as Dockside

Panelbeaters from the very address which the applicant initially secured and

that Dockside Panelbeaters CC is the name by which the applicant is

registered and carries on business.
                                        27


[64] The applicant alleges pertinently that the first respondent has no authority

to use the said name and that it is doing so to gain commercial advantage and

to confuse creditors as to the true identity of their debtor. Nowhere is this

allegation denied by the respondents.



[65] In his affidavit the third respondent confirms that no agreement was

reached between him and Steinmann regarding the taking over by him of the

trading name “Dockside Panelbeaters”. However he avers that “this was a

clearly tacit/implied term of the agreement …“.



[66] In their attorneys’ letter dated May 2004 the following is stated:

              “We place on record that no business was purchased by Don Pedro of
              Dockside Panelbeaters CC (DPCC). It was merely the purchasing of
              assets, and not the business.”


If so, the respondents have no right to use the name of the applicant’s

business.



[67] In the circumstances I accept the applicant’s version that the first

respondent is trading from the very premises which the applicant secured

initially in 2002; the first respondent is utilising precisely the same trade name

which the applicant utilised when it commenced its business in East London,

and that the applicant at no stage ever authorised the first respondent to

utilise its trade name.
                                       28


[68] The respondent’s use of the applicant’s name constitutes an infringement

of the applicant’s rights and the applicant has satisfied the requirements for an

interdict.



[69] In the result, the application succeeds and I grant an order in terms of

prayers 1, 1.1 to 1.24, 2, 3 and 4 of the notice of motion.




_______________
B. SANDI
JUDGE OF THE HIGH COURT

				
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