Opposed
Application-Exception
CHIGUMBA
J:
This
is an exception filed on behalf of the plaintiff to the 8th
defendant's plea and counterclaim.
The
plaintiff's contention is that the 8th defendant's plea is vague
and lacks the averments necessary to sustain a defence.
The
plaintiff contends, further, that this exception goes to the root of
the 8th defendant's case, and is thus properly taken.
If
the plaintiff's contentions are correct then the exception will be
upheld.
The
court must ask itself whether the 8th defendant's plea and
counterclaim contain sufficient particulars to constitute a valid
defence and sustain a proper claim to the shareholding in the two
Property Companies which is the main bone of contention between the
parties. The Court must decide whether the exception is one of
substance which goes to the root of the claim, and whether upholding
the exception will dispose of the main matter without delving into
the merits.
The
background giving rise to the exception is that summons for a
declaratur was issued against the ten defendants on the 31st of March
2015. The plaintiff sought a declaratur that the appointment of
1st-7th defendant as directors in Beverly East Properties Private
Limited and Karoi Properties Private Limited (hereinafter known as
the two Property Companies) was illegal, null and void.
The
plaintiff sought the nullification of all CR14 forms and all other
statutory documents issued by the 9th defendant in confirming the
appointment of the directors.
The
plaintiff sought a second declaratur that its appointment of
directors to the two property Companies was lawful.
The
consequential relief sought was the reinstatement of the previous
directors in the two property Companies and an order directing the
9th defendant to do all things necessary to give effect to such
reinstatement.
In
the declaration to the summons, the plaintiff averred that it is a
representative of the trustees for the time being of the phoenix
trust in their official capacities. The 1st-8th defendants are all
private citizens. The 8th defendant is cited in his official capacity
as the curator bonis of the Estate of the late Brian Rhodes, who
created the plaintiff. The 9th and 10th defendants are cited in their
official capacities.
The
plaintiff holds the entire shareholding in the two property
Companies, which both own immovable property, in terms of a judgment
of this court HH424-13, and various other judgments of this court,
HC3848-11, HH52-2013.
The
1st defendant was one of the parties who had laid claim to the
shareholding in the two property Companies prior to the
determinations by this court that the entire shareholding vested in
the plaintiff.
As
a result of the claim, the plaintiff contended that the 1st defendant
unlawfully and fraudulently appointed himself and the 1st -7th
defendants as directors of the two property Companies and proceeded
to submit CR14 forms to the 9th defendant to confirm their
directorship.
The
legitimate directors of the two property Companies were removed after
the misrepresentation to the 9th defendant.
No
general meeting constituting a quorum of members as required in terms
of the Companies Act [Chapter 24:03] was convened to sanction these
appointments.
Confusion
now reigns amongst the plaintiff's tenants and other stakeholders
and presently there is no one in charge of the two property
Companies.
Unknown
persons have been collecting the rentals from the two property
Companies, to the plaintiff's prejudice.
On
16 April 2015, 8th defendant entered an appearance to defend to the
summons; the 1st defendant entered its appearance to defend on the
22nd of April 2015.
On
3 June 2015, the 8th defendant filed a plea to the plaintiff's
claim in which he averred that he is the Executor dative of the
Estate Late Brian James Jones; he holds the entire shareholding in
the two property companies on behalf of that estate, he was not part
of the court proceedings in which this court determined the
shareholding in the two property Companies in favor of the plaintiff
and is currently challenging those judgments HH424-13, HC617-15, it
is the plaintiff and the other defendants who are misrepresenting
facts to deprive the 8th defendant of its shareholding, it is
plaintiff which fraudulently and illegally created documents
purporting to donate the authorized share capital of the two property
Companies to itself.
The
8th defendant filed a counterclaim in which he averred that the two
property Companies each had two issued shares held by the late Brian
James Rhodes, the shares accrued to his estate on his death, the
plaintiff's claim to those shares is fraudulent and illegal, a
declaratur should be issued in his favor that the plaintiff
expropriated the issued shares in the two property Companies, and
that the donation of the shares was null and void.
A
second declaratur that the entire issued shares in the two property
Companies are held by the 8th defendant.
On
the 3rd of July 2015 the plaintiff filed an exception to the 8th
defendant's plea and counterclaim in which it averred that; the 8th
defendant's case is vague and lacks the averments necessary to
sustain a defence or an action, more particularly, that; the 8th
defendant failed to set out the legal basis on which he asserted that
the entire shareholding of the two property Companies is held by the
estate late Brian James Rhodes.
The
plaintiff averred that the 8th defendant failed to set out which
facts it misrepresented to deprive the estate of its shareholding, or
of the date when the plaintiff became aware of this fact. Further the
8th defendant failed to identify the person who is alleged to have
fraudulently and illegally created documents purporting to donate the
authorized share capital of the two property Companies to the trust.
The 8th defendant is challenged to specify the date on which the
shares were allocated to the late Brian James and to specify how the
plaintiff fraudulently and illegally expropriated the issued shares
and how plaintiff expropriated the issued shares.
It
is common cause that the plaintiff served a letter of complaint on
the 8th defendant on the 29th of June 2015, in accordance with the
requirements of rule 40 of the rules of this court, and that the 8th
defendant did not respond to or attend to the complaints raised in
that letter.
Turning
to the law that applies in cases such as this one, it is well
established that a litigant must know the case that it needs to meet.
See Trinity Engineering Private Limited v CBZ1,
which relied on Timesecurity Pty Ltd v Castle Hotel Private Limited2
as authority for this proposition.
In
one of my own judgments Ritenote v A. Adam & Co3
the circumstances in which an exception may properly be taken were
said to be where the claims are not clear or concise in fact and in
law.
The
plaintiff's summons and declaration must disclose sufficient
particularity, and a cause of action which is appropriate at law and
which is not contradictory or mutually destructive.
The
plaintiff contends that the failure to set out the basis on which 8th
defendant avers that the late Brian James Rhodes held the entire
shareholding in the two property Companies constitutes insufficient
particularity to establish the 8th defendant's defence and cause of
action in its counterclaim.
The
same complaint applies to the rest of the pleadings that the
plaintiff excepts to.
Heads
of argument on behalf of the 8th defendant were filed on the 2nd of
November 2015. One of the main points of law raised was that the 8th
defendant has an application filed in HC617-15 and set down for
hearing on 20 November 2015 involving the same parties in which
rescission is sought, of the judgment which gave the plaintiff rights
over the two property Companies.
It
was contended that the Master of the High Court is aware of the
plaintiff's fraudulent claims and that he appointed the 8th
defendant to investigate these claims on behalf of the estate.
8th
defendant contended that the summons is not properly before the court
because they refer to a curator bonis which ceased to exist in 2014.
The summons is excipiable on the basis that they disclose no cause of
action against the 8th defendant.
I
find myself in agreement with the proposition put forward on behalf
of the 8th defendant that, when dealing with matters of exception, if
evidence can be led which can disclose a cause of action on the facts
as alleged in the pleading, then that pleading is not excipiable. See
Mckelvey v Cowan N.O.4.
See
also Levenstein v Levenstein5,
where it was held that;
“No
doubt, these are proper questions, but recognition of that fact does
not mean that an exception can be founded upon every questionable
allegation; the embarrassment must be such that it cannot be removed
by a request for further particulars. (see the remarks of DAVIS J, in
Kahn v Stuart & Ors 1942 CPD 386 @ p392).
In
my view there should have been a request for further particulars; had
that been done the plaintiff's difficulties might well have
disappeared”.
A
declaration must state lucidly each of the facts constituting the
plaintiff's cause of action. See Koth Property Consultants CC v
Lepelle-Nkupi Local Municipality6.
The
learned authors Herbstein & Van Winsen7,
state that where some essential element of the plaintiff's cause of
action is not pleaded, it is not disclosed, and that, where the
pleading is contradictory or vague, the defendant would be prejudiced
in his defence, and that an exception must be upheld in these
circumstances.
The
8th defendant's defence, and cause of action for the counterclaim,
is premised on allegations of fraud.
Fraud
is a criminal offence, whose essential elements must be proved.
It
cannot, in my view, be said that the plaintiff does not know the case
that it must meet.
What
the 8th defendant has done in essence is to turn the tables on the
plaintiff and make similar averments to those made by the plaintiff
in the summons and declaration.
If
the 8th defendant's plea and counterclaim is vague and
embarrassing, so is the plaintiff's summons and declaration,
premised as both sets of pleadings are, on the same set of facts
between the same parties.
The
plaintiff did not state who in particular amongst 1st-7th defendants
allegedly fraudulently caused their appointment as directors and the
removal of the previous directors.
On
what basis does the plaintiff now seek to complain that the 8th
defendant similarly has failed to disclose specific names of the
alleged perpetrators of the fraud against the estate late Brian James
Rhodes?
In
my view, the paucity of particulars in both sets of pleadings can be
cured by appropriately worded requests for further particulars.
The
plaintiff was fishing for information when it took this ill advised
exception. It has remedies in terms of the rules. This finding is
supported by the following set of cases;- Rheeder v Spence8,
and McKelvey v Cowan NO9,
where the court said that:
“It
is a first principle in dealing with matters of exception that if
evidence can be led which can disclose a cause of action alleged in
the pleading, that particular pleading is not excipiable.
A
pleading is only excipiable on the basis that no possible evidence
led on the pleadings can disclose a cause of action”.
See
also William & Taylor v Hitchcock10,
Strand Meat Co. (Pty) v Smith11,
Fuxman v Brittain12,
and Schultz v Nell13.
It
cannot, in my view be said that the plaintiff does not know the case
that it must answer.
Evidence
can be led which can disclose the names of the specific perpetrators
of the fraud on the plaintiff, or on the 8th defendant in terms of
its counterclaim.
The
taking of the exception was ill advised, and on shaky ground at law
from the outset.
It
seems to me that taking an exception to the contents of the
pleadings, as a tool of litigation is a strategy which must be
carefully thought out, and which must be used only in those
circumstances where the upholding of the exception is more likely
than not, to dispose of the matter.
The
risk of wasting the court's time, or incurring unnecessary costs,
or causing unwarranted delay in the resolution of the main matter, is
only justifiable, where a favorable result to taking the exception is
likely.
To
discourage over litigiousness and a dereliction of duty as officers
of the court on the part of legal practitioners, it has become vital
for this court to award punitive orders as to costs as a shield
against its process being abused by the taking of exceptions which
either have no merit, or which are unlikely to dispose of the matter.
In
the circumstances of this case, the exception taken by the plaintiff
had no merit from the outset.
For
these reasons, the plaintiff's exception is be and is hereby
dismissed with costs on a legal practitioner and client scale.
Kevin
J. Arnott, applicant's legal practitioners
C.
Nhemwa & Associates, 8th respondent's legal practitioners
1.
2000 (2) ZLR 385 (H)
2.
1972 (1) RLR 155
3.
HH83-14
4.
1980 ZLR 235
5.
1955 (3) SA 615 (SR)
6.
2006 (2) SA 25 (T) @ 30E-31D
7.
The Civil Practice of the Superior Courts in South Africa (3rd ed)
pp339-40
8.
1978 (1) SA 1041 (R)
9.
1980 ZLR 235 (GD) @ 236B
10.
1915 WLD 51
11.
1930 CPD 24
12.
1941 AD 273
13.
1947 (2) SA 1060 @ p1063
