West Dunes Properties 142 (Pty) Ltd v Subtinix (Pty) Ltd and Another (GP) (unreported case no 94789/2019, 15-11-2021) (Van der Schyff J)

The Gauteng Division of the High Court in Pretoria dismissed an urgent application in the matter of West Dunes Properties and ordered that the judgment together with the s 18 application and all supporting documentation be delivered to the Chairperson of the Legal Practice Council (LPC) for an investigation into the respondents’ legal representatives’ conduct. This was after the respondents’ attorney of record failed to inform the High Court during the hearing on 6 August 2021, that the attorney of record paid out the funds received in trust contrary to an undertaking that was provided to the applicant’s attorney of record, and in the face of a pending urgent court application.

This was said by the court after the applicant (West Dunes Properties) sought an order that the respondents (Subtinix and Hendrick Ramokgoto Morua) be found guilty of the crime of civil contempt of an order granted by Nonyane AJ (the Nonyane order) on 17 February 2020. The applicant also sought an order committing the second respondent to imprisonment for a period of three months, and the suspension of this sentence for one day, to allow the second respondent the opportunity to comply with the terms of the order. The High Court pointed out that the attorneys of record and counsel should never lose sight of the fact that they are officers of the court, and they owe the court an ethical duty.

The High Court added that by not informing the court during the hearing of the urgent court application that the funds in question were already paid out to the respondents, despite a prior undertaking to keep such funds in a s 78(2)(a) of Attorneys Act 53 of 1979 investment account pending the determination of the dispute by the court, on face value, constitutes a serious breach of such ethical duty.

The applicant issued the application in terms of s 18(1) and (3) of the Superior Courts Act 10 of 2013. The applicant’s case sought an order that a sum of R 2 996 353,73 and R 5 579 110,50 be retained in their attorneys of record’s trust account pending the finalisation for leave to appeal to the Supreme Court of Appeal (SCA) and any further applications for leave to appeal that the respondents may institute. In their application, the applicant submitted that:

‘Given the fact that the funds received from Fundi Capital have been paid out by the respondent’s attorney of record, the only effective order to be granted by this court will be to specify which amounts should be paid in trust as an instruction by the respondents to their attorneys of record, as per the Van der Schyff order will not suffice under these circumstance[s]’.

On 6 August 2021, the High Court agreed with the applicant’s interpretation of the Nonyane order, however, it did not find the respondents to be in contempt. The following relief was granted:

‘“The first respondent, through the second respondent, must instruct its attorneys of record within 3 (three) days of this order being granted, to pay over to the application the amount received from Fundi Capital (Pty) Ltd in compliance with the order granted on 17 February 2020 by Nonyane AJ under case number 94789/2019”.

The respondents applied for leave to appeal the order granted by this court. The application for leave to appeal was dismissed. The respondents subsequently applied to the [SCA] for leave to appeal. The outcome of this application for leave to appeal is pending’.

The respondents raised the question as to whether relief sought in terms of s 18(1) and (3) is available to an applicant who seeks different relief from what was granted in the initial proceedings. The respondents submitted that the application falls short of being an application in terms of s 18(1) and (3) of the Superior Courts Act, and that the relief the applicant seeks is legally incompetent and impermissible in law. The High Court pointed out that subss 18(1) and (3) refer to ‘the operation and execution of a decision which is the subject of an application for leave to appeal or appeal’.

The High Court said the order that is currently suspended due to the respondents having filed application for leave to appeal is the order that:

‘(3) A court may only order otherwise as contemplated in subsection (1) or (2), if the party who applied to the court to order otherwise, in addition proves on a balance of probabilities that he or she will suffer irreparable harm if the court does not so order and that the other party will not suffer irreparable harm if the court so orders.’

The High Court pointed out that it was confirmed by now that the respondents’ attorney of record paid out the amounts, they held in trust to either the first or the second respondent before the Van der Schyff order was granted in August 2021. The respondents’ attorneys of record were not party to the contempt application and no relief was, or is, sought against them. The respondents claim that the relief that the applicants seek surpasses the upliftment of the suspension of the operation and execution of the order pending the decision of the application of leave to appeal. The High Court said that it is a common cause that, the lease agreement between parties were cancelled, and that the money that was supposed to be paid out to the applicant in terms of the Nonyane order, was paid to either the first or the second respondent. That it is impractical, if not impossible, to insist on the enforcement of the Van der Schyff order granted on 6 August 2021 as it stands, is conceded in so many words by the applicant.

The High Court said that the applicant wanted it to grant an order that would arguably put it in the same position it would have been had the Nonyane – and Van der Schyff orders been honoured. However, the High Court said had it been made aware of the fact that the respondents’ attorney of record paid out the funds received in trust contrary to an undertaking that was provided to the applicant’s attorney of record, and in the face of a pending urgent court application, it would have granted a different order on 6 August 2021.

The following order was made:

‘1. The application is dismissed.

2. Each party is liable for their own costs.

3. The judgment together with the section 18 application and all supporting documentation are to be delivered to the Chairperson of the Legal Practice Council for an investigation into the respondents’ legal representatives’ conduct.’

Kgomotso Ramotsho Cert Journ (Boston) Cert Photography (Vega) is the news reporter at De Rebus.

This article was first published in De Rebus in 2022 (Jan/Feb) DR 31.