Kelly v Mules (No 2) No. DCCIV-98-610

Kelly v Mules (No 2)
[2003] SADC 154
Judge Muecke
Civil

On 17 September 2003 I published reasons why I would allow the plaintiff’s (‘Mr Kelly’s’) claim as to the sum of $250,000 plus interest and why I would dismiss the defendant’s (‘Mrs Mules’’) counterclaim (Judgment No [2003] SADC 140).
On 24 September 2003 I entered judgment for Mr Kelly against Mrs Mules in the sum of $250,000 plus interest in the sum of $134,301.37 calculated from 6 January 1997 to 24 September 2003. I further ordered that interest accrue on the sum of $250,000 at the rate of 8 per centum per annum from 24 September 2003.
I dismissed Mrs Mules’ counterclaim.
I further ordered that Mrs Mules pay Mr Kelly’s costs of and incidental to the proceedings to be taxed on a party/party basis (including costs in respect of the withdrawal of part of the counterclaim by the defendant on 26 June 2002 and reserved costs) with liberty to Mr Kelly to apply for costs to be taxed on a solicitor and own client basis.
I further ordered that any monies held in the trust account of Mrs Mules’ solicitor Mr Herman Bersee be charged with the payment of the whole of the judgment debt including interest accrued and accruing and costs, including costs payable under any future order as to costs. I ordered that such a charge remain in force until it be discharged by order of the court. I gave liberty to Mrs Mules to apply to discharge or vary the orders made as to the monies in Mr Bersee’s trust account.
I made other orders including an order reserving for further consideration other orders sought on behalf of Mr Kelly in draft orders signed by me and dated 24 September 2003. Those orders were:
·That costs fixed in the sum of $4,000 that I had ordered on 10 October 2002 to be paid by Mrs Mules to Mr Kelly be payable forthwith.
·That monies in the suitors fund in this court, together with all interest accrued thereon, be paid to Mr Kelly in part satisfaction of the judgment obtained by him as against Mrs Mules.
·That Mrs Mules transfer to Mr Kelly her interest in certain land near Mt Gambier known and described as the OB Flat land.
·That Mrs Mules give ‘discovery’ of documents which evidence or relate to any monies held on behalf of Mrs Mules by her solicitor Mr Bersee.
·That Mrs Mules do all acts and things necessary to give effect to orders sought by Mr Kelly.
After 24 September 2003 each party filed applications seeking certain other orders.
Mr Kelly sought an order that Mrs Mules pay his costs of and incidental to the proceedings to be taxed on a solicitor and own client basis (including costs in respect of the withdrawal of part of the counterclaim by Mrs Mules on 26 June 2002 and reserved costs).
Mrs Mules sought an order discharging my order whereby the funds held in the trust account of Mr Herman Bersee were charged with the payment of the judgment debt. Mrs Mules also sought an order that there be a stay of execution on the judgment sum in favour of Mr Kelly pending the outcome of an appeal from my judgment of 24 September 2003. These orders were sought by way of Notice for Specific Directions filed on 7 October 2003 which notice was supported by an Affidavit of Mrs Mules’ solicitor Mr Herman Bersee sworn on 3 October 2003. It was not supported by an Affidavit of Mrs Mules.
A Notice of Appeal against my judgment was filed in the Supreme Court and served on Mr Kelly’s solicitor on 7 October 2003. By that Notice of Appeal Mrs Mules complains of all the orders I made on 24 September 2003. Mrs Mules seeks orders of the Supreme Court that her appeal be allowed; that my orders made on 24 September 2003 be quashed; that the matter be remitted for a new trial in accordance with the reasons for judgment of the Full Court; and such further or other orders as the Supreme Court deems meet. No other relief is sought by the Notice of Appeal. Mrs Mules does not concede by her Notice of Appeal, either in her grounds or in the orders sought, that it would be appropriate for the Full Court of the Supreme Court to order, on Mr Kelly’s claim for monies due pursuant to a loan agreement, that she pay to Mr Kelly the sum of $70,000 together with interest at 8 per centum per annum from 6 January 1997 to date.
All the matters that I reserved on 24 September 2003 for further consideration, and the matters that were sought in applications filed subsequent to that date were argued before me on 24 October 2003. I heard detailed and helpful submissions from Mr McNamara, of senior counsel, on behalf of Mr Kelly, and from Mr Stretton, of counsel, on behalf of Mrs Mules. Both counsel referred me to the relevant authorities on all the issues that were argued before me.
Costs
On 24 September 2003 I ordered that Mrs Mules pay Mr Kelly’s costs of and incidental to the proceedings to be taxed on a party/party basis.
Mr Kelly now seeks a variation of that order. He seeks that I order that Mrs Mules pay his costs of and incidental to the proceedings to be taxed on a solicitor/own client basis (including costs of the withdrawal of part of Mrs Mules’ counterclaim on 26 June 2002 and reserved costs). Alternatively, Mr Kelly seeks an order that his costs be taxed on a solicitor/client basis.
The legal costs associated with this case, however taxed, are not yet known but are likely far to exceed my judgment on the claim and what I would have ordered on the counterclaim had I found a de facto relationship to have existed. There is some evidence before me indicating that Mr Kelly’s costs may be as high as $900,000 and that Mrs Mules’ costs may be as high as $500,000.
My reasons for judgment of 17 September 2003 indicate the length of the trial and how certain issues were pleaded and evolved. I referred to the amendment to Mrs Mules’ counterclaim, by leave given on 30 March 1999, to add paragraph 5A (paras 29ff). I also referred to the circumstances surrounding the withdrawal of that amended pleading on 25 June 2002, just before trial (paras 37ff).
The evidence now before me establishes that Mr Kelly filed a rules offer on 17 April 2002, about three months prior to the commencement of the trial. That offer was filed pursuant to r41. That offer, together with an explanatory letter from Mr Kelly’s solicitor to Mrs Mules’ of the same date, represented an offer by Mr Kelly to accept the sum of $185,000 plus $15,000 for costs and disbursements. That offer was made in respect to Mr Kelly’s Statement of Claim, in satisfaction of Mr Kelly’s cause of action on the Statement of Claim. In his Statement of Claim Mr Kelly claimed for monies due pursuant to a loan agreement. The monies were said to be in the sum of $250,000 plus interest at 8 per cent from 6 January 1997. Mr Kelly also claimed in his Statement of Claim for stolen monies in the sum of $20,000. As at 17 April 2002 Mr Kelly’s potential claim was for approximately $370,000.
My judgment on Mr Kelly’s claim was for $250,000 plus interest of $134,301.37 calculated from 6 January 1997 to 24 September 2003. Accordingly, my judgment exceeded the amount of Mr Kelly’s rules offer by 100 per cent.
Mr Kelly did not file a rules offer in respect of Mrs Mules’ counterclaim pursuant to the De Facto Relationships Act 1996.
There was, however, evidence before me that Mr Kelly made some informal Calderbank offers to Mrs Mules to settle her counterclaim against him and Mr Kelly’s claim against her. I refer in particular to a letter dated 25 July 2002. That letter is dated just before the end of the third week of the trial in Mt Gambier. 25 July 2003 was the 14th day of trial. There were still 48 days of the trial to go. The effect of Mr Kelly’s offer was that Mrs Mules would pay Mr Kelly the sum of $76,000 as well as transferring to him her interest in OB Flat (which interest was said to be valued at about $80,000). It was proposed that Mrs Mules pay $76,000 from the suitors fund which then contained approximately $12,000 in excess of that amount. Included in those calculations were legal costs thrown away by Mrs Mules in consequence of the withdrawal of part of her counterclaim just before the trial started. Those costs were estimated by Mr Kelly’s advisers at $60,000. Regardless of what the figure actually was, it would have been evident that Mrs Mules would be ordered to pay those costs of Mr Kelly thrown away by the withdrawal. The proposal was made at a time when it was said that Mrs Mules had disclaimed in her evidence all interest in the OB Flat property (a property to which she had made no contribution). Finally, it was proposed that each party otherwise pay his or her then costs of the proceedings.
When compared to the ultimate result in my judgment this offer by Mr Kelly was an extremely generous one to Mrs Mules. Furthermore, the sum of $76,000 was calculated in a way such that Mrs Mules would obtain a judgment on her counterclaim in the sum of $120,000.
As to Mr Kelly’s costs on his claim I consider that there is no proper reason to order otherwise than that Mrs Mules pay to Mr Kelly the whole of his costs of action to be taxed as between solicitor and client. That is the effect of r41.04 and the authorities cited by Mr McNamara during his submissions to me. However, Mr McNamara went further. He submitted that there are reasons which should convince me to exercise the undoubted discretion I have to order that Mrs Mules pay Mr Kelly’s costs on the more ‘penal’ basis of solicitor/own client. He pointed to Mrs Mules’ serious allegation that Mr Kelly forged the document that was the subject of Mr Kelly’s claim for $250,000 plus interest at 8 per cent. He also relied on the submissions he made which he said supported an order for solicitor/own client costs on Mrs Mules’ counterclaim. Pages 2-10 of Mr McNamara’s written outline sets out in some detail the circumstances of this case, and the relevant authorities, which Mr McNamara argued would justify an order that Mrs Mules pay Mr Kelly’s costs other than on a party/party basis.
I consider that much of Mr McNamara’s written outline and the oral submissions he made in supplementation of it constitute strong grounds for an order other than for party/party costs. Many of them would justify orders for solicitor/own client costs on both the claim and counterclaim. Examples of these are Mrs Mules’ alleged Defence of the signed release in January 1998 which was abandoned just before the end of the trial, and her withdrawal of a major pleading just before trial which contained terrible allegations against Mr Kelly that had been introduced three years earlier in an attempt to ‘set aside’ a settlement of their affairs in 1993.
At the time that para 5A was withdrawn I may have been prepared to infer that it was withdrawn to save Mrs Mules embarrassment and anguish in adducing the evidence relied on before Mr Kelly had given evidence. I am not prepared, however, to infer that now. Before the end of the trial Mrs Mules’ counsel conceded that as things had turned out my direction as to the order in which the parties would present their cases was probably correct. More importantly, the withdrawn pleading alleged that Mrs Mules had a dependant personality disorder and was subjected to undue influence by Mr Kelly who took unfair advantage of her. She alleged that she agreed to certain transactions proposed by Mr Kelly in an effort to be free from his controlling influence and the physical and psychological power he exerted over her. My findings at the end of the trial were contrary to these allegations.
I conclude that the allegations in para 5A were withdrawn either because they were not true and were only alleged in order to put pressure on Mr Kelly to settle the litigation in a manner advantageous to Mrs Mules, or they were withdrawn because no credible evidence could be obtained to support the submissions made on behalf of Mrs Mules as to the effect that presenting her case first would have on her and thus their withdrawal was an attempt to avoid having to put her case first.
Other matters which I consider might justify an order for solicitor/own client costs on the whole of the proceedings include:
(a)my findings as to Mrs Mules’ credit, the circumstances in which she manufactured evidence (the audio tape), and that she encouraged a number of witnesses to give what she knew to be false evidence regarding the loan agreement;
(b)my finding that Mrs Mules consciously sought to mislead me as to Mr Arthur Facey and her relationship with him;
(c)my finding that Mrs Mules had and probably still has a copy of the loan agreement and the original and/or copies of the trust agreement between her and her son David Mules; and
(d)the consequential finding that Mrs Mules defended Mr Kelly’s claim knowing that her allegation that he had forged page one of it was untrue.
Notwithstanding these matters there was some independent ‘expert’ evidentiary basis on which Mrs Mules could defend Mr Kelly’s claim on the loan agreement and also, importantly, there was the stolen monies allegations on which I have not given Mr Kelly judgment. Although these matters are not overly persuasive, they are sufficient to convince me not to award costs against Mrs Mules on Mr Kelly’s claim on the most punitive basis. I consider that a just order on the claim would be costs on a solicitor/client basis. I would so order.
There is no doubt that the various issues relevant to Mr Kelly’s claim and those relevant to Mrs Mules’ counterclaim were and are inextricably interwoven. That is clear from my reasons for judgment. The evidence as to these matters is likewise inextricably interwoven. There was much evidence relevant to both claim and counterclaim.
Whilst there are some compelling reasons for ordering Mrs Mules to pay costs on her counterclaim on a solicitor/own client basis, I consider that the justice of the case would be met by ordering that Mrs Mules pay Mr Kelly’s costs of the whole action (including the claim and the counterclaim) on the basis of solicitor/client. An order in these terms would include Mr Kelly’s costs thrown away on the abandoned para 5A pleading on Mrs Mules’ counterclaim. In addition, I would order that Mrs Mules pay to Mr Kelly the sum of $4,000 which I fixed on 10 October 2002.
I am not sure whether both parties and I have a common understanding of what ‘reserved’ costs means in Mr Kelly’s application for costs. I would order Mrs Mules to pay Mr Kelly’s reserved costs on a solicitor/client basis, but give leave to Mrs Mules to apply on this matter.
Stay of execution of judgment
By application dated 3 October 2003 Mrs Mules seeks a stay of execution of my judgment in this matter pending the outcome of an appeal from each of the orders I made on 24 September 2003. By the same application Mrs Mules applies for an order discharging the order I made on 24 September 2003 by which funds held in Mr Bersee’s trust account on behalf of Mrs Mules were charged.
An Affidavit of Mr Bersee, sworn on 3 October 2003, was filed in support of the orders sought by Mrs Mules. Mrs Mules did not swear an Affidavit in support.
Mr Bersee’s Affidavit discloses that there is $32,313.99 currently in his trust account. Those funds comprise the balance of proceeds of the sale of Mrs Mules’ scale fishing licence. This was the licence purchased in December 1997/January 1998 with funds provided by Mr Kelly. Those funds comprised part of the loan agreement which was the subject of Mr Kelly’s claim against Mrs Mules and of my judgment in Mr Kelly’s favour in the sum of $250,000 plus interest. Until nearly the end of the trial Mrs Mules claimed that she was not indebted to Mr Kelly for any part of the sum of $250,000, including monies she admitted were provided by Mr Kelly to her and her son David Mules which included $70,000 with interest at 8 per cent per annum. As appears in my reasons for judgment Mrs Mules ultimately abandoned any defence in respect of $70,000 at 8 per cent per annum. I was told by Mrs Mules’ counsel at trial that she ‘always’ conceded that she was liable to Mr Kelly for the sum of $70,000 at 8 per cent per annum from 6 January 1997.
In his Affidavit of 3 October 2003 Mr Bersee swore:
5.3In order to meet the ongoing expense of the conduct of these proceedings therefore the Defendant was obliged to sell her marine scale fishing licence and after advertising the licence for sale it was sold for an amount of $170,000.00 with the payment of a deposit of $17,000.00 on the 4th November 2002 and payment of the balance, namely 153,000.00, on or about the 18th December 2002. Of these proceeds $10,000.00 was used by the Defendant to repay loans of sums borrowed to conduct these proceedings. She received $10,000.00 for her own living expenses in circumstances where because of her requirement to attend court for lengthy periods of time away from her home and without the ability to earn any income she had depleted all her resources.
5.4Of the remaining balance of $150,000.00 the sum of $40,000.00 was paid to Counsel towards his fees, $40,000.00 was paid to myself towards my costs and the balance reducing to the amount retained in my trust account as referred to above was used to pay other disbursements in connection with this matter including transcript fees of $20,230.00 paid to the Courts Administration Authority and other sundry disbursements.
These figures indicate that there is a sum of $17,456 which is not specifically accounted for. I was told during submissions that that sum was the balance of disbursements paid by Mr Bersee in connection in this matter in addition to transcript fees of $20,230.
In another part of his Affidavit Mr Bersee swore:
8The Defendant requires the funds retained in my trust account to be used to pay for an Appeal and to meet the expense of instructing Counsel including Senior Counsel with the conduct of same. Having regard to the extensive nature of this matter, the duration of the trial, the costs associated with preparing Appeal Books which will probably include photocopying of transcript of over 6,000 pages x5 I am certain that the funds currently held on my trust account will be required in their entirety to enable the Defendant to pursue her appeal.
9I believe that previous orders of this Court prevented the Defendant from dealing with or raising money against the assets referred to in paragraph 6(i)(ii) (Lemana Court and OB Flat) and that the monies held in Court are also unavailable to her and therefore the Defendant has no other means of pursuing an appeal.
1010.1 Having regard to His Honour’s orders of 24th September 2003 an Appeal will be required to be lodged by Wednesday 8th October 2003;
10.2Having regard to the detailed nature of the judgment my firm instructions are that the Defendant does not unnecessarily wish to further endure the trauma of these proceedings including an appeal without being properly advised by Counsel.
10.3I am advised by Counsel and verily believe that detailed consideration needs to be given not only of the judgment herein of some 144 pages but also detailed consideration of the evidence before proper advice can be given as to the prosecution of the appeal. I am advised by Counsel that on the material provided to date there are arguable grounds to appeal the decision and it is reasonable and appropriate to file a Notice of Appeal and that the transcript and numerous exhibits tendered herein need to be perused and considered in detail before further advice can be properly provided.
11Although I in no way forego my claim over the funds held in my trust account or any rights which may vest in me by virtue of any lien which I properly hold over these funds, I am prepared to undertake not to use these funds in any way other than in the proper conduct of an appeal without the further order of this Honourable Court.
12I respectfully request that there be a stay of proceedings herein pending the outcome of the appeal from His Honour’s judgment. Allowing the Plaintiff to execute the judgment will deprive the Defendant of the means with which to prosecute her appeal. Furthermore it will effectively result in the Defendant being financially ruined.
13I am instructed that my client is prepared to undertake not to deal with her home or her interest in the OB Flat land without further order from the Court.

I was told during submissions that the costs of the appeal were more likely to be something in the order of $50,000. I asked Mrs Mules’ counsel during submissions whether there had been any assessment done as to what counsel (including senior counsel) may charge to give the proper advice referred to in para 10.2 above. I was told that such fees would not be significantly less than the cost of preparing and arguing the appeal. I was further told that if counsel’s advice was that the appeal should not be pursued then any funds left in Mr Bersee’s trust account would not be applied without further order of the court.
I note (and would accept) Mr Bersee’s undertaking not to use the funds in his trust account in any way other than in the proper conduct of an appeal without further order of this court. That is not, however, Mrs Mules’ personal undertaking. Her instructions to Mr Bersee may be otherwise and Mr Bersee may have obligations to pay counsel fees or other disbursements.
I also note that it is Mr Bersee’s belief that allowing Mr Kelly to execute on his judgment will deprive Mrs Mules of the means with which to prosecute her appeal and that it will effectively result in her being financially ruined. I infer that Mr Bersee’s belief as to these matters is based upon his instructions from Mrs Mules as to her assets. Whilst his affidavit is couched in terms of her current asset position it partly uses outdated information. Mr Bersee states:
6The Defendant’s current asset position is detailed before this Court and in summary comprises:
(i)     The Defendant’s home at 5 Lemana Court, Mount Gambier comprised in Certificate of Title Register Book Volume 5388 Folio 105 perhaps now worth approximately $145,000.00;
(ii)    The Defendant’s interest of one undivided second part in respect of the block of land at OB Flat comprised in Certificate of Title Register Book Volume 5264 Folio 643 worth approximately $85,000.00;
(iii)   Monies held in Court in the sum of approximately $65,000.00;
(iv)   Magna Sedan worth $10,000.00;
(v)     Jewellery, furniture and contents as previously particularised before this Court.
It will be noted that this is expressed to be Mrs Mules’ position as ‘is detailed before this Court’. I infer that Mr Bersee is relying, at least in part, on evidence that was put before me during the trial. Jewellery which was particularised at trial relied on a valuation in 1986, and furniture and effects were to the value of $10,000, also relying on very old documents (Reasons, page 35). Importantly, I do not now have any current information as to any bank accounts operated by Mrs Mules.
I also refer to some findings I made in my judgment. I found that the effect of Mrs Mules’ evidence during cross-examination was that she had spent something of the order of $160,000 between September 1998 and February 2001 and that she could not satisfactorily account for the vast majority of that amount (Reasons, para 411). Those monies were the proceeds of the sale by her of the Barn Motel in August 1998. I further found that a significant sum of money from the proceeds of the sale of the Barn Motel has been secreted by Mrs Mules so that it could not be brought into account in this case. I was unable to find exactly how much money is involved although I found that it was at least $75,000 (Reasons, para 417).
On the application to stay execution of my judgment Mrs Mules’ counsel submitted that a failure to stay the orders would prevent Mrs Mules from conducting her appeal and that she would be financially ruined.
The judgment sum, including interest, is in the amount of approximately $384,500.
On the evidence before me Mrs Mules has assets of the following values:
Monies in the suitors fund -   approx $93,000.00
Interest in Lemana Court -   $145,000.00
Interest in OB Flat (apparently not in dispute) -   $85,000.00
Money in solicitors’ trust account -   approx $32,000.00
$355,000.00
The position regarding Mrs Mules’ legal costs is not clear. In his Affidavit Mr Bersee estimates Mrs Mules’ total legal costs and disbursements to date range between $400,000 and $500,000, of which she has now paid a total sum of $136,977.93, mostly in disbursements. Legal costs and disbursements referred to by Mr Bersee in para 5.3 of his Affidavit (including the sum of $17,456 to which I have earlier referred) appear to total $127,686. That sum is within $10,000 of the total sum said to have been paid by Mrs Mules in legal fees. All of those fees appear to have been paid since 18 December 2002 when Mrs Mules sold her marine scale fishing licence for $170,000. However, Exhibit P61 tendered at the trial indicates that something of the order of $22,000 was paid for legal costs and disbursements between 19 May 1998 and 8 July 2002, and possibly a further sum of approximately $7,000 was paid in a similar period. Furthermore, in an Affidavit sworn on 20 August 2002, Mr Bersee estimated disbursements incurred on behalf of his client at $63,271 since 1 July 2002. Those estimates included counsel fees of $43,500 (Exhibit P229). It is not disclosed if those fees have been paid and, if so, when.
Finally, I was told by Mr Kelly’s counsel during submissions that Mr Kelly’s instructions were that he would not seek to tax his costs before the appeal in this matter has been heard and determined.
A stay of execution of my judgment can be made in an appropriate case. An appropriate case will be where the justice of the case requires a stay.
I consider that the orders that Mrs Mules seeks in her current Notice of Appeal suggest that her appeal is not genuine. She asks the Full Court to quash my orders made on 24 September 2003 and that ‘the matter be remitted for a new trial in accordance with the reasons for judgment of the Full Court’. I do not consider that such an order could genuinely be sought. During submissions, however, Mrs Mules’ counsel indicated that Mrs Mules would amend the orders sought in the Notice of Appeal. An order seeking a new trial would be a secondary order. The primary order would be for the Full Court to substitute my orders with orders disposing of the action. I was told that Mrs Mules would not be ‘challenging’ that Mr Kelly would at least be entitled to judgment on his claim in the sum of $70,000 plus interest at 8 per cent per annum from 6 January 1997.
On those intimations I am not satisfied that Mrs Mules’ appeal is not a genuine one. Although it is lacking in specifics as to the advice received, I proceed on the basis of Mr Bersee’s Affidavit that he has been ‘advised by counsel that on the material provided to date there are arguable grounds to appeal the decision and it is reasonable and appropriate to file a Notice of Appeal’.
A significant part of Mr Kelly’s judgment for $250,000 plus interest comprises funds he provided to Mrs Mules in December 1996/January 1997 so that her son David could go fishing and Mrs Mules’ interest in OB Flat, a property to the acquisition, conservation or improvement of which she has contributed nothing, either directly or indirectly. Many times in her evidence at the trial she disavowed any interest in that land. Furthermore, Mrs Mules has ‘never disputed’ that she has been and is indebted to Mr Kelly in the sum of $70,000 plus interest at 8 per cent from January 1997. Such indebtedness would now be over $100,000. That sum, together with $85,000 being Mrs Mules’ interest in OB Flat, represents an indebtedness of $185,000.
Whilst Mrs Mules has never disputed an indebtedness to Mr Kelly of $70,000 plus interest at 8 per cent, she has never paid, nor, so far as I am aware, offered to pay Mr Kelly any of that sum or any interest on it. In August 1998, when legal costs of these parties was minuscule compared to what they now are, Mrs Mules sold the Barn Motel for approximately $300,000. From that sum she purchased Lemana Court in which she has allowed one of her sons to live rent free for several years. On my findings she has not herself lived at that property. Also on my findings at least $75,000 of the proceeds from the Barn have been secreted by Mrs Mules and not brought to account in the proceedings before me.
A stay of execution of the judgment would mean that Mr Kelly would be kept out of monies which Mrs Mules does not dispute she owes him for a further period of time.
I am not satisfied on the evidence before me that Mrs Mules would not be able to prosecute her appeal unless a stay of execution is made. Neither am I satisfied on the evidence before me that Mrs Mules would be financially ruined if there was no stay of execution. Whilst I accept that Mr Bersee believes that those events would occur I am not satisfied that Mrs Mules’ circumstances are such that either of them would eventuate.
Accordingly, I am not satisfied that the matters contended for by Mrs Mules’ counsel are established. Furthermore, I do not consider that there are other grounds that satisfy me that this is an appropriate case to warrant the favourable exercise of my discretion to grant a stay of execution. I do not consider that the justice of the case, in the circumstances to which I have referred, require a stay. Accordingly, it is refused.
For the same reasons I refuse to discharge the charging order I made on 24 September 2003 over the funds held in Mr Bersee’s trust account.
I note, however, that there is an intimation that those monies may be the subject of an application proposed to be brought on behalf of Mr Kelly that Mrs Mules give security for Mr Kelly’s costs of the appeal. I was told that if security is ordered the funds held in Mr Bersee’s trust account may be required for Mrs Mules to provide that security. In that event a further application would be made before me as to the existing charging order as to those funds.
Charging orders over Lemana Court and OB Flat
By application dated 19 September 2003 Mr Kelly sought orders charging Mrs Mules estate and interest in the land and improvements known as Lemana Court and in the land and improvements known as OB Flat. I was told that if I made such orders applications would be then made for the sale of those interests to pay Mrs Mules’ judgment debt to Mr Kelly.
In his affidavit of 3 October 2003 Mr Bersee indicates his instructions from Mrs Mules that she is prepared to undertake not to deal with Lemana Court and her interest in the OB Flat land without further order of the court. It was submitted on behalf of Mrs Mules that it was not necessary for me to make charging orders over these properties because Mr Kelly was otherwise fully protected by Mrs Mules’ undertakings. It was further submitted that charging orders may give rise to arguments about preferences as between Mrs Mules’ creditors on any bankruptcy.
I am not satisfied that the latter issue is a sufficiently relevant factor for me to give it significant weight in this case. The bankruptcy laws should not prevent me from making what I consider to be appropriate orders in this case. They will be given full force and effect if the circumstances arise. I have already indicated that I am not satisfied that Mrs Mules would be financially ruined by not staying execution of the judgment. There is no evidence before me of any creditors other than Mr Kelly, with the possible exception of her legal advisors. I am satisfied that there are outstanding costs and disbursements due to Mrs Mules’ legal advisors. I rely on Mr Bersee’s Affidavit as to that although I have indicated that I have difficulty in discerning precise sums. Furthermore, I am not satisfied that I have been fully informed of Mrs Mules’ assets. I was not satisfied of her assets at the conclusion of the trial and I am now not satisfied that she has disclosed the full extent of them.
In light of my reasons for refusing to make an order staying execution of the judgment I consider that it is appropriate in this case to charge Mrs Mules’ properties as sought by Mr Kelly.
I shall hear the parties as to any ancillary orders and as to the costs of the applications and attendances before me.

[2003] SADC 154

30 October 2003