Dis-Chem Pharmacies has been sued by a close corporation for about R12m in damages for allegedly breaching a sale agreement, but the trial’s status is uncertain, after the CC fired its attorneys and asked the court to allow a non-lawyer to litigate on its behalf.
Years ago, HG Manolas CC – trading as Sunward Park Pharmacy – sold a pharmacy to Dis-Chem. However, it now alleges Dis-Chem breached the sale agreement by not fulfilling obligations in the contract (which has yet to be seen as the matter is ongoing).
Because Manolas CC is a close corporation, Dis-Chem demanded security for costs to enter litigation. At the time, HG Manolas, the close corporation’s sole member, instructed his attorneys to pay the required R250 000.
However, he later disputed having any obligation to pay.
His refusal led to Dis-Chem bringing an interim case. Dis-Chem asked the court to compel the close corporation to pay the security.
Until then, the entire matter must be put on hold.
In the end, Gauteng High Court (Johannesburg) judge Stuart Wilson agreed the close corporation must pay, but it tried to fight back, making three unsuccessful submissions.
First, it argued that Manolas was only persuaded by his then lawyers to tender security “to speed up litigation”. However, this did not happen. As a result of not expediting the litigation, Manolas argued his corporation should not have to provide the security.
Wilson said he was “sympathetic… to what appears to be a layperson’s obvious frustration with the delays inherent in litigation”, but this was not enough. Manolas did not make out any legal argument here, Wilson said.
The close corporation also sought leave to file another affidavit but Wilson refused. “The affidavit does not canvas any material that could conceivably be relevant to the question of whether the close corporation should provide the security (for costs).”
Finally, the close corporation requested Manolas appear on its behalf to represent it in the main action against Dis-Chem.
“Mr Manolas has, for reasons that are not clear but with which it is hard not to have sympathy,” wrote Wilson, “decided to do away with his lawyers and run his case himself. However, as with most decisions born purely of frustration, his choice was unwise.”
Wilson noted SA law stipulates companies and close corporations “may not be represented in legal proceedings by a layperson, even if that layperson is a director or shareholder of the company, or a member of the close corporation”.
Courts may order otherwise but only in rare instances.
In these interim proceedings, Wilson allowed Manolas to appear on behalf of his CC.
Wilson noted that, importantly, by Manolas’ dismissing his lawyers, he caused the very “delays of which he complains”.
Further, “there is no suggestion that the CC cannot afford to obtain representation or to provide the security tendered. Mr Manolas’ decision to go it alone seems to be little more than hubris.”
Wilson dismissed Manolas’ arguments and ordered the CC to furnish the costs.
However, Wilson also dismissed Dis-Chem seeking punitive costs against Manolas.
Wilson said he did not “wish to open the door to punitive costs orders against mistakes made without malice by lay litigants.”
See more from MedicalBrief archives:
Dis-Chem revenue tops R30bn for first time
Reputational harm causes Dis-Chem to abandon appeal
Dis-Chem: Competition Commission is scapegoating us on price gouging