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[2011] ZAGPJHC 135
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Lethimvula Healthcare (Pty) Ltd v Private Label Promotion (Pty) Ltd (2010/6776) [2011] ZAGPJHC 135; 2012 (3) SA 143 (GSJ) (12 October 2011)
REPORTABLE
IN THE SOUTH GAUTENG HIGH COURT
(JOHANNESBURG)
CASE NO 2010/6776
DATE:12/10/2011
In the
matter between
LETHIMVULA HEALTHCARE (PTY) LTD
….........................
APPLICANT/DEFENDANT
and
PRIVATE
LABEL PROMOTION (PTY)
LTD
..........................
RESPONDENT/PLAINTIFF
Practice
- Application for leave to institute counterclaim after
delivery of plea – criteria applicable – Uniform Rules of
Court,
rule 24(1).
J U D G M E N T
VAN OOSTEN J:
[1] This is an application by the defendant in the main action, under
Uniform Rule of Court 24(1), for the introduction of a counterclaim
where its plea has already been delivered. For the sake of
convenience and ease of reference I will refer to the parties as in
the action.
[2] The litigation between the parties, in essence, is based on a
written lease agreement concluded between them on 13 February
2007
(the lease agreement). It is necessary to summarise the terms thereof
that are relevant to this application. The plaintiff
leased to the
defendant, then a registered medical Scheme Administrator known as
Old Mutual Health Care (Pty) Ltd, certain furnished
and equipped
office accommodation and facilities for the use of a call centre, for
the sole purpose of administering the Medshield
Medical Scheme
(Medshield). The fee payable by the defendant to the plaintiff for
the use of the premises was calculated at R5372-00
per month per
agent workstation for the first twelve months and R4910-00 per month
per agent workstation for the second 24 months.
The contentious
provision concerns the period of the lease: the lease was for a fixed
period of 36 months from 1 November 2007
until 31 October 2010 but,
in order to meet the defendant’s commercial objectives,
provision was made for a reduction of
the term of the lease to 12
months (therefore terminating on 31 October 2008) by written notice
given by the defendant to the plaintiff
90 days before the completion
of the first 12 month period. The last date on which the defendant
could effectively give such notice
accordingly, was 31 July 2008.
[3] On 15 July 2008 Medshield gave the defendant notice terminating
its services to Medshield with effect from 31 January 2009
but
affording the defendant the opportunity to re-tender for the
administration contract with Medshield. This prompted the defendant
to address an email, dated 30 July 2008, to the plaintiff, which the
defendant contends, constituted a valid termination of the
lease on
completion of first twelve month period. The plaintiff disputes the
validity of the notice and contends that the defendant
remains liable
for the full fixed term of the lease. The dispute led to the
commencement of the litigation between the parties
which consisted of
the launching of an application by the plaintiff in which it sought a
declarator to the effect that the lease
agreement had not been
validly terminated, that it remained valid and that the defendant
accordingly was obliged to comply with
its obligations in terms
thereof (the main application).
[4] The main application came up for hearing before Bregman AJ. The
learned Judge decided the issue in favour of the plaintiff.
The
defendant was moreover ordered to pay certain unpaid amounts due for
the months May to August 2009 and a declarator was issued
that the
defendant was liable for the damages sustained by the plaintiff for
the period commencing 1 November 2009 until 31 October
2010, in
respect of which the plaintiff was to institute proceedings by no
later than a stated date.
[5] Pursuant to the order of Bregman AJ the plaintiff instituted
action against the defendant for payment of damages for the period
referred to in the order, in the amount of R11 574 540-00. The
defendant defends the action and on 26 April 2010 filed a plea
denying that the plaintiff suffered any damages and pleading in the
alternative firstly, that the plaintiff should not be granted
specific performance and secondly, that the plaintiff claim should be
limited to its proven
id quod interest
, if any.
[6] I turn now to the facts giving rise to the present application.
The trial of the action was enrolled for hearing on 31 May
2011. In
preparation for trial the defendant’s legal representatives
consulted with Mr Weinberg, a former Group Head: Business
Development
of the plaintiff. During the consultation Weinberg revealed certain
information that the defendant was unaware of and
which the defendant
now alleges is material and directly relevant to the issue between
the parties. Based on the new evidence the
defendant contends that it
has become entitled to introduce a counterclaim which, in draft form,
is annexed to the papers. I will
revert to the nature of the new
evidence in due course. These events prompted the defendant on the
date of the hearing of the action
before Wepener J, by way of a
substantive application, to seek a postponement of the action which
was granted, and costs reserved.
The present application was
subsequently launched which is opposed by the plaintiff on the basis
firstly, that the facts now alleged
by the defendant do not raise
what would have been a defence to the application and, secondly, that
the application lacks
bona fides
.
[7] Next, it is necessary to deal with the new evidence and the
resultant counterclaim the defendant now seeks to introduce.
Weinberg,
during the consultation I have already referred to, and
with reference to management meetings of the plaintiff held on 5
August,
18 August and 8 September 2008, which he all attended, the
minutes of which are attached to the papers, revealed that the
plaintiff
had accepted the defendant’s e-mail of 30 July 2008
as a valid termination of the lease agreement. This, the defendant
states,
was in direct conflict with both the plaintiff’s
version and stance taken in the main application, which was upheld by
Bregman
AJ. Weinberg further revealed that he was specifically
authorised by Mr Ball, a director of the plaintiff and the deponent
to the
affidavits of the plaintiff in the main application, to
negotiate an extension of the lease period after expiry of the
initial
12 month period with the defendant, independent of the lease
agreement, which he in fact did. In this regard it is significant,
as
is common cause between the parties, that the defendant vacated the
premises at the end of April 2009. It bears mentioning that
the
plaintiff did not discover the minutes of the management meetings I
have referred to, but that these were only furnished in
response to a
notice in terms of Rule 35(3) to the defendant’s attorneys, on
6 April 2011. The minutes were discussed with
Weinberg on 19 May 2011
and it was only then, the defendant states, that the full
implications thereof on the action were appreciated.
Upon further
reflection it is further stated, it became apparent to the defendant
that Ball, in the main application, had “deliberately
misstated” the true facts and that he had failed to make full
disclosure of the facts relating to the termination of the
lease. The
non-disclosure, the defendant contends, was fraudulent and made with
the intention of misleading the court, to such
extent that a
different judgment in the main application would have resulted had
the true facts been known. Based on the new matter
the defendant
further contends that it has become entitled to an order setting
aside the judgment of Bregman AJ together with an
order for repayment
of the amounts, interest thereon and costs the defendant has paid
pursuant to the judgment, which is in essence
is the relief claimed
in the defendant’s proposed counterclaim.
[8] The introduction of a counterclaim subsequent to the delivery of
a plea, where as in this case, the plaintiff has refused to
consent
thereto, requires the leave of the court. In this regard rule 24(1)
provides:
‘
A defendant who
counterclaims shall, together with his plea, deliver a counterclaim
setting out the material facts thereof in accordance
with rules 18
and 20 unless the plaintiff agrees, or if he refuses, the court
allows it to be delivered at a later stage…’
(See, as to the history of this sub-rule:
Shell SA Marketing (Pty)
Ltd v Wasserman t/a Wasserman Transport
2009 (5) SA 212
(O) para
[12] - [17]). It is necessary to consider what the criteria are in an
application for relief under rule 24(1). First,
there must be a
reasonable and acceptable explanation for the lateness. In the
present matter I am satisfied that the explanation
for the lateness
satisfies this requirement and this was in any event not challenged.
Secondly, the defendant must show an entitlement
to institute a
counterclaim. Had it not been for the lateness the defendant, as
provided for in terms of rule 24(1), would have
been entitled
together with the plea, to introduce a counterclaim “setting
out the material facts thereof in accordance with
rules 18 and 20”.
Would these requirements be any different now that the leave of the
court is sought to introduce a counterclaim?
Put differently: should
the defendant, finding itself in this position, be required to
establish more onerous requirements in order
to succeed?
[9] Counsel have not been able to refer me to any direct authority on
the point nor was I able to find any. Useful guidance in
the quest to
find an answer is however provided in the judgment of Schabort J, in
Hosch-Fömrdertechnik SA (Pty) Ltd v Brelko CC and Others
1990
(1) SA 393
(W). In that matter the court dealt with an application by
the defendant under the provisions of rule 24(2) for leave to
institute
a claim in reconvention against the plaintiff and others.
In regard to the requirements to be satisfied in order to succeed the
learned Judge held that it was necessary for the applicant to
disclose its
locus standi
and, further, to disclose the cause
or causes of action upon which the action against them would be
based. To this the learned
Judge added:
‘
The need to establish a
prima facie
case of potential success in an action against the said persons does
not enter the picture. A condition rendering entitlement to
take
action subject to success in the action seems absurd and would be
misplaced in the context of Rule 24(2). Cf
Shield
Insurance Co Ltd v Zervoudakis
1967 (4) SA 735
(E) at 737G-738A. I do not think that the condition
in Rule 24(2) must be construed in this way.’
The same reasoning, in my view, for the reasons that follow, must
apply to an application under rule 24(1).
[10] The argument before me extended well beyond the requirements
referred to in rule 24(1). Providing fertile earth for many,
if not
most, of the contentions advanced by the plaintiff were the prior
procedures in which affidavits had been filed: firstly,
the
defendant’s answering affidavit in the main application,
secondly, the defendant’s application for the postponement
of
the trial and thirdly, the affidavits filed in the instant
application. But there it did not end: the arguments further expanded
to the proper interpretation to be afforded to the contentious email
as well as the correspondence exchanged between the parties,
the
minutes of the newly discovered management meetings of the plaintiff,
the documents giving rise to the fraudulent concealment
now relied
upon by the defendant and finally, the judgment of Bregman AJ. From
these the plaintiff extracted a number of “inconsistencies”
as well as “significant differences” resulting in an
alleged “tension” between the versions on which the
defendant now relies, which led the argument to conclude that the new
evidence is irrelevant, in conflict with the conduct of the
parties
and in any event inconsistent with the case the defendant has to
advance which is that there was a valid cancellation of
the lease
agreement followed by a new oral agreement of lease.
[11] I have given careful consideration to all the arguments.
Seemingly wanting at this stage is the
viva voce
evidence
concerning these aspects. I can do no better than to quote the
instructive preference in regard to the benefits of an
oral hearing,
articulated by Colman J in
Metallurgical and Commercial
Consultants (Pty) Ltd v Metal Sales Co (Pty) Ltd
1971 (2) SA 388
(W) 390F, as follows:
“
My
conclusion rests upon my experience, and the experience of others
before me, which shows that an assertion or a denial which
seems very
probable or improbable on a reading of a set of affidavits often
takes on a different colour when the veracity of the
person who has
made it is tested by cross-examination. There is the rare case, of
course, in which a disputed statement made on
affidavit is so
manifestly untrue, or so grossly improbable and unconvincing that the
Court is justified in disregarding it without
recourse to oral
evidence. But I cannot say that Mr. Rowe’s assertions on the
point in dispute fall into one of those categories.
They fall rather
into the class of assertions which, although apparently improbable,
might be accepted after an oral hearing. It
seems to me, therefore,
that on the principles recognised in
Frank
v Ohlsson’s Cape Breweries, Ltd.,
1924
A.D. 289
at p. 294, and in
Peterson
v Cuthbert & Co. Ltd.,
1945
A.D. 420
at p. 428, the dispute under discussion is one which ought
not to be resolved without an oral hearing.”
Inviting and weighty as some of the plaintiff’s contentions may
be, I, on the view I take of the matter, do not consider
it necessary
at this stage to reach any firm conclusion on any of the contentions.
The plaintiff does not resist the application
on the ground that the
defendant’s proposed counterclaim does not comply with rules 18
and 20. I can see no reason why the
defendant should be placed in any
different position than it would have been had it not been for the
lateness. Or, as counsel for
the defendant has put it: the defendant
should not be penalised for the lateness. Once an acceptable
explanation for the lateness
has been tendered all that remains for
the defendant to show its entitlement to institute a counterclaim
which in draft form, complies
with rules 18 and 20. The acceleration
of the application to the stage akin to the end of the trial, as has
now happened before
me, requiring at this stage a final decision on
the merits of the defendant’s counterclaim, without having had
the benefit
of oral evidence, in my view, will result in a premature
determination of the issues. The plaintiff, moreover, should the
counterclaim
be allowed, will not suffer prejudice that cannot be
cured by an appropriate costs order at the end of the trial. Once the
counterclaim
has been filed, it remains open to the plaintiff, in
terms of the rules of court, should it wish to do so, to address such
causes
of complaint as there may be. Those complaints, accordingly,
ought to be dealt with at that stage and then in terms of the
relevant
rules of court.
[12] Finally, the wording of rule 24(1) indicates the conferment of a
discretion on the court. In the exercise of my discretion,
for the
reasons stated together with considerations of justice and equity, I
have come to the conclusion that I should exercise
my discretion in
favour of allowing the introduction of the defendant’s
counterclaim, thereby ensuring the proper ventilation
of all disputes
between the parties in the ensuing trial.
[13] It follows that the application must succeed. The defendant has
properly asked for the costs of this application to be costs
in the
action.
[14] In the result the following order is made:
Leave is granted
to the defendant to deliver its counterclaim in the form set out in
annexure “NM1” to the notice
of motion, within 10 days
of the date of this order.
The costs of this
application are ordered to be costs in the action.
_________________________
FHD VAN
OOSTEN
JUDGE
OF THE HIGH COURT
COUNSEL
FOR APPLICANT/DEFENDANT
…............
ADV NJ
GRAVES SC
…......................
ADV
C BESTER
DEFENDANT/APPLICANT’S
ATTORNEYS
..................
FAIRBRIDGES
COUNSEL
FOR RESPONDENT/PLAINTIFF
................
ADV
PJ VAN BLERK SC
….....................................................................
ADV
HB MARAIS SC
RESPONDENT/PLAINTIFF’S
ATTORNEYS
.................
PETER
LE MOTTÉE ATT
DATE
OF
HEARING
...........................................................
27
JULY 2011
DATE
OF JUDGMENT
…..................................................
12
OCTOBER 2011