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[2014] ZAGPJHC 47
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Bula Communication technologies (Pty) Ltd v Dell Computer (Pty) Ltd (22431/2013) [2014] ZAGPJHC 47 (14 March 2014)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO:22431/2013
In
the matter between:
BULA
COMMUNICATION TECHNOLOGIES
(PTY)
LIMITED
Plaintiff
and
DELL COMPUTER (PTY)
LIMITED
Defendant
JUDGMENT
MAYAT
J
[1]
The present hearing relates to eight interlinked grounds of exception
raised by the defendant to the plaintiff’s particulars
of
claim. The said exceptions are based on a notice in terms of rule
23(1) of the Uniform Rules of Court filed on behalf of the
defendant
on the 31
st
of July 2013. In terms of the said notice, the
defendant afforded the plaintiff an opportunity to remove the cause
of complaints,
failing which the defendant would take further steps
to except to the plaintiff’s particulars of claim on the basis
of the
notice filed.
[2]
Prior to the hearing of this matter, the plaintiff’s counsel
conceded one of the grounds of exception in her heads of
argument.
Thus, it was indicated that the plaintiff’s particulars of
claim would be amended in due course to remove
the cause of complaint
on the basis of the said ground of exception only. The
defendant, as excipient, now seeks an order
on the basis of the
remaining grounds of exception. Moreover, notwithstanding the
concession by the plaintiff’s counsel in
relation to one ground
of exception, it appears that the ambit of the ground of exception,
which has been conceded by the defendant,
has been widened on the
basis of further submissions by the defendant’s counsel.
RELEVANT
BACKGROUND
[3]
The plaintiff claims damages against the defendant primarily as a
result of the defendant’s averred repudiation of a business
relationship agreement, concluded between the parties on the 12
th
of May 2005. The said agreement, which is annexed to the particulars
of claim, marked “A”, is referred to in the particulars
of claim and this judgment as “the BRA”.
[4]
It appears from the copy of the BRA, annexed to the plaintiff’s
particulars of claim, that the plaintiff had appointed
the defendant
as the plaintiff’s authorized supplier for Dell products within
the Republic of South Africa. Thus, it is averred
in the particulars
of claim that the defendant granted the plaintiff the right to supply
such products, (hereinafter referred to
as “the products”),
inter alia to public bodies, the financial sector, small to medium
companies and customers as agreed
from time to time.
[5]
It also appears from the copy of the BRA annexed to the particulars
of claim that clause 3.1 provided that the term of the BRA
was 12
months from the date thereof, renewable automatically, until both
parties agreed to terminate the said agreement, as provided
in clause
3.2. It was also specifically provided in clause 3.2 that the
BRA could be terminated by either party upon three
months written
notice to the other party.
[6]
It is stipulated in the particulars of claim that clause 14 of the
BRA envisaged that the products could be sold by the plaintiff
to its
customers in two ways: firstly, on the basis of sales invoiced
by the plaintiff to its customers and secondly, on
the basis of sales
invoiced by the defendant to customers of the plaintiff. In relation
to the former category of sales, it is
stated in clause 7.5 of the
particulars of claim that clause 14 of the BRA provided that the
plaintiff would be entitled to a commission,
referred to in practice
as a “rebate”. In relation to the latter category of
sales, it is stated in clause 7.6 of the
particulars of claim that
clause 14 of the BRA read with schedule 1 of clause 4 provided that
the plaintiff would be entitled to
a commission from the defendant.
[7]
It is also asserted in the particulars of claim that pursuant to the
conclusion of the BRA, the parties duly represented, concluded
a
written rebate agreement on the 21
st
of June 2007. The
said agreement, which is annexed to the particulars of claim marked
“B”, is referred to in the particulars
of claim and this
judgment as “the Rebate Agreement”. The Rebate Agreement
provided for the agreed rebate percentage
payable by the defendant to
the plaintiff.
[8]
It is further indicated in the particulars of claim and the annexures
thereto that during the course of their dealings with
each other
within the framework of the BRA, the parties concluded a further
agreement styled a deed of determination on the 2
nd
of
December 2009. The said agreement, which is annexed to the
particulars of claim marked “C”, is referred to in the
particulars of claim and this judgment as “the Deed of
Determination.” It appears that the said agreement is premised
upon a dispute between the parties relating to the formulation of the
amounts payable by the defendant to the plaintiff in respect
of the
sale of the products for the period 1 March 2006 to 31 October 2009.
Thus, the Deed of Determination sets out a formula
and percentages
for the calculation of the amounts payable by the defendant to the
plaintiff for sale of the products in the stated
period.
[9]
In these circumstances, the plaintiff avers that in July 2009, the
defendant repudiated the BRA by informing the plaintiff that
it would
no longer supply products as required in terms of the BRA. It is also
stated in the particulars of claim in this regard
that the said
repudiation of the BRA was not accepted by the plaintiff. It is
further averred in paragraph 13 of the particulars
of claim that:
“
13
As a result of the repudiation the plaintiff has suffered the
following damages:
13.1
loss of rebates in respect of sales invoiced by the plaintiff to its
customers; and
13.2
loss of commission in respect of sales that the defendant would make
directly to the plaintiff’s
customers.”
[10]
Against the general averments set out above, it is specifically
averred in relation to claim A for loss of rebates in the particulars
of claim that by applying the formula and percentages referred to in
the Deed of Determination, the plaintiff’s damages were
computed to be the sum of R61 510 425-76, calculated on the basis set
out in annexure “D” to the plaintiff’s
particulars
of claim. The said annexure “D” incorporated “forecasted
calculations” on the basis of a 15%
increase as well as
estimated sales and rebates for the periods July 2009 to June 2010,
July 2010 to June 2011, July 2011 to June
2012 and July 2012 to June
2013.
[11]
It is further stated in paragraph 15 of the particulars of claim that
the said claim in the sum of R61 510 425-76 constitutes
the
plaintiff’s loss of rebates for the period December 2009 to May
2013, based inter alia on the plaintiff’s “historical
trading figures and a projected estimated growth of 15%”.
[12]
It is further averred in paragraph 17 of the particulars of claim
that the aforesaid damages in the sum of R61 510 425-76 flow
directly
from the defendant’s repudiation of the BRA, alternatively were
in the contemplation of the plaintiff and the defendant
at the time
of the conclusion of the BRA.
[13]
As regards claim B, it is specifically averred in the particulars of
claim that if the defendant took orders directly from
the plaintiff’s
customers, the defendant was obliged to pay the plaintiff a
commission equal to a percentage fee in force
at the time of the
order. It is accordingly averred in this context that it was an
implied term of the BRA that the defendant would
account to the
plaintiff on demand, in respect of all orders taken directly by the
defendant from the plaintiff’s customers,
listed in annexure 1
of the Deed of Determination.
[14]
As with claim A, it is also averred specifically in relation to claim
B for loss of commission in the particulars of claim,
that the agreed
fee in force at the time of the repudiation was determined by the
formula and percentages applied in the Deed of
Determination. It is
further averred in the plaintiff’s particulars of claim in
relation to claim B that after the repudiation
of the BRA by the
defendant in July 2009, the defendant took orders and supplied
products directly to the plaintiff’s customers.
[15]
It is finally averred in the context of claim B, that in order to
ascertain the quantum of the commission, payable to the plaintiff,
the defendant is obliged to account to the plaintiff in respect of
orders taken by the defendant from the plaintiff’s customers;
the price and invoice of the value of such orders; and the commission
due to the plaintiff in respect of such orders. Thus, the
plaintiff
seeks a debatement of account from the defendant, as well as an order
that the plaintiff is paid whatever appears to
be due to the
plaintiff upon such debatement of account.
GENERAL
LEGAL FRAMEWORK
[16]
In terms of rule 18(4) of the Uniform Rules of Court, every pleading
must set out material facts upon which it relies for its
claim, with
sufficient particularity to enable the opposite party to reply
thereto. On the basis of this rule, it is well established
that the
plaintiff’s particulars of claim must incorporate sufficient
particularity to enable the defendant to plead thereto.
[1]
The absence of sufficient particularity may render the pleading in
question either vague or vague and embarrassing in the sense
that the
excipient is prejudiced.
[17]
It is also well established in our law, that in order to sustain any
specific cause of action, the plaintiff’s particulars
of claim
must set out every fact, which is necessary to prove such cause of
action. However, it is not necessary for the plaintiff
to set out in
its particulars of claim every piece of evidence, which is necessary
to prove every fact.
[2]
Thus,
it was stated in the case of
Jowell
v Bramwell-Jones and Others
1998
(1) SA 836
(W) at 903A-B:
“
A distinction must
be drawn between the
facta probanda,
or primary factual
allegations which every plaintiff must make, and the
facta
probantia,
which are secondary allegations upon which the
plaintiff will rely in support of his primary factual allegations.”
[18]
It is also a basic principle in relation to the wording of the
plaintiff’s particulars of claim that such particulars
must be
lucid and logical in the sense that the plaintiff’s cause of
action must appear clearly therefrom. As such, the defendant
should
be able fairly and reasonably to respond thereto.
[3]
[19]
As regards a claim for damages, in the case of
Holmdene Brickworks
(Pty) Ltd v Roberts Construction Co. Ltd
1977 (3) SA 670
(A) at
687, Corbett JA made reference to the well-known rules in the English
case of
Hadley v Baxendale
(1854) 150 ER 145
, which reads as
follows (at p 151) :
“
Where two parties
have made a contract which one of them has broken, the damages which
the other party ought to receive in respect
of such breach of
contract should be such as may fairly and reasonably be considered,
either arising naturally, i.e., according
to the usual course of
things, from such breach of contract itself, or such as may
reasonably be supposed to have been in the contemplation
of both
parties, at the time they made the contract, as the probable result
of the breach of it.”
[20]
After the learned Judge further pointed out that our law and the laws
of England are in substantial agreement on this point,
he stated that
the first rule in the
Hadley
case, are often labelled
“general” or “intrinsic” damages, whilst, the
second rule are called “special”
or “extrinsic
damages.
EXCEPTIONS
[21]
As already indicated the defendant relies upon eight interlinked
grounds of exception.
The
First Ground of Exception
[22]
The first cause of complaint by the defendant is that whilst claim A
for damages is premised upon the repudiation of a contract
concluded
in 2005, the formulation of the said damages is premised upon the
Deed of Determination concluded between the parties
on the 2
nd
of December 2009 in relation to a dispute for a specific period. This
is exacerbated by the fact that whilst this claim for rebates
is
premised upon sales “invoiced” by the plaintiff, the
amount of the damages claimed is quantified on the basis of
projected
sales for a period of three years from December 2009 to May 2013.
This is so despite the fact the BRA could be terminated
upon three
months notice.
[23]
I agree that to the extent that paragraph 13.1 of the particulars of
claim relates to sales “invoiced” by the plaintiff,
the
averments in Annexure “D” do not substantiate the facts
set out in paragraph 13.1 of the particulars of claim and
evidence in
relation to Annexure “D” cannot prove the facts alleged
in paragraph 13.1 at the trial. Thus, to the extent
that paragraph
13.1 of the particulars of claim relating to damages in the form of
loss of rebates is premised, in plain English,
upon actual sales, it
is incongruous for the plaintiff to calculate such loss in paragraph
15 of the particulars of claim inter
alia on the basis of historical
trading figures and projected income for the period December 2009 to
May 2013. Stated in another
way, even if the allegations in Annexure
“D” are proven at the trial, the alleged loss of rebates
based upon sales
actually invoiced will not be proved.
[24]
In my view, it does not avail the defendant to rely on the totality
of the plaintiff’s particulars of claim premised
upon the
notional possibility in terms of the BRA indicating that the
plaintiff had two streams of income from the defendant. The
fact is
that the defendant is called upon to respond to an averment in plain
English that the plaintiff suffered loss of rebates
in respect of
sales actually invoiced by the plaintiff to its customers. The plain
grammatical construction of paragraph 13.1 of
the particulars of
claim (unlike paragraph 13.2 relating to claim B) does not connote
that claim A relates to losses for sales,
which the plaintiff
would
or
should
have invoiced, but for the defendant’s
averred repudiation.
[25]
It is also my view that the suggestion by the defendant’s
counsel to the effect that the wording of paragraph 13.1 of
the
particulars of claim ought to be construed in the totality of the
particulars of claim, effectively demonstrates that the particulars
of claim are contradictory and/or vague and embarrassing in the sense
that paragraph 3.1 has at least two meanings. Thus, as McCreath
J
stated in the case of
Trope,
the
defendant is left guessing as to the actual meaning conveyed in the
pleading.
[4]
This is
particularly so as paragraph 13.2 of the particulars of claim
(relating to claim B) clearly states that the plaintiff suffered
damages as a result of sales the defendant “would” make
directly to the plaintiff’s customers.
[26]
For the reasons given above as well the further findings in relation
to the remaining grounds of exception, it is my view that
the
exception to the particulars of claim relating to the averments
pertaining to claim A as a whole, must accordingly be upheld.
The
Second Ground of Exception
[27]
The second cause of complaint by the defendant is that whilst claim B
for damages is premised upon the repudiation of a contract
concluded
in 2005, the computation of the said damages is premised upon the
Deed of Determination concluded between the parties
on the 2
nd
of December 2009.
[28]
In my view, the primary factual allegations, which the plaintiff must
make in relation to claim B, are incorporated in the
particulars of
claim. The secondary allegations relating to the computation of the
damages premised inter alia upon a proper debatement
of account by
the defendant do not have to be set out in the particulars of claim.
Counsel for the plaintiff conceded as much by
contending that if the
cause of complaints relating to claim A is removed, the particulars
do disclose a cause of action in relation
to claim B, autonomously of
claim A.
[29]
This ground of exception must accordingly be dismissed, given my
findings relating to claim A.
The
Third Ground of Exception
[30]
The third cause of complaint in relation to claim A is that whilst
the plaintiff avers that it suffered loss of rebates in
respect of
sales invoiced by the plaintiff to the plaintiff’s customers,
the plaintiff fails to particularize sales actually
invoiced to the
plaintiff’s customers. Thus, as already stated in the context
of the first ground of exception, it is contended
that instead of
providing particularity with respect to sales “invoiced”
by the plaintiff, the plaintiff quantifies
its alleged loss in this
respect on the basis of an estimate incorporated in Annexure “D”.
The said estimate in Annexure
“D” is based upon
historical trading figures for a specific period and a projected
estimated growth of 15%.
[31]
For the reasons already given in relation to the first ground of
exception, it is my view that as a result of the above inconsistency,
the particulars of claim lack averments necessary to sustain the
plaintiff’s cause of action in relation to claim A.
Furthermore,
the particulars of claim in this respect only in
relation to claim A (and not claim B) are also rendered vague and
embarrassing
on this basis.
The
Fourth Ground of Exception
[32]
The fourth cause of complaint, which counsel for the plaintiff
characterized as the main exception, relates to the averment
in the
particulars of claim that the plaintiff’s claim for damages
flow directly from the defendant’s repudiation of
the BRA,
alternatively were in the contemplation of the plaintiff and the
defendant at the time the BRA was concluded on the 12
th
of
May 2005. This is so despite the fact that the alleged damages are
computed on the basis of the Rebate Agreement concluded on
the 21
st
of June 2007, and the Deed of Determination on the 2
nd
of
December 2009.
[33]
For the reasons already given, the claim for damages arising from
sales invoiced by the plaintiff in relation to claim A is
not
sustained by the quantification of such averred damages on the basis
of historical sales for a different period and projected
estimates.
Moreover, to the extent that it is suggested that the damages in this
respect arise from sales, which the plaintiff
would have invoiced,
the particulars of claim are vague and embarrassing in that at least
two possible meanings can be attributed
to the wording in the
particulars of claim.
[34]
This ground of exception is accordingly also upheld in relation to
claim A.
The
Fifth Ground of Exception
[35]
This ground of exception, premised upon the averment that the
plaintiff’s claim constitutes substitutionary damages,
was not
pursued at the hearing of this matter.
The
Sixth Ground of Exception
[36]
The defendant complains that paragraph 13.2 of the plaintiff’s
particulars of claim is vague and embarrassing. As
already
indicated, notwithstanding the problematic aspects relating to claim
A, referred to the above, it is my view that the primary
factual
allegations, which the plaintiff makes in the particulars of claim in
relation to claim B, autonomously of claim A, properly
disclose a
cause of action for damages. Thus, if these factual allegations are
proved at trial, autonomously of claim A, the plaintiff
will have a
cause of action in relation to claim B.
[37]
In these circumstances, this ground of exception cannot be upheld.
The
Seventh Ground of Exception
[38]
The seventh cause of complaint is that to the extent that the
plaintiff claims special damages in relation to claim A, the
plaintiff’s particulars of claim lacks averments necessary to
sustain this claim for special damages.
[39]
The plaintiff’s counsel concedes this complaint and indicates
in her heads of argument that the plaintiff’s particulars
of
claim will be amended to remove this cause of complaint. It may also
be mentioned in this respect that the plaintiff’s
counsel
indicated at the hearing of this matter that she had advised the
defendant that the amendment of the particulars of claim
should only
be effected after this court had adjudicated upon all the exceptions
raised by the defendant.
[40]
Notwithstanding the concession by the plaintiff’s counsel in
this respect, the defendant’s counsel emphasized that
to the
extent that the plaintiff’s claim incorporates a claim for both
general and special damages over a period of some
three years, it is
significant that clause 3.2 of the BRA provides that the BRA may be
terminated at any time upon three months
written notice to the other
party.
[5]
Thus, the defendant’s
counsel contended that the claim for damages over a period of three
years could not have been in the
contemplation of the plaintiff and
the defendant at the time of the conclusion of the BRA, nor do such
damages flow directly from
the defendant’s repudiation of the
BRA.
[6]
[41]
The plaintiff’s counsel indicated in this context that in terms
of clause 3.1 of the BRA, the agreement between the parties
was
automatically renewable after an initial period of 12 months, on an
indefinite basis, until the BRA was terminated as provided
in clause
3.2. As such, it was suggested that the parties legitimately
contemplated the renewal of the BRA on an indefinite basis.
[42]
For the reasons already given above, I am of the view that the
averments in the plaintiff’s particulars of claim relating
to
claim A as a whole are excipiable. Thus, to the extent that I
propose granting the plaintiff leave to amend its particulars
of
claim in relation to claim A as a whole, autonomously of the
averments relating to claim B, the competing submission of counsel
in
this regard are effectively moot points.
[43]
Whilst I cannot of course comment on the amended particulars of claim
in the context of the present hearing, I take cognisance
of the fact
that the plaintiff specifically avers that the BRA was not terminated
pursuant to the defendant’s repudiation.
Thus, it appears that
to the extent that clause 3.1 suggested an agreement between the
parties for an indefinite period (until
terminated as envisaged in
paragraph 3.2 of the BRA), the plaintiff’s particulars of claim
suggest that the BRA continued
for more than three months after the
defendant’s averred repudiation. Be that as it may, as already
indicated, as a result
of my other findings in relation to the
averments in support of claim A as a whole, it is not strictly
necessary for me to express
a view on the competing averments in
relation to this ground of exception.
The
Eighth Ground of Exception
[44]
The eighth cause of complaint is that claim A of the particulars of
claim is a duplication of claim B, as both claims are for
the same
cause of action, for the same period and arising from the same
breach. Thus, it was suggested by the defendant’s
counsel in
this respect, that paragraph 13.2 relating to damages arising from
loss of commission, could theoretically include sales
that were made
by the defendant directly to the plaintiff’s customers. Be that
as it may, the defendant’s counsel also
correctly conceded that
if the defendant’s exceptions to claim A are upheld, then the
particulars of claim relating to claim
B (autonomously of claim A)
would not be excipiable.
[45]
It may be noted in this context that even though I have found that
the averments relating to claim A of the plaintiff’s
particulars of claim are excipiable for the reasons given above, it
appears not to be in dispute that the BRA envisaged two streams
of
income emanating from rebates and commission. It can merely be noted
at this juncture in this context that the defendant can
hypothetically be called upon to plead to a claim for damages
premised firstly upon loss of rebates, which the plaintiff
would
have earned, but for the defendant’s averred repudiation of the
BRA, as well as damages premised upon claim B. However, in
the
absence of amendments to the particulars of claim in the present
form, the defendant is called upon to plead to a claim for
rebates
arising from sales
actually
invoiced by the plaintiff.
CONCLUSION
[46]
Therefore, for the reasons given, the averments relating to claim A
are excipiable, and I propose granting the plaintiff leave
to amend
its particulars of claim in this respect.
COSTS
[47]
Even though all the grounds of exception have not been upheld, I
consider the defendant to have been substantially successful,
to the
extent that the exceptions relating to claim A as a whole have been
upheld. In these circumstances, I am of the view that
it is just and
equitable that the costs of the present hearing be borne by the
plaintiff. In view of the amount of the plaintiff’s
claim, and
the obvious importance of this matter to the parties, I am also of
the view that the costs of two counsel are also warranted.
ORDER
[48]
Based on the aforegoing, the following order is made:
i)
The exceptions relating to claim A in the particulars of claim are
upheld,
and the averments in the plaintiff’s particulars of
claim in this respect are set aside.
ii)
The plaintiff is granted leave to deliver amended particulars of
claim within
20 court days from the date hereof.
iii)
The plaintiff is directed to pay the defendant’s costs,
including costs occasioned
by the utilization of two counsel.
DATED
AT JOHANNESBURG THIS 14
th
DAY OF MARCH 2014
_________________________
MAYAT
J
JUDGE
OF THE HIGH COURT
OF
SOUTH AFRICA
Plaintiff’s
Counsel
: P.
Cirone
Plaintiff’s
Attorneys
: Werksmans
Attorneys
Excipent/Defendant’s
Counsel : D.M.
Fine SC
H.J.
Smith
Excipient/Defendant’s
Attorneys : Cliffe
Dekker Hofmeyr Inc
Date
of Hearing
: 10
th
of March 2014
Date
of Judgment
: 14
th
of March 2014
[1]
Nell
and Others v McArthur and Others
2003(4)
SA 142 at 145E-147B
[2]
Mckenzie
v Farmer’s Co-operative Meat Industries Ltd
1922
AD at 23
[3]
See for example, the
dicta
of
McCreath J in the case of
Trope
v South African Reserve Bank and Another
1992(3)
SA 208 TPD at 210G-I
[4]
at 211D-F
[5]
The defendant’s counsel made reference in this context to the
case of
Telematrix
(Pty) Ltd v Advertising Standards Authority of SA
2006(1)
SA 461 SCA at 464, para [3] where Harms JA held that exceptions
should be treated sensibly in so far as they provide as
a mechanism
to weed out cases without legal merit. As such, the learned Judge
held that an over-technical approach destroys their
utility.
Reference was also made to the case of
SA
Enterprise Development Fund v ICC Africa Ltd
2008(6)
SA 468 WLD at 480G-I, where Van Oosten J held that it is appropriate
and necessary in certain circumstances for the court
to raise an
exception
mero
motu
to
ensure that justice is done, particularly so, where a fundamental
issue arises, which the parties have overlooked or failed
to
recognize.
[6]
As stated by the Appellate Division in this respect in the case of
Shatz
Investments (Pty) Ltd v Kalovyrnas
1976(2)
SA 545 (A) the decisive time for ascertaining the parties’
contemplation relating to any loss upon breach of a contract,
is the
time when the parties contracted and not when the contract is
breached.