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[2015] ZAGPJHC 96
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Germiston Central Real Estate CC v Ekurhuleni Metropolitan Municipality (31391/2013) [2015] ZAGPJHC 96 (13 April 2015)
IN THE HIGH COURT OF
SOUTH AFRICA
(GAUTENG LOCAL
DIVISION, JOHANNESBURG)
CASE NUMBER: 31391/2013
DATE: 13 APRIL 2015
In the matter between:
GERMISTON CENTRAL REAL ESTATE
CC
.....................................................................
Applicant
And
EKURHULENI METROPOLITAN
MUNICIPALITY
.....................................................
Respondent
JUDGMENT
STRAUSS, AJ:
1. The applicant seeks an order that
the respondent’s claim be dismissed pursuant to the
respondent’s failure to comply
with an order of court dated 16
April 2014 by Deverance AJ. The order referred to compelled the
respondent to produce documentation
listed in paragraphs 1, 2 and 5
of the applicant’s notice in terms of Rule 35(12) and also
inspection of documents listed
in paragraph 1, 2 and 3 of the
applicant’s notice in terms of Rule 35(14) within a period of
10 days of service of the order.
2. It is common cause between the
parties that the respondent did not produce the said documents listed
as ordered in terms of the
court order. The applicant therefore made
application for striking out of the respondent’s claim due to
non-compliance with
the court order. The applicant does so in terms
of Rule 30A of the Uniform Rules of Court.
3. There is also an application by the
respondent to amend its particulars of claim, this amendment was
objected to by the applicant.
It is necessary to set out the history
of this matter and I will shortly do so.
4. The respondent in this matter is the
plaintiff in the main action against the applicant as defendant. The
respondent set out
in its claim that it as a municipal public utility
is empowered through the relevant legislation and bylaws to supply
electricity,
water, refuse removal and other municipal services to
the applicant as regulated by the respondent’s consumer credit
agreement
policy adopted by it on 30 November 2006.The municipal
services provided to the applicant are in the relation to three
accounts
with their different account numbers set out in the
particulars.
5. The respondent in its claim alleged
that the applicant enjoyed the benefits of the supply of electricity,
water and municipal
services in respect of Erf 541, Wadeville
Extension 12, alternatively, undertook to pay the respondent the sum
determined by the
respondent in respect of the supply of electricity,
water and municipal services. The respondent alleged that despite
demand the
applicant made no payment in respect of the aforementioned
services for the period up until June 2013.
6. After receipt of the summons in
September 2014, the applicant caused the two notices to be served on
the respondent’s attorney.
The first notice was a notice in
terms of Rule 35(12) which called on the respondent to make available
for inspection or copies
of documents pertaining to a consumer credit
agreement that the respondent refers to in its particulars of claim,
which customer
agreement was entered into between the respondent and
applicant. Every reference in this notice is directed to this
consumer customer
agreement.
7. The second notice was a notice in
terms of Rule 35(14) which called on the respondent to produce copies
of documents in respect
of tax invoices despatched to the applicant
in reference to certain accounts held by the applicant, as well as
all monthly statements
of those accounts and all water and
electricity meter reading sheets and record of schedules in respect
of these accounts.
8. The notices were served on 7 October
2013, the respondent answered to these notices by supplying not the
customer agreement;
between the parties, but the respondent’s
Electric Bylaws as well as their consumer deposit policy, credit
control and debt
collection policies. The respondent also supplied
tax invoices from December 2002 to 2013 in respect of all the
accounts held by
the applicant, and also indicating that the linked
account numbers for these accounts were specified with other numbers.
The respondent
also supplied meter reading sheets in respect of the
account numbers and the linked account numbers for these accounts.
9. After receipt of the documents
produced by the respondent, none of the parties proceeded with any
further applications herein.
10. The applicant then on 18 February
2014, served a notice to compel the respondent to produce now only
documentation listed in
paragraphs 1, 2 and 5 of the applicant’s
Rule 35(12) notice and also inspection of the documents listed in
paragraph 1, 2
and 3 of the applicant’s Rule 35(14) notice,
within a period of 10 days of service of the order. The applicant
therefore
indicating that it had received some documents from the
respondent but regarded the production insufficient and required the
specific
consumer credit agreement referred to in the respondent
claim to be discovered.
11. The respondent delivered a notice
of intention to oppose the application to compel, but failed to file
an answering affidavit,
and on 16 April 2014 in the unopposed motion
court, Deverance AJ, granted an order that the respondent has to
produce the documentation
referred to within 10 days from date of
service of the order. The notice did not set out that the applicant
can after expiry of
10 days and after failure of the respondent to
produce the documents, make application for striking out of the
respondents claim.
12. The respondent also on 21 February
2014, served a notice of amendment indicating their intent to amend
their particulars of
claim. The applicant objected to the proposed
amendment on 3 March 2014. The applicant’s main objection being
that the proposed
amendment sought to change the aforesaid cause of
action against the applicant and would also render the respondent’s
particulars
of claim excipiable on the basis that it would be vague
and embarrassing.
13. The respondent also filed an
application for condonation for the late filing of their application
for leave to amend, which
was served on the applicant on 5 August
2014. The applicant filed an answering affidavit. The respondent
replied thereto. In
the meantime the court order of 16 April 2014
still stood.
14. The applicant therefore on 10 July
2014, now made application that the respondent’s claim be
dismissed or struck out,
pursuant to the respondent’s failure
to comply with the court order, dated 16 April 2014, and requested
cost against the
respondent. The respondent opposed this application
filed and answering affidavit to which the applicant replied.
15. This application was enrolled for 8
August 2014, but was postponed to 13 April 2015 and is now before me,
similarly the respondent’s
application for amendment of its
particulars of claim is also to be determined.
16. The respondent after postponement
of the matters on 8 august 2014, directed a letter to the applicant
informing them again that
they could not comply further with the
notices in terms of Rule 35(12) and (14) as they had furnished the
applicant with all the
documents in its possession, and that it had
no more other documents to produce and that they can therefore not
comply with the
court order.
17. The respondent also in this letter
set out that it had launched various applications to amend its
particulars of claim due to
the fact that there were no written
credit agreements concluded between the parties, but that the
necessary municipal services
were rendered by the respondent and that
it would base its claim as indicated in the notice to amend,
subsequently not on a consumer
credit agreement, but on the
provisions of the legislation and by-laws of the respondent. This was
the very reason why they could
not supply the written agreement as
the parties had not entered into any such agreement as set out in its
particulars of claim.
18. The applicable law in regards to an
application in terms of rule 30A is as follows:
“Non-compliance with rules
(1) Where a party fails to comply with
these rules or with a request made or notice given pursuant thereto,
any other party may
notify the defaulting party that he or she
intends after the lapse of 10 days, to apply for an order that such
rule, notice or
request be complied with, or that the claim or
defence be struck out.
(2) Failing compliance within 10 days
application may on notice be made to the court and the court may make
such order thereon as
it seems meet.”
19. The applicant thus in terms of this
rule seeks the respondent’s claim to be struck due to the
respondent’s non-compliance
with the order dated 16 April 2014.
This rule is a general rule to remedy non-compliance with the rules
where no other remedy
exists. As set out in: Absa Bank Ltd v The
Farm Klippan 490 CC
2000 (2) SA 211
, Epstein, AJ found at 214 I-J:
“Rule 30A has an important place
in the rules, in that, as I stated, it provides a remedy where none
exists elsewhere. However,
it could not have been intended by the
drafters of rule 30A to jettison the existing and effective remedies
provided in the specific
remedy rules. If it was so intended, it
would render such remedies negatory. The remedies in the specific
rules have always been
effective and there is no reason to denude
them of their efficacy.”
20. Both Rule 30A and Rule 37 set out
remedies for non-compliance. If one, however, has regards to the
rules as set out in Erasmus,
Rule 30A is applicable to non-compliance
specifically with regards to non-compliance of a notice in terms of
Rule 35(12). This
is exactly why the applicant obviously brought the
application in terms of Rule 30A due to the non-compliance it avers
by the respondent
not furnishing the documents as requested in its
notice in terms of Rule 35(12), calling on the respondent to supply
the consumer
credit agreement.
21. It is admitted that the court order
was not complied with, however, I have to have regard to the breach
of the court order.
I am mindful that a court will normally only
grant striking out of a claim of a party in unusual cases, due to the
fact that a
party can always comply and provide reasons for their
default. The applicant in the matter in casu has to place factors
before
this court to justify such an order. The respondent reasons
for non-compliance are that they cannot comply due to the fact that
they have already produced all the documents in their possession, and
they explain their default due to the fact that it is impossible
for
them to comply therewith as they are not in possession of the
consumer credit agreement.
22. When considering dismissing or
striking out the respondents claim, regards must be had if there was
deliberate and continuous
failure to comply and if it was done with
contumacy. The ultimate remedy, the dismissal of an action or the
striking of a defence,
is a drastic remedy and it is clear that the
power to grant such a remedy is discretionary and that discretion
must no doubt be
exercised judicially. This is set out in: Wanson
Company of South Africa (Pty) Ltd v Establissements Wanson
Construction De Material
Thermieque Société Anonyme
1976 (1) SA 275
(T):
“The central issue for decision
was whether the striking out of a defence could only be ordered in
cases of contumacy, i.e.
in cases of wilful refusals to comply. The
court held that a dictum in an earlier case had the effect that
contumacy was required,
puts an erroneous restriction on the
discretion which the rule confers on the court stating that contumacy
is a good reason for
ordering the dismissal of an action or the
striking out of a defence, but it is not the only reason.”
23. In the matter in casu the
respondent after receipt of the notices in September 2013, complied
immediately and discovered all
documents in relation to what they had
in their possession in relation to the services supplied by it to the
applicant.
24. Respondent also later in letters
directed to the applicant indicated that these were the only
documents in its possession, and
prior to the order to compel them,
they had launched an application to amend their particulars of claim.
The proposed amendment
was launched to negate the very consumer
agreement between it and the applicant by stating that its claim was
not based on such
a consumer agreement, simply because it did not
exist. Respondent therefore with its notice of amendment made the
applicant aware
of the fact that it would not rely on any such
consumer agreement and it would therefore not be able to provide any
copies and/or
documents in relation thereto. Despite this the
applicant proceeded to apply to the court to compel the very
discovery of these
documents and after obtaining the court order on
16 April 2014, still went ahead to make application for striking out
of the claim
of the respondent well knowing that the respondent could
not produce the very documents applicant requested.
25. The rules of court exist that
judiciable disputes may be channelled through the courts in a fair,
rational and predictable way.
The public interest in the functioning
of the courts of the land is undermined when parties simply ignore
the rules. If the rules
are allowed to be ignored the administration
of justice would be brought into disrepute if the court was to
condone any conduct
of a party flagrantly ignoring the rules, and
such conduct must be visited with the court’s displeasure.
26. In view of the fact what I have set
out and considered, I am of the view that the respondent has not
shown contumacy and that
such has not been established. The
respondent has also not shown a flagrant disregard for the Rules of
court and their explanation
for their non- compliance is reasonable.
27. The applicant argues that they
continued with the striking out application as the respondent was
male fide and wanted to circumvent
the order given on 16 April 2014.
Applicant says so, firstly, due to the fact that when it served the
notice to compel, the respondent
in turn served a notice to amend.
Applicant argues that the mere fact that this notice to amend was
delivered a few days after
its notice to set down the notice to
compel, is an indication that he respondent well knowing that it
could not produce the documents,
continued to serve a notice to amend
instead of filing an opposing affidavit setting out why it could not
deliver such documents.
They argue that the application for the
amendment is not bona fide.
28. The applicant’s contention in
this regard is on the one side quite correct. The respondent should
have filed an affidavit
setting out to the court that it could not
discover the said documents due to the fact that these documents were
not in its possession
and further that they were not going to rely on
them for future litigation between the parties.
29. I am not told why the respondent
did not file its affidavit in time before the order of Deverance AJ.
If they had filed an affidavit
I am sure that the order would not
have been granted. I also have to consider the knowledge of the
applicant. The applicant already
knew when the respondent filed their
proposed amendment in February 2014,thus prior to the applicant
obtaining the order to compel,
that the respondent was changing track
and was going to base its claim in future not on a consumer
agreement, but on the municipal
by-laws.
30. The applicant objected to the
proposed amendment of the respondent on 3 March 2014, thus also prior
to the order to compel was
obtained. The applicant’ objection
is aimed at the respondent’s cause of action being amended to
now base its claim
not on the written consumer credit agreement, that
does not exist, but on electrical by- laws that provided for the
supply of service
to the applicant. The applicant well knowing that
as set out by the respondent in the amendment that the agreement does
not exist,
still continued with an application to compel the
respondent to produce this very agreement.
31. The argument of the applicant that
the respondent’s notice to amend its particulars of claim was
made mala fides and to
usurp the court order dated 16 April is
incorrect and cannot be sustained. The application to amend was made
nearly two and a
half months prior to the court order granted on 16
April 2014. The respondent could by no way foresee that the
applicant would
continue with this application well knowing that the
particulars of claim were going to be amended excluding the very
documents
it wanted the respondent to produce and secondly, the
applicant had exercised its remedies and objected to the proposed
amendment.
32. The law in regards to what the
court has to consider when granting an amendment to a party has been
set out in various cases,
and I was referred to numerous matters in
this regard by both counsel. It is trite that an amendment will
normally be allowed unless
the application to amend is mala fides or
it would cause such an injustice to the other party that cannot be
cured by costs. If
there is a material amendment the court must
consider the prejudice or injustice the other party would suffer.
Courts would normally
allow an amendment to allow the real issue
between the parties to come to the fore. The court must always
distinguish between
an amendments introducing a new cause of action:
that is a right of action and one which merely introduces fresh or
alternative
facts supporting the original right of action.
33. An amendment may also not be
allowed to place on record an issue for which there is no supporting
evidence where evidence is
required. An amendment must raise an
issue that can go to trail, i.e. it must be of sufficient importance
to justify any procedural
disadvantages caused by the amendment
proceedings in the sense that the issue is viable or relevant or will
probably be covered
by the available evidence.
34. It is trite that each case has to
be considered on its own facts. The granting or refusal of an
application for an amendment
of pleadings is a matter of discretion
of the court, to be exercised judicially in the light of all the
facts and circumstances
of the case before it. In this regard see
GMF Kontrakteurs (Edms) Bpk & Another v Pretoria City Council
1978 (2) SA 219
(T) and Zarich v Parfatti N.O.
1962 (3) SA 872
(D).
35. The respondent argues that there
would be no prejudice to the applicant if the amendment is granted
and any prejudice can be
cured by a costs order. They argue that the
amendment is the right to proceed and having regard to the matter has
there has been
no indication from the applicant of any defence to
claim, except to persist that there was non-compliance with the court
order.
36. The applicant avers that if the
amendment is allowed it will make the pleadings of the respondent
excipiable due to the fact
that the linked accounts show no nexus
between the applicant and these linked accounts. I cannot at this
stage find that this
will be so, due to the fact that there are
various references by the respondent to the linked accounts and
respondent also referred
to the matter of Rademan v Moqhaka Local
Municipality
2013 (4) SA 225
CC that supports his argument to fact
that accounts can be linked and may be consolidated by the
respondent.
37. The applicant’s contention
that the amendment would make the pleadings vague and embarrassing is
without merit. Further,
I was not convinced that the pleadings would
become excipiable as no other basis for such exception was argued by
the applicant.
38. I was referred to the case of
Rademan by the respondent that indicated that accounts of the
respondent can be linked and consolidated
with other accounts and, as
I already stated, respondent referred to these linked accounts when
producing certain documents after
receipt of the notices in September
2013.
39. The applicant requested the court
not to grant the notice to amend, but that the court strikes the
respondents claim, and that
the respondent must first get their house
in order and reissue summons and start afresh.
40. Having regard to the cause of
action between the parties, it is set out in the un-amended
particulars of claim, as paragraph
7 - 9 also set out the cause of
action vis a vie the applicant, the respondent does not seeks
amendment of these paragraphs. The
amendment introduces the
electrical by- laws that regulate the supply of services to the
applicant, and the terms and sections
of the by-laws applicable are
pleaded in detail.
41. The particulars that stand
currently un-amended I find, sets out the cause of action, the right
of action that the respondent
has as a municipality against the
applicant as a close corporation being the owner of Erf 542,
Wadeville, to which the respondent
provided services of electricity
and all other services.
42. Paragraph 7 of the particulars of
claim it set out that the applicant enjoyed the benefits of such
supply of electricity, water
and municipal services in respect of the
abovementioned property and that in the alternative the respondent
would aver that the
applicant undertook to pay the respondent the sum
determined by the respondent for the supply of electricity, water
and/or municipal
services to the property.
43. Thus, the cause of action is
basically a supply of electricity, water and/or municipal services.
The respondent, however, in
its amendment now sets out, I find, fresh
and alternative facts supporting the original right of action and is
not introducing
a new cause of action, and respondent is simply
introducing a new agreement on which this cause of action is based.
44. In finding this my order is the
following:
1. The application to strike out the
respondent’s claim is dismissed.
2. The respondent is granted leave to
amend its particulars of claim, dated 21 August 2013, as set out in
the plaintiff’s
rule 28 notice of intention to amend, dated 19
February 2014.
3. The applicant is ordered to pay the
costs of the dismissal of the application for striking out the
respondent’s claim such
cost to be determined from 10 July
2014.(date of application for striking out).
4. The respondent is ordered to pay any
costs of amending its particulars of claim from 19 February 2014.
STRAUSS, AJ
ACTING JUDGE OF THE HIGH COURT
COUNSEL FOR APPLICANT: ADV S VAN
ASWEGEN
ATTORNEY FOR APPLICANT: MARAIS
STEVENS ATTORNEYS
COUNSEL FOR RESPONDENT: ADV T MABUDA
ATTORNEY FOR RESPONDENT: KUNENE
RAMAPHALA BOTHA INC
DATE OF HEARING: 13 APRIL 2015