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[2016] ZAGPJHC 347
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Sasfin Bank Limited and Others v DCB Auto Spares Close Corporation (37622/2015) [2016] ZAGPJHC 347 (5 October 2016)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA,
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO:
37622/2015
DATE:
5/10/2016
In the
matter between:
SASFIN
BANK LIMITED
First
Plaintiff
REYNETTE
PIETERS N.O
Second
Plaintiff
RONALD
PIETERS N.O
Third
Plaintiff
and
DCB
AUTO SPARES CLOSE CORPORATION
Defendant
J
U D G M E N T
MAHALELO,
AJ
:
[1] This
is an exception against the plaintiffs’ particulars of claim on
the ground that it lacks the necessary averments
to sustain a cause
of action. The plaintiffs have advanced two alternative claims
designated as claim A and claim B against
the defendant. The two
claims are mutually exclusive and each is dependent upon the
non-existence of the other. In claim A the
first plaintiff instituted
an action as a cessionary. The first plaintiff relies on a written
invoice discounting agreement concluded
between it and Motor
Electrodiesel (SA) (Pty) Ltd (In Liquidation) (“
MED
”).
In claim B the second and third plaintiffs instituted action in the
alternative to the first plaintiff’s claim.
The second and
third plaintiffs’ claim is premised on the oral agreement
concluded between the defendant and MED.
BACKROUND
FACTS
[2]
Prior
to dealing with the complaints raised by the defendant it is
necessary to briefly set out the facts in this matter and to
then
determine whether the grounds raised are sustainable or not. For the
sake of ease reference the parties will be referred to
as in the main
action.
[3]
On 12
February 2013, the first plaintiff and MED concluded a written
invoice discounting agreement in terms of which the discounting
facility was afforded to MED. The material terms of the written
agreement were
inter
alia
the following:
3.1
“MED would at least every two weeks offer to sell to the first
plaintiff
all book debts which comply with clause 5 of the
discounting invoice agreement and which were owed to MED at the time
of the offer.
Every offer by MED to sell book debts to the first
plaintiff would be irrevocable and in writing in such form as might
be prescribed
by the first plaintiff from time to time and subject to
clause 6.3 shall be open for acceptance for a period of not less than
three
working days after receipt by the first plaintiff of the offer
by MED. The first plaintiff would at its discretion accept
or
reject the offer and if the offer was accepted shall thereby purchase
the book debts on all the terms and conditions of the
agreement, and
such book debts shall
ipso facto
have been ceded by MED to the first plaintiff (clause 2.2).
3.2
The first plaintiff’s
benefit to the accepted book debts would include all
rights and
claims of whatever nature relating to such book debts, including the
right to receive payment of the amount of the book
debts and all
rights ancillary thereto ( clause 2.6).
3.3
Upon receipt by the first
plaintiff of the offer made by MED, MED would
ipso
facto
and without any further act or
deed be deemed to have sold, ceded, assigned, transferred and made
over to and in favour of the
first plaintiff all its rights in and to
the accepted book debts, together with all MED’s rights in and
to all suretyships,
guarantees or other securities of any other
nature whatsoever given in MED’s favour in respect of such
accepted book debts,
as well as all such further rights as might be
necessary in order to enable the first plaintiff to enjoy the first
plaintiff’s
benefit (clause 2.7).
3.4
The first plaintiff would
(in addition to and without prejudice to any other rights
it might
have in terms of the invoice discounting agreement or otherwise) have
the right to
inter alia
,
institute proceedings in its own name for the recovery of any book
debt. (clause 10.2)
3.5
In the event of MED
committing a breach of any of the terms, conditions, undertakings
or
warranties in the invoice discounting agreement, or failing to pay
any monies due to the first plaintiff on demand, or being
placed
(whether provisionally or finally) to any other right which it might
have, forthwith to terminate the invoice
discounting
agreement by giving written notice to MED to that effect and
would further be entitled without prejudice to any
rights or remedies
which it might have in terms of the invoice discounting agreement or
at law. (clause16.1)
3.5.1
notwithstanding such termination, to retain and enforce against any
debtor any accepted
book debts which remain unpaid. (clause 16.11),
or
3.5.2
to resell to MED any accepted book
debts which remain unpaid as at date of termination. (clause
16.1.2)
3.6
To the extent that any book debts might not have been purchased by
the first
plaintiff pursuant to the invoice discounting agreement for
any reason whatsoever, or having been purchased by the first
plaintiff,
were thereafter sold back to MED by the first plaintiff or
to the extent that the first plaintiff might not have acquired
ownership
of a book debt intended to be purchased pursuant to the
invoice discounting agreement for any reason whatsoever, MED hereby:
(clause
30)
3.6.1
irrevocably cedes to the first plaintiff all its rights, title and
interest in and to all book
debts which were not owned by the first
plaintiff (clause 30.1),
3.6.2
acknowledges that the cession would be
in securitatem
debiti
and
as covering security for any amount which MED might at any time
thereafter owe to the first plaintiff from whatever cause arising
and
whether such indebtedness be a direct, indirect or contingent
obligation of MED and whether such obligation to the first plaintiff
arose in terms of, or pursuant to the invoice discounting agreement
or otherwise in any other manner whatever (clause 30.2),
3.6.3
expressly acknowledges that the provisions
of the cession would remain in operation for as long as
MED remain
indebted towards the first plaintiff for any amount whatever whether
actual or contingent, and/or any of the book debts
remain unpaid,
notwithstanding any termination of the invoice discounting agreement
that might have taken place at the instance
of either party or by
reasons of effluxion of time or any other manner whatever (clause
30.4)
3.6.4
the invoice discounting agreement (and the cession in favour of the
first plaintiff) commenced
on 12 February 2013” (clause 31.1)
[4] In
claim B, the plaintiffs alleged that MED provided goods and/or
services to the defendant from time to time alternatively
for a
period of time and the defendant in turn, provided goods and/or
services to MED from time to time alternatively for a period
of time.
The defendant was a debtor to MED and MED was in turn a debtor to the
defendant.
[5] On 28
May 2014 and in Cape Town, MED and the defendant concluded an oral
agreement (“
the Cape Town agreement
”). The
material express terms, alternatively tacit terms, further
alternatively implied terms of the agreement were
inter alia
the following:
5.1
during May 2014 MED was indebted
towards the defendant for goods provided and/or services rendered
from time to time;
5.2
during May 2014 the defendant was indebted towards MED in an
amount, which amount
exceeded the indebtedness of MED towards the
defendant for goods provided and/or services rendered from time to
time;
5.3
MED could not make payment of the indebtedness owed towards the
defendant,
5.4
MED and the defendant would set-off their respective indebtedness
owed to one another,
and
5.5
the defendant would pay R18,370.00 to MED (to effect the agreed
set-off)
[6] On or
about 4 June 2014 the defendant paid MED the amount of R18,370.00 to
effect the set-off as agreed in terms of the Cape
Town agreement.
[7] On 24
July 2014, MED was placed under provisional liquidation and on 4
September 2014 under final liquidation.
[8] As a
result of the winding up of MED the first plaintiff elected to
enforce the book debts owed to MED and ceded to it.
[9] The
first plaintiff alleged that during March 2014 the defendant was
indebted to MED in the amount of R489,693.80 and
due to the
above cession in favour of the first plaintiff (in terms of the
invoice discounting agreement), the defendant was therefore
indebted
to the first plaintiff in the same amount.
[10] On
23 October 2015, the first plaintiff instituted action against the
defendant claiming from it payment of the amount of R489,693.80
plus
interest. In the alternative, the second and third plaintiffs alleged
that the set-off effected between MED and the defendant
in terms of
the Cape Town agreement amounted to voidable preferences or undue
preference, alternatively collusive disposition as
MED disposed of
its property to the value of R489,693.80 and is liable to be
set aside in terms of section 29 and 30 of the
Insolvency Act No 24
of 1936 (“the
Insolvency Act&rdquo
;) read with section 340(1)
of the Companies Act No 61 of 1973 as read with item 9 of Schedule 5
of the
Companies Act 71 of 2008
. The second and third plaintiffs
therefore also claimed the amount of R489,693.80 from the defendant.
[11] The
defendant excepted to the plaintiffs’ particulars of claim. The
defendant raised three grounds of exception.
[12] The
first and second grounds of exception relate to claim A. The
defendant alleged that paragraph 7.4 of the plaintiffs’
particulars of claim lacks the necessary averments to sustain a cause
of action. The defendant contended that the first plaintiff
failed to
plead that MED has complied with its obligation referred to in clause
2.1 of the agreement by offering to sell to the
first plaintiff any
book debts which were owed to MED at the time of the offer and that
any such offer to sell the book debts was
accepted by the first
plaintiff.
[13] The
second ground of exception is to the effect that the plaintiffs have
failed to allege that the debt which is alleged to
have been owed by
the defendant to MED, constituted “
book debts
” as
contemplated in the invoice discounting agreement. The defendant
alleged that the term “
book debts
” contemplated
only debts which were in existence (albeit that an invoice might not
yet have been issued or rendered in respect
of such debt) and does
not relate to any future debts. According to the defendant, the
invoice discounting agreement was concluded
on 12 February 2013, only
debts which were in existence as at 12 February 2013 could constitute
“
book debts
” which were intended to form the
subject matter of the alleged cession. The defendant further
contended that the amount of
R489,693.80 as claimed by the plaintiffs
comprised amounts which were outstanding during the period 27
February 2014 to 27 May
2014, therefore the debt which is said to
have been owed by the defendant to MED was not in existence at the
time of the conclusion
of the cession and therefore cannot fall
within the definition of “
book debts
”. The
defendant furthermore contended that the first plaintiff’s
claim which is based on the alleged cession
is unsustainable in the
absence of any allegation which brings the debt previously owed by
the defendant to MED within the purview
of the subject matter of the
cession relied upon by the first plaintiff.
[14] The
third ground of exception relates to claim B. The defendant contended
that the plaintiffs do not allege, nor do they rely
upon any
agreement which purports to exclude the natural operation of a
set-off. The defendant further contended that in the absence
of such
agreement, set-off operates automatically,
de jure.
According
to the defendant,
ex facie
the particulars of claim, the
purported conclusion of the Cape Town agreement was unnecessary to
effect a set-off and no valid
agreement could have come into
existence which gave effect to a set-off and which would constitute a
voidable preference, an undue
preference or a collusive disposition
as contemplated in in
section 29
to
30
of the
Insolvency Act.
APPLICABLE
LEGAL PRINCIPLES
[15] The
court looks at the pleadings excepted to as they stand. The object of
an exception is to dispose of the case or a portion
thereof in an
expeditious manner. An exception founded on the contention that
summons discloses no cause of action, is designed
to obtain a
decision on a point of law which will dispose of the case in whole or
in part.
[16] In
the evaluation of this exception three preliminary observations are
apposite:
Firstly,
In
Colonial industries Ltd v Provincial Insurance Co Ltd
1920 CPD
627
at 630 Benjamin J stated with regard to the general approach
to exceptions that:
“
save
in the instance where an exception is taken for the purpose of
raising a substantive question of law which may have the effect
of
settling the dispute between the parties, an excipient should make
out a very clear, strong case before he should be allowed
to
succeed.
”
Secondly,
an exception is generally not the appropriate procedure to settle
questions relating to the interpretation of a contract.
Sun
Packaging (Pty) Ltd v Vreunlik
1996 (4) SA176 (A) at 186j.
Thirdly,
our courts have held that a commercial document executed by the
parties with a clear intention that it should be a commercial
operation should not lightly be held to be ineffective.
Burroughs
Machines Ltd v Chenile Corporation of SA (Pty) Ltd
1964 (1) DA
669 (W).
[17]
An exception is aimed at avoiding unnecessary evidence being led at
the trial.
Barclay’s
National Bank Ltd v Thompson
1989
(1) SA 547
(A) at 553. The excipient bears the
onus
of proving that upon every interpretation which the pleading can
reasonably bear, no cause of action is disclosed.
Francis
v Sharp
2004(3) SA 230 (C) at 233. In determining whether the
plaintiff’s pleadings are excipiable, a court must assume the
correctness of the allegations in the pleadings.
Marney
v Watson and Another
1978
(4) SA 140
CPA at 144F.
[18] It
is a basic principle that particulars of claim should be so phrased
that the defendant may reasonably and fairly be required
to plead
thereto. It is also trite that the object of pleadings is to enable
each side to come to trial prepared to meet the case
of the other and
not be taken by surprise. Pleadings must therefore be lucid and
logical and in an intelligible form, and the cause
of action must
appear clearly from the factual allegations made. In order to
ensure that a summons is not excipiable on the
ground that it does
not disclose a cause of action, the plaintiff must allege the
facta
probanda
(the facts which must be proved in order to disclose the
cause of action) and not the
facta probantia
, (the facts or
evidence which proves the
facta probanda
).
[19] In
McKenzie v Farmer’s Cooperative Meat Industries Ltd
1922
AD 16
at 23 the following definition of “
cause of action
”
was accepted by the Appellate Division:
“…
every fact which
it would be necessary for the plaintiff to prove, if traversed, in
order to support his right to judgment of the
court. It does not
comprise every piece of evidence which is necessary to prove each
fact, but every fact which is necessary to
be proved.
”
[20] In
Vermeulen v Goose Valley Investments (Pty) Ltd
2001 (3) SA 986
(SCA) Marais JA stated the following at page 997:
“
[7]
It is trite law that an exception that a cause of action is not
disclosed by a pleading
cannot succeed unless it be shown that ex
facie the allegations made by a plaintiff and any document upon which
his or her cause
of action may be based, the claim is (not may be)
bad in law.
”
In
Frank
v Premier Hangers CC
2008 (3) SA 594
(C) Griesel J stated as
follows at paragraph [11] page 600:
“
[11]
In order to succeed in its exception the plaintiff has the onus to
persuade the court that, upon every interpretation
which the
defendant’s plea and counterclaim can reasonably bear, no
defence or cause of action is disclosed. Failing this,
the exception
ought not to be upheld.
”
THE
EXCEPTION
[21] It
is trite that from the nature of exception proceedings, the court
must assume that the facts alleged in the relevant pleadings
are
correct. The excipient should therefore satisfy the court that
even with such an assumption, the pleading does not disclose
a cause
of action. No evidence is presented in exception proceedings.
[22]
In my view, the first plaintiff has pleaded the
facta
probanda
to sustain a claim under the invoice discounting agreement. I also
find that the exception raised in this regard does not meet
the
requirement that upon every interpretation which the pleading can
reasonably bear, no cause of action is disclosed. This relates
to
both grounds of exception advanced in claim A. It is incumbent on a
plaintiff to plead only a complete cause of action that
identifies
the issues on which the plaintiff seeks to rely, and on which
evidence will be led, and which allows the defendant to
plead to it.
In my view, the allegations in paragraph 7.4 of the particulars of
claim are sufficient to enable the defendant to
plead thereto. In any
event the defendant failed to state that the particulars of claim
cannot be supported by any reasonable interpretation.
Furthermore, no
prejudice is alleged that would prevent the defendant to plead to the
particulars of claim, or request for further
particulars would not
suffice to cure any vagueness in the event that allegations are
vague.
As
regards the second ground of exception, conflicting interpretations
may arise as to what was intended by clause 1.5.1 of the
invoice
discounting agreement regarding the term “
book
debts
”,
but in my view, the questions which may arise in that regard are to
be determined at the hearing of the matter and are
not capable of
being disposed of by way of exception. The respondent’s
pleadings cannot be said to be excipiable.
[23]
With regard to the third ground of exception, the plaintiffs pleaded
the terms of the Cape Town agreement. The validity of
that agreement
and the question whether that agreement may be void for vagueness do
not readily fall to be decided by way of exception.
See
Burroughs
Machines Ltd v Chenile Corporation of SA (Pty) Ltd
and
Sun
Packaging(Pty) Ltd v Vreulink supra
.
The
dispute surrounding the oral agreement concluded between the
defendant and MED therefore cannot be resolved at this stage of
the
proceedings.
The
third ground of exception must also fail.
[24]
Accordingly, the following order is made:
24.1
The exception is dismissed with costs.
_________________________________________________
B MAHALELO
ACTING
JUDGE OF THE HIGH COURT OF SOUTH AFRICA
GAUTENG LOCAL
DIVISION, JOHANNESBURG
APPEARANCES
Counsel
for the Plaintiff:
Adv
Van Tonder
Instructed
by:
Werksmans Attorneys
Counsel
for the Defendant:
Adv Van Beek
Instructed
by:
Schindlers Attorneys
Date of
Hearing:
4 August 2016
Date of
Judgment:
5 October 2016