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[2010] ZAGPPHC 577
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Mochachos Brands (Pty) Ltd v Est Acg Trading Enterprises CC and Another (39051/2009) [2010] ZAGPPHC 577 (1 February 2010)
IN
THE HIGH COURT OF SOUTH AFRICA
(NORTH
GAUTENG HIGH COURT, PRETORIA)
Date: 2010-02-01
Case Number:
39051/2009
Not reportable
Not of interest to
other judges
In
the matter bewteen:
MOCHACHOS
BRANDS (PTY)
LTD
.................................................................................................
Plaintiff
and
EST
ACG TRADING ENTERPRISES
CC
.............................................................................
First
Defendant
GHELANI,
ATUL
CHHOTALAL
.......................................................................................
Second
Defendant
JUDGMENT
SOUTHWOOD J
[1] The plaintiff
applies for summary judgment against the defendants, jointly and
severally, for payment of the sum of R211 512,00,
interest and costs
on the scale as between attorney and own client. The plaintiff’s
claim against the first defendant is
based on a written franchise
agreement entered into on 15 March 2006 in terms of which the
plaintiff granted to the first defendant
the right to operate the
franchise business, use the plaintiffs trade marks and intellectual
property and have access to the plaintiffs
expertise, knowledge,
experience, research, business acumen and operating manual and the
first defendant undertook to pay to the
plaintiff an agreed royalty.
The amount claimed represents the unpaid royalties for the period
July 2006 to May 2009. The plaintiffs
claim against the second
defendant is based on a deed of suretyship in terms of which the
second defendant bound himself as surety
to the plaintiff for the
punctual payment of all sums which may become due by the first
defendant to the plaintiff in terms of
the franchise agreement.
[2] The defendants
oppose the application and have filed an unsworn statement by the
second defendant entitled ‘Opposing Affidavit’
(apparently prepared in October 2009) which was signed and initialled
by the second defendant but not commissioned before a commissioner
of
oaths, and have delivered an opposing affidavit signed by the second
defendant on behalf of both defendants on 20 January 2010.
It should
be noted that the plaintiff served this application for summary
judgment on 24 July 2009 and it has been postponed twice,
on 22
September 2009 and 18 November 2009, to enable the defendants to file
opposing affidavits.
[3]
To avoid summary judgment a defendant must file an affidavit which
demonstrates that the defendant has a
bona
fide
defence
to the action and which fully discloses the nature and grounds of the
defence and the material facts relied upon therefor
- see Rule
32(3)(b). This means that the defendant must set out in the affidavit
facts which, if proved at the trial, will constitute
an answer to the
plaintiffs claim and swear to this defence in a manner which is not
inherently and seriously unconvincing. The
latter requirement means
that the defendant must set out the material facts sufficiently fully
to persuade the court that what
the defendant has alleged, if it is
proved at the trial, will constitute a defence to the plaintiffs
claim. If the defence is averred
in a manner which appears in all the
circumstances to be needlessly bald, vague or sketchy, that will
constitute material for the
court to consider in relation to the
requirement of
bona
fides
-
see
Breitenbach v Fiat SA (Edms) Bpk
1976
(2) SA 226
(T)
at
227G-228F.
[4]
At the outset it must be accepted that the unsworn statement filed by
the defendants must be taken into account in deciding
whether the
defendants have a
bona
fide
defence.
The defendants’ counsel argued that the court could not look at
the statement because it is not an affidavit but
it is clearly the
defendants’ statement and he could not explain why it is
irrelevant and/or inadmissible. It seems to me
that if a defendant
chooses to place an unsworn statement as well as a sworn statement
before the court in answer to an application
for summary judgment
both statements must be considered by the court when it assesses the
bona fides
of
the defence. The unsworn statement does not dispute any of the
allegations in the plaintiffs particulars of claim and the defence
raised is that the first defendant has a counterclaim for more than
R4 million against the plaintiff. No details are supplied which
could
satisfy a court that there is a
bona
fide
defence:
clearly the defence is averred in a manner which is needlessly bald,
vague and sketchy. Furthermore, the counterclaim does
not appear to
be based on a breach of contract as none is alleged. It is striking
that the statement does not refer to the defence
now raised in the
opposing affidavit dated 20 January 2010: namely that the parties
agreed that no royalties would be payable in
terms of the agreement
until the first defendant had reached a break-even point. It is
inconceivable that if this was agreed in
July 2006 as the defendants
allege, it would not be mentioned in the statement.
[5] The opposing
affidavit in which this defence is raised does not explain why the
unsworn statement does not refer to the defence
or why the defendants
no longer rely on the counterclaim. In order to comply with the
non-variation clause in the agreement (i.e.
that variations to the
agreement can only be of force and effect if reduced to writing and
signed by the parties) the second defendant
states that the agreement
was reached by an exchange of correspondence. However he says that
the letters cannot be attached. According
to the second defendant
‘despite diligent search the two letters cannot be traced for
the moment’. However he furnishes
no facts to justify the
conclusion that a diligent search was made. It is simply a bald
statement. It is highly improbable, if
not inconceivable, that such
important letters would go astray and in the absence of a more
detailed and convincing explanation
it must be concluded that there
was no such agreement.
[6] The fact that
the plaintiff did not present a claim for royalties before the
summons was served does not establish a defence.
While it may be
consistent with the agreement averred, the plaintiff may have beer
content to let the royalties accumulate until
it was clear that
actior should be taken. This is consistent with the defendants’
unsworr statement where the defendant refers
to a discussion in May
200Í between the plaintiff’s financial director and the
second defendan when the financial
director delivered an ultimatum to
the secom defendant: either sell the franchise to the plaintiff for
R400 000 or th' plaintiff
would hold the defendant liable for the
royalties.
[7]
In view of the inconsistencies between the two statements and the
absence of material facts which demonstrate a defence I am
not
satisfied that the defendant has made out a
bona
fide
defence
to the plaintiff’s claim and the plaintiff is entitled to
summary judgment.
[8] The following
order is made:
Summary judgment is
granted against the first and second defendant jointly and severally,
the one paying the other to be absolved
for:
1. Payment of R211
512,00;
2. Interest on R211
512,00 calculated at the rate of 15,5 % per annumfrom 16 July 2009 to
date of payment
3.
Costs of suit on the scale as between attorney and own client.
B.R. SOUTHWOOD
JUDGE OF THE
HIGH COURT
CASE NO: 39051/2009
HEARD ON: 20 January
2010
FOR THE PLAINTIFF:
ADV. E.B. CLAVIER
INSTRUCTED BY:
Friedland Hart Solomon & Nicolson
FOR THE DEFENDANTS:
ADV. A. WILKINS
INSTRUCTED BY: Van
den Berg & Meintjes Inc.
DATE OF JUDGMENT: 1
February 2010