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[2020] ZAECPEHC 7
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ATC South Africa Wireless Infrastructure (Pty) Ltd I and Another v Desai N.O and Another (262/2019) [2020] ZAECPEHC 7 (25 February 2020)
IN THE HIGH COURT OF
SOUTH AFRICA
EASTERN
CAPE LOCAL DIVISION, PORT ELIZABETH
CASE
NO: 262/2019
Date
heard: 22 August 2019
Date
delivered: 25 February 2020
In
the matter between:
ATC SOUTH AFRICA
WIRELESS
INFRASTRUCTURE
(PTY) LTD I FIRST
PLAINTIFF
ATC SOUTH AFRICA
WIRELESS
INFRASTRUCTURE
(PTY) LTD II SECOND
PLAINTIFF
and
SALEEM
DESAI N.O.
FIRST
DEFENDANT
SALIM
EBRAHIM ALLY N.O.
SECOND
DEFENDANT
JUDGMENT
JAJI
J:
[1]
This
is an opposed application for an exception as amplified in the notice
of exception dated 07 April 2019.
[2]
The
excipients except to plaintiff’s particulars of claim on the
basis that they fail to disclose a cause of action on the
following
grounds:
(i)
The lease was concluded between Eaton Towers
South Africa (reg. no. 2009/010714/07) and excipients in their
capacity as Trustees
of the Saldo Trust (See para 10 of the
Particulars of Claim);
(ii)
The said lease was concluded on 18 June 2015;
(iii)
Clause 14 of the lease prohibits other party from
ceding, delegating, assigning or otherwise disposing any of its
rights in terms
of the agreement without the consent of the other
party;
(iv)
The plaintiffs contend in the particulars of
claim (para 4) that ATC South Africa (ATC1) acquired the lease
agreement from Eaton
Towers with effect from November 2016; (
Eaton
Towers changed name to ATC (II) on 22 September 2016
);
(v)
The excipients contend that the effect of the
assignment
(ATC I acquiring lease agreement
from Eaton Towers)
is that Eaton Towers is no
longer the lessee with effect from November 2016 and the first
plaintiff (ATC I) became the lessee with
effect from November 2016.
(The defendants averred that the plaintiffs
failed to allege as they are required to, that the above assignment
was given effect
to with prior consent of excipients as required by
Clause 14 of the lease agreement.)
(vi)
Accordingly, excipients contended that in the
circumstances
ex facie
,
the particulars of claim read with the lease agreement, plaintiffs
have not complied with their obligations in terms of the lease
agreement as stated in paragraph 12 of the particulars of claim.
Submitted accordingly that the plaintiff’s particulars of
claim
fail to disclose a cause of action.
[3]
EXCIPIENTS’
HEADS OF ARGUMENT
(i)
The excipients essentially pleaded “
exceptio
non adimpleti contractus
.” The second
plaintiff (ATC II), formerly Eaton Towers, the original lessee. The
first plaintiff acquired Eaton Towers with
effect from November 2016;
(ii)
The above, submitted the excipients, amounted to
an assignment (ie cession of rights and delegation of obligations).
The two plaintiffs
have been joined despite the above assignment;
(iii)
Eaton Towers no longer has any
locus
standi
(by virtue of the assignment). ATC II
has no
locus standi
and may not enforce the contract because the requisite mandatory
written consent prior assignment was not sought and obtained;
(iv)
Appearing from the particulars of claim,
plaintiffs have not complied with obligations in terms of the
agreement. They have repudiated
its terms and therefore not entitled
to enforce the agreement in the manner pleaded without an amendment
which either eliminates
the assignment or produces the prior written
consent;
(v)
Absent
such an amendment, each of plaintiffs’ claims are mutually
destructive of each other eliminating a valid cause of action.
[4]
EXCEPTION
(i)
Clause 14 frowns on assignment without prior
written consent of the other (excipients herein). On plaintiffs’
own case, the
lease expressly provides for prior written consent
before assignment is effected;
(ii)
Herein, plaintiffs were required to allege and
prove either prior written consent or that assignment fell within the
exceptions
not requiring prior written consent (Clause 14). There can
be no assignment without obtaining prior written consent and as such
in either event Eaton Towers enjoys no
locus
standi
;
(iii)
The plaintiffs’ case as pleaded, Eaton
Towers divested its rights (consequential to the assignment). This is
done without
prior consent which amounted to repudiation of the lease
by Eaton Towers. The court was referred to a matter of
Universal
Storage Systems (Pty) Ltd v Crafford and others
2001
(4) SA 249
(W), quoting from
U-drive
Franchise Systems (Pty) Ltd v Drive Yourself (Pty) Ltd
1976 (1) SA 137
(D) at 149G-H. Herein the court upheld
exceptio
defence and dismissed the appeal accordingly. Milne J stated:
“
Clearly if the
applicant evinced an intention no longer to be bound by the contract
. . ., in my view, the respondents would be
entitled to treat the
contract as at an end, and the appellant would not be entitled to
enforce the restraint.”
(iv)
The court was further referred to Christie’s
Law of Contract in SA, 7
th
edition, it was submitted that
“a
plaintiff against whom the
exceptio
is successfully raised and whose time for performance has not run
out, may rectify matters by performing or tendering to perform
and
then again claiming performance or whatever relief it desires against
the defendant.” The court was also referred to
a matter of
BK
Tooling (Edms) Bpk v Scope Engineering Precision (Edms) Bpk
1979 (1) SA 391
(A) at 418 – 419. It was held in
BK
Tooling
that “one party to a
bilateral contract cannot call upon another party to perform on the
contract without performing his/her
part. . . Extent of plaintiff’s
failure to perform is immaterial. Plaintiff’s duty is to
perform . . ., no matter how
slight that failure maybe, entitles the
defendant to raise the
exceptio
. . .”
(v)
The excipients argued that plaintiffs’
failure herein related to an assignment without consent which was
material to the contract.
There is a basic idea of contract that
people must be bound by the contracts they make. The plaintiffs’
performance or tender
is part of its cause of action, it must
therefore plead it specifically and failure to do so will make its
declaration excipiable
when the excipients raise an exception, the
onus is on the plaintiffs to prove that it has performed, or has been
prevented by
the defendant to perform;
(vi)
Importantly, the court was referred to the matter
of
ESE Financial Services (PTY) Ltd v
Cramer
1973 (2) SA 805
(C)
,
in the context of an exception, the court stated that “
where
a plaintiff sues to enforce performance of an obligation which is
conditional upon performance by himself of a reciprocal
obligation
owed to the defendant, then the performance by him of this obligation
is a necessary pre-requisite of his right to sue
and should be
pleaded by him. Conversely the defendant may raise a defence of
exceptio non-adimpleti contractus
.”
(vii)
In
Van
Achterberg v Walters
1950 (3) SA
734
(T) at 745, it was held that “the creditor has to agree to
the new debtor in place of the old . . . , but there can be no
novation or delegation
[of which the
assignment of rights and liabilities under the lease is an example]
without agreement between the creditor and the
assignee.
”
(viii)
The excipients concluded in the relief they
sought that if there was no prior written consent, plaintiffs’
case was stillborn
and should not proceed to trial and the exception
would bring finality. They contended that plaintiffs should be
ordered to make
an amendment. Both ATC and Eaton Towers can never be
lessees. They must choose whether they rely on the assignment or
whether they
abandon such assignment and rely on lease with Eaton
Towers. Both plaintiffs seek access. Either Eaton Towers is the
lessee if
there was no assignment, or conversely, if there was a
valid assignment, then ATC is the party. But in the latter case, the
necessary
prior written consent must be sought and obtained and an
allegation to that effect must be made.
(ix)
Accordingly, excipients submitted that the
exception should be upheld with costs. Plaintiffs be afforded a
period of twenty (20)
days to file an amendment.
[5]
PLAINTIFFS’ / RESPONDENTS’
HEADS OF ARGUMENT
(i)
Briefly, the plaintiffs raised points
in
limine
viz:- the issue of a notice of bar
which was served to the excipients and requested them to file a plea.
Excipients did not file
any plea and were also barred from filing the
notice of exception;
(ii)
The second point in limine is that the exception
is limited to the grounds raised in the notice of exception.
Plaintiffs argued
that the excipients introduced further grounds of
exception which was not permissible. Plaintiffs in amplification
argued that
an exception should be clearly and concisely stated. It
further contended that a party is bound by the terms in which it is
framed
and by the issues which it raised.
(iii)
Plaintiffs submitted that the excipients have not
discharged the onus of showing that the pleading is excipiable. It
further submitted
that it is not plaintiffs’ pleaded case that
Eaton Towers ceded, delegated, assigned or otherwise disputed its
rights / or
obligation as envisaged in Clause 14. The court was
referred to the matter of
Sun Packaging
(Pty) Ltd v Vreulink
[1996] ZASCA 73
;
1996 (4) SA 176
(A)
where it was held that “an exception has a duty to persuade the
court that upon every interpretation which the pleading
in question
and in particular the document on which it is based, can reasonably
bear no cause of action is disclosed, failing this,
the exception
ought not be upheld.
[6]
EXCEPIENTS’
REPLY TO POINTS
IN LIMINE
(i)
Plaintiffs themselves took further steps in
setting the exception down and accordingly cannot rely on the notice
of bar;
(ii)
Plaintiffs filed heads of argument and opposed
the exception on merits seeking dismissal with costs. Plaintiffs
cannot turn around
after all these steps ad say it wants to rely on
an irregular step;
(iii)
A party is not simply entitled to treat the
irregular proceeding as a nullity. Rule 30(1) must be followed if a
party wants to rely
on an irregularity;
(iv)
The court was referred to a matter of
Trans-African Insurance Co Ltd v Maluleka
1956 (2) SA 273
(A) at 278F-G where it was stated that
“Technical objection to less than perfect procedural steps
should not be permitted
in the absence of prejudice, to interfere
with expeditious and possible inexpensive decision of cases on their
real merits.”
[7]
APPLICABLE LEGAL PRINCIPLES
(i)
It is so that if the matter proceeded to trial as
it is, lot of unnecessary evidence would have to be led. The
excipients correctly
pointed out that in any event, s 171 of the
Constitution allows the court to regulate its own proceedings.
Dismissing an exception
on technicalities would not be in line with
the constitution;
(ii)
The contention that the excipient introduced
further grounds is merely a technicality. The notice of exception,
paragraphs 1 –
8, clearly laid the basis of the exception. In
any event, it is trite that a party cannot plea its case on heads of
argument. The
contention that the excipient should have lifted the
bar is overtaken by events. Indeed, the plaintiffs took further steps
by setting
down the exception and filed heads opposing the exception
on merits;
(iii)
The crux of the plaintiffs’ pleaded case is
that Eaton Towers as a result of the assignment divested its rights.
This was
done without prior written consent. The pleadings are clear
in this regard and the plaintiffs cannot argue otherwise. The
excipients
upon any interpretation which the pleading in question,
contend that they can reasonably bear no cause of action. The
excipient
indeed has a duty to persuade the court in this regard;
(iv)
The
excipients have correctly argued that the plaintiffs do not deal with
issues raised i.e. plaintiffs’ failure to allege
compliance
with its obligations in the agreement relied upon. “
Exceptio
non adempleti
contractus
.”
The excipients simply showed the logical consequences and
implications of the plaintiffs’ failure. The court clearly
would take into account interests of justice when using its inherent
power to regulate its own proceedings;
(v)
The authorities and submissions by the excipient
are on point and the court is obliged to consider them carefully when
they have
such persuasive effect.
In
Bentel
Associates in re:- Bradford v Bentel Associates
2013
JDR 0623 (GSJ) para [76] , the court stated:
“
I have read the
authorities tendered by both sides for or against the grant of
exception. It is my considered view that the excipient’s
authorities were more suited and apt for their case. Plaintiff’s
authorities may have been relevant in other situations,
however, not
appropriate in this matter.”
This is precisely what
has happened in the matter at hand.
(vi)
A cession should not occur unless consented to in
writing. It is the same with the assignment. Importantly, exception
founded upon
the contention that summons disclose 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 avoiding leading of unnecessary
evidence at trial;
(vii)
In
Ocean Echo
Properties 327 CC v Old Mutual Life Assurance Company
SA Ltd
,
2018
ZASCA 09
, it was held that:
“
Leave to amend is
not a matter of an indulgence, it is a matter of course unless there
is good reason that the pleading cannot be
amended. No good reason
was evident or attested in this case.”
It is so with the matter
at hand save for technicalities.
Froneman J at para (31) held
that:
“
The outcome
either way of the exception will have no final effect on the issues
between the parties. Even if the exception is upheld,
the respondent
will have the opportunity to amend its particulars of claim.”
(See
Mlamli Baliso v Firstrand Bank Ltd t/a
Wesbank
(2016) ZACC 23).
Importantly,
“where an exception is taken, a court
looks only to the pleading excepted as it stands not to facts outside
these stated in
it.”
(Para 33) (Supra)
(viii)
At para 44.3 (the Constitutional Court in
JP
Hendrick Pretorius v Transport Pension Fund and others
,
case no CCT 95/17 CC, the court stated that “the object of an
exception is to dispose of a case or a portion of it in an
expeditious manner by weeding out cases without legal merit,
regardless of the complexity of the legal question.”
(ix)
At page 70,
“the
main purpose of an exception that no cause of action has been
disclosed is to avoid the leading of unnecessary evidence
at trial.”
This is precisely what the excipients have submitted.
(x)
In the matter of
Rahim
Khan N.O v Maxprop Holdings (Pty) Ltd and another
(084/2018) ZASCA 171 (30 November 2018), at para 51, the court stated
that “the principles governing the formulation of a
cause of
action are trite. The plaintiff must only plead a complete cause of
action which identifies the issues upon which the
plaintiff seeks to
rely, and on which evidence will be led, in intelligible and lucid
form and which allows the defendant to plead
to it.
Herein, the plaintiff has failed to plead and formulate a cause of
action at least as the pleadings stand.
(xi)
At para 21 above, it is stated that
“The
law governing exceptions s and the consequential relief, if upheld is
clear. 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/her cause of action may be
based, the claim is (not may be)
bad in law.”
(See
Vermeulen v Goose Valley Investments
(Pty) Ltd
2001 (3) SA 986
(SCA) para 7.
The excipient has shown without a response from the plaintiff on
merits that the claim is bad in law in the manner
pleaded.
CONCLUSION
[8]
The excipients herein have successfully persuaded
me that upon every interpretation of the pleading it can reasonably
bear, particularly
the document upon which it is based (lease
agreement), it does not disclose a cause of action. There is no
response on merits from
the plaintiffs. The particulars of claim as
currently pleaded do not disclose a cause of action. Accordingly, the
exception is
upheld.
[9]
I, therefore make the following order:-
(i)
Exception is upheld with costs including costs of
two counsel;
(ii)
Plaintiff is ordered to file an amendment to its
particulars of claim within a period of twenty (20) days of this
order.
__________________________
N
P JAJI
JUDGE
OF THE HIGH COURT
APPEARANCES
Counsel
for the excipients
:
Advocate
Ameer SC
Attorneys
for the excipients
:
RAEES
COTHIA ATTORNEYS
c/o ADELINE DEYSEL
ATTORNEYS
12 Buckingham Road
Mill Park
PORT ELIZABETH
6001
Tel: 082 529 6558
Counsel
for the Respondents
:
Advocate Eksteen
Attorneys
for the respondents :
WERKSMANS
ATTORNEYS
c/o MINDE SCHAPIRO &
SMITH INC
Ascot Office Park
Building No.7, First
Floor
Conyngham Road
Greenacres
PORT ELIZABETH
Tel: 041 373 0664
Ref: WER6/0008