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[2023] ZAECQBHC 9
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Langkloof Steenwerwe (Pty) Ltd t/a Langkloof Bricks v Rowe Design and Consulting (Pty) Ltd (2568/2021) [2023] ZAECQBHC 9; 2023 BIP 11 (ECP) (3 March 2023)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
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SAFLII
Policy
IN
THE HIGH COURT OF SOUTH AFRICA
EASTERN
CAPE DIVISION – GQEBERHA
REPORTABLE/NOT
REPORATBLE
Case
No: 2568/2021
In
the matter between:
LANGKLOOF
STEENWERWE (PTY) LTD
t/a
LANGKLOOF
BRICKS
Excipient/Defendant
and
ROWE
DESIGN AND CONSULTING (PTY) LTD
Respondent/Plaintiff
JUDGMENT
MAKAULA
J:
A.
Introduction
:
[1]
This is an exception brought by the excipient (the defendant) against
the amended
particulars of claim: - (the particulars) issued by the
respondent (plaintiff). The defendant’s contention is
that
the particulars are vague and embarrassing alternatively lack
the necessary averments to sustain the plaintiff’s claim - the
plaintiff having been afforded an opportunity to remove the causes of
complaint and having refused or neglected to do so.
The
application is opposed by the plaintiff.
B.
Background
:
[2]
During the period 1 July 2013 to 25 July 2014, the plaintiff employed
the defendant
to construct 18 Vertical Shaft Bricks Kilns
(RVSBK)
[1]
. Subsequent to
the completion of the construction of the RVSBK, the parties entered
into a written agreement on 10 February
2017 governing their
relationship going forward pertaining to the RVSBK and other factors
concerning their relationship.
C.
The plaintiff’s case
:
[3]
The plaintiff avers in its particulars that during December 2020, the
defendant approached
it and requested a design evaluation and a quote
for the upgrade of six prior existing VSBK kilns (not defined or
encompassed in
the agreement) at its premises in terms of clause 4 of
the agreement. The plaintiff obliged and furnished the
defendant with
quotations. The defendant rejected the
quotations. The plaintiff further avers that the defendant,
despite its rejection,
went ahead and commenced to refurbish and
modify the six VSBK kilns making use of the plaintiff’s
intellectual property contrary
to and in breach of the agreement.
[4]
The plaintiff sues for an interdict prohibiting the defendant from
using its confidential
intellectual property set out in the agreement
and seeks damages in the amount of R623 587.50.
[5]
The crux of the plaintiff’s claim is that the defendant, acting
in terms of
clause 4 of the agreement, requested a design evaluation
and quotation from the plaintiff for the upgrade of the six VSBK
kilns
not defined or encompassed in the agreement. Upon
rejection of the quotations furnished by it, the defendant on 19
April
2021 commenced to refurbish and modify the six VSBK kilns at
its place using the plaintiff’s confidential intellectual
property
in contravention of various clauses of the agreement.
The plaintiff pleads that in clause 6 of the agreement, the defendant
acknowledged the confidentiality of the information and that the
plaintiff gave the defendant the right to use the confidential
information only as set out in the agreement. In amplification,
the plaintiff avers that the right to use the confidential
information is only in respect of the RVSBK and no other purpose as
it was done by the defendant.
[6]
The plaintiff submits that by using its confidential information, the
defendant breached
the agreement and the plaintiff suffered damages
as a consequence thereof. In computing the damages, the
plaintiff contends
that it complied with Rule 18 and had
differentiated between the market value of its confidential
intellectual property costs at
30% of the estimated project costs.
D.
Defendant’s case
:
[7]
The defendant argues that the particulars are excipiable because
clause 4.1 expressly
provides that the defendant is not entitled to
alter or modify or upgrade the RVSBKS “save for the use”.
The
defendant relies on the provisions of clause 4.7 of
the agreement.
[8]
The defendant further argues that the failure by the plaintiff to
annex to the particulars
copies of the invoices which were rejected
by the defendant and its failure to allege or contend that its price
was reasonable
or appropriate could not constitute a breach of the
agreement. The defendant contends that it is entitled to reject
the quotation
and could not attract liability as a consequence of
such rejection, especially where the defendant’s intention was
to modify
and upgrade the VSBK kilns which were not part of the
agreement. The alleged breach of the agreement is excipiable
because
it is not supported by material facts and does not find
support from the agreement.
[9]
Regarding the amount claimed, the defendant submits that the 30% of
the estimated
costs is unclear whether it is intended to be a
reference to the profit that the plaintiff would have made or the
mark-up which
the plaintiff was entitled to raise over and above the
cost of the project. Therefore, the computation of the damages
is
entirely unclear and not pleaded thus leading to the conclusion
that Rule 18 of the Uniform Rules has not been complied with.
In sum, the defendant, concludes that the plaintiff’s cause of
action has not been adequately or appropriately pleaded and
the
defendant is prejudiced thereby as it is unable to identify the cause
of the action or the basis upon which the plaintiff claims
the amount
set out in the particulars.
E.
The Particulars of Claims
:
[10]
The relevant particulars and the terms of the agreement pleaded by
the plaintiff and which are
excepted to: -, are the following:
“
7.3
The Plaintiff granted to the Defendant a personal, perpetual,
non-exclusive and non-transferable licence
to use the RVSBK’s
at its factory situate adjacent to the P[...] B[...] Road,
Humansdorp, the sole and exclusive purpose
of upgrading and ensuring
that the best practice is utilised in the design and construction of
the RVSBK’s at the Defendant’s
aforesaid factory to
ensure that it fires best quality bricks from time to time and at no
other premises and for no other purpose
unless the Plaintiff agrees
otherwise in writing.
7.4
Except for the licence granted by the Plaintiff to the Defendant in
terms of the agreement,
the Plaintiff grants no other licences with
respect to the RVSBK’s to the Defendant and there shall be
excluded from the
agreement any further licences, whether express or
implied, statutory other than as agreed to in or otherwise with
regard to the
RVSBK’s other than as agreed to in writing by the
Plaintiff.
7.6
The parties acknowledged that the confidential information is of
great importance to the
Plaintiff; is a valuable special and unique
asset; and that the Plaintiff may suffer irreparable harm or
substantial economic and
other loss in the event of such confidential
information being disclosed or used otherwise than in accordance with
the agreement.
7.7
The Defendant acknowledged that all confidential information
disclosed or which becomes
known to it pursuant to the provisions of
the agreement is proprietary to the Plaintiff and does not confer any
rights whatsoever
in such confidential information to give the
Defendant the right to use same save as set out in the agreement.
7.9
The Defendant agreed that monetary damages will not be a sufficient
remedy for breach of
the undertakings given in the agreement and,
without prejudice to any other rights and remedies available to the
Plaintiff, agreed
that the Plaintiff shall be entitled to relief by
way of an interdict, specific performance or otherwise.
8.
During December 2020 and at Langkloof Bricks Factory, P[...] B[...]
Road, Humansdorp
the said Blake acting on behalf of the Defendant,
met with the said Rowe, acting on behalf of Plaintiff, requesting a
design evaluation
and a quote from Plaintiff for the
upgrade of
six prior existing VSBK kilns (not defined or encompassed in the
agreement marked A”) at its said
premises in terms of
clause 4 of the said agreement.
9.
The Plaintiff furnished the Defendant with a design evaluation and
quotes on
4 December 2020; 3 March 2021; 24 March 2021 and 16 April
2021.
10.
The Defendant rejected the said quotations in writing on 16 April
2021. The letter
is attached as annexure “B”.
11.
On Monday 19 April 2021 the Defendant commenced
to refurbish and
modify the original VSBK kilns at its said premises making use of
Plaintiff’s confidential intellectual property
referred to in
“A”.
12.
In doing so, the Defendant breached the said agreement of the
parties.
13.
In the premises the Plaintiff has a clear right to the protection of
its confidential intellectual
property, the Defendant is using such
confidential intellectual property in the refurbishing and modifying
of six kilns at its
premises and the Plaintiff has no protection by
any other ordinary remedy.
14.
Alternatively, the Defendant has caused the Plaintiff to suffer
damages by breaching the
agreement by using its confidential
intellectual property for purposes for which it was not allowed in
the agreement, such damages
made up as follows”.
The estimated total cost
of the project
14.1
RVSBK building works
R1 050 000.00
14.2
RVSBK steel components
R
270 000.00
14.3
Fan Ind Exh System
R
240 000.00
14.4
Instrumentation and controls
R
180 000.00
14.5
Drawing / design costs
R
175 000.00
14.6
Project Management and training
R 163 625.00
R 2 078 625.00
14.7
The market value of the Plaintiff’s confidential intellectual
property amounting to 30% of the estimated
project costs, that is to
say R 623 587.50.
F.
The exception
:
[11]
The exception, as stated, is premised on the interpretation of the
provisions of the agreement.
It is prudent therefore to refer
to the exception as it is to avoid any confusion that might occur in
the process of paraphrasing
it. The exception reads:
“
1.
The Plaintiff relies upon a written agreement annexed as Annexure “A”
to
the Particulars of Claim. Clause 4.1 of that agreement
records that the granting of the “licence” in respect of
the so-called VSBK’s at the Defendant’s factory is for
the “sole and exclusive purpose of upgrading and ensuring
that
the best practice is utilised”.
2.
The prohibition against modification contained in Clause 4.3 of the
agreement
is however, expressly, subject to the “use thereof as
set out in clause 4.1 above.” i.e., “modification”
includes “upgrading”.
3.
Clause 4.7 of the agreement provides that any “assistance”
to the
Defendant shall be at “a consultancy fee as agreed to
between the parties.”
4.
Clause 13.1, which provides for “breach” concerns
“unauthorised
disclosure or publication or use of the
confidential information”.
5.
Paragraph 8 of the Particulars of Claim refers to a “request”
for
a “design evaluation and quotations from the Plaintiff for
the upgrade of six prior existing VSBK kilns at its said premises
in
terms of Clause 4 of the said agreement.”
6.
Paragraph 9 of the Particulars of Claim refers to the furnishing of a
“design
evaluation and quotes” on four separate
occasions. Notwithstanding such “quotes” being in
writing no such
documents are annexed to the Particulars of Claim.
7.
Sub-paragraph 10 of the Particulars of Claims refers to the
“rejection”
of the said quotation or quotations.
The document annexed as Annexure “B” rejects the “quote”,
ex facie
the email, on the basis of an excessive price.
The Plaintiff does not allege or contend that its price was
reasonable or
appropriate, and the rejection of an excessive price
cannot constitute a breach of Annexure “A”.
8.
Prima facie
therefore, the Defendant was entitled to reject
the “quote” and the Defendant could not attract liability
as a consequence
of such rejection.
9.
The alleged breach in paragraph 12 of the Particulars of Claim is
accordingly
not supported by any material facts.
10.
In paragraph 13 of the Particulars of Claim it is alleged that the
Defendant is utilising
“confidential intellectual property in
the refurbishment and modifying of six kilns at its premises”.
The refurbishing
and modification of existing kilns cannot, on a
proper construction of Annexure “A” constitute a breach
of that agreement.
11.
Paragraph 14.7 of the amended Particulars of Claim refers to the
“
market value of the Plaintiff’s confidential
intellectual property amounting of 30% of the estimated project
cost.
” It is unclear whether this is intended to be a
reference to the profit which the Plaintiff would have made, or the
mark-up which the Plaintiff was entitled to raise over and above the
cost of the project”.
[12]
The defendant places reliance for such contention on the provisions
of the agreement particularly
clauses 4 and 3.1. It is
essential for me to deal with the provisions of clause 4 as they
appear in the agreement for the
simple reason that both parties rely
on such provisions for the contention that the summons is either
excepiable or not.
Clause 4 reads:
“
Grant of Use
Licence”
“
4.1
Rowe hereby grants to Langkloof Bricks a personal, perpetual,
non-exclusive and non-transferrable licence
to use the RVSBK’s
at its factory situated adjacent to the P[...] B[...] Road,
Humansdorp for the sole and exclusive purpose
of upgrading and
ensuring that the best practice is utilised in respect of the design
and construction of the RVSBK’s at
Langkloof Bricks’
aforesaid factory to ensure that it fires best quality bricks from
time to time and
at no other premises and for no other purpose
unless Rowe agrees otherwise in writing
.
4.2
Except for the licence granted by Rowe to Langkloof Bricks in terms
of this Agreement, Rowe
grants no other licences with respect to the
RVSBK’s to Langkloof Bricks and there shall be excluded from
this agreement
any further licences, whether express or implied
statutory or otherwise with regard to the RVSBK’s other than as
agreed to
in writing by Rowe.
4.3
Langkloof Bricks shall not alter or in any way modify the RVSBK’s
or any documentation
relating thereto in any manner whatsoever, save
for the use thereof as set out in clause 4.1.
4.7
Should Langkloof Bricks require any assistance from Rowe in respect
of the implementation
or in respect of any other aspects relating to
any modification, enhancement, addition, variation and/or amendment
in respect of
the RVSBK’s made available by Rowe to Langkloof
Bricks in terms of this agreement. Rowe shall be under no
obligation
to provide such assistance
to Langkloof Bricks in
terms of this agreement and in the event of it rendering any such
assistance to Langkloof Bricks it shall
be at a consultancy fee as
agreed to between the parties”. (Emphasis added).
G.
Analysis
:
[13]
Grounds of exception are rooted in Rule 23(1) of the Uniform Rules of
Court
[2]
. An exception
that a pleading is vague and embarrassing strikes at the formulation
of the cause of action and not its legal
validity
[3]
.
In
Trope
v South African Reserve Bank
[4]
McCreath J considered the scope of and meaning of the basis for an
exception on the ground that a pleading is vague and embarrassing
as
follows:
“
An exception to a
pleading on the ground that it is vague and embarrassing involves a
two-fold consideration. The first is
whether the pleading lacks
particularity to the extent that it is vague. The second is
whether the vagueness causes embarrassment
of such a nature that the
excipient is prejudiced (
Quinlan v MacGregor
1960 (4) SA 383
(D) at 393E-H). As to whether there is prejudice, the ability
of the excipient to produce an exception-proof plea is not
the only,
nor indeed the most important, test – see the remarks of
Conradie J in
Levitan v Newhaven Holiday Enterprises CC
1991
(2) SA 297
(C) at 298G-H. If that were the only test, the
object of pleadings to enable parties to come to trial prepared to
meet each
other’s case and not be taken by surprise may well be
defeated.
Thus, it may be possible
to plead to particulars of claim which can be read in any one of a
number of ways by simply denying the
allegation made; likewise to a
pleading which leaves one guessing as to its actual meaning.
Yet there can be no doubt that
such a pleading is excipiable as being
vague and embarrassing – see
Parow Lands (Pty) Ltd v
Schneider
1952 (1) SA 150
(SWA) at 152F-G and the authorities
there cited.
It follows that averments
in the pleading which are contradictory and which are not pleaded in
the alternative are patently vague
and embarrassing; one can but be
left guessing as to the actual meaning (if any) conveyed by the
pleadings”.
[14]
This dictum has been approved in a number of decisions. As a
corollary to the above, in
Jowell
v Bramwell-Jones
and
Others
[5]
Heher J said:
“
It is therefore
incumbent upon a plaintiff only to 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”.
[15]
In the present matter, the plaintiff pleads that pursuant to the
installation of its construction
of the 18 RVSBK kilns they entered
into an agreement that defined their relationship going forward about
the protection of its
confidential and intellectual property rights
and written use licence, the terms and condition of which are set out
in the agreement.
The plaintiff further pleads that after it
had issued quotations for the upgrade of the six VSBK kilns, not
defined or encompassed
in the agreement, the defendant, in
contravention of the agreement, used the plaintiff’s design
evaluations to refurbish
and modify the VSBK kilns making use of its
confidential intellectual property protected by the agreement
[6]
.
To me, there is nothing that is vague and embarrassing in the
particulars. All the plaintiff avers is that the agreement
covers the protection of his confidential and intellectual property
and not necessarily the 18 RVSBK kilns. These facts are
sufficient for the defendant to plead. It shall remain for the
plaintiff to establish the facts pleaded during trial and
for the
court to decide.
[16]
The words of Corbett JA in
Dettmann
vs Goldfain and Another
[7]
ring true in this matter when he said:
“
It is true that,
generally speaking, the Court is reluctant to decide upon exception
questions concerning the interpretation of
a contract where the whole
contract is not before the Court or where it appears from the
contract itself or from the pleadings
that there may be admissible
evidence which, if placed before the Court, could influence the
Court’s decision as to the meaning
of the contract (See
Delmas
Milling Co. Ltd. v Du Plessis,
1955 (3) S.A. 447
(A.D.) at p.
455;
Davenport Corner Tea Room (Pty.) Ltd. v Joubert
,
1962 (2)
S.A. 709
(D)). In the latter case Miller J., emphasised (at p.
716) that before the possibility of evidence of surrounding
circumstances
influencing the Court’s decision should be
allowed to debar the Court from deciding the issue on exception that
possibility
should be something more 1than notional or remote one”.
(Footnotes omitted)
[17]
Clause 4.1 grants a use licence to the defendant, for its “sole
and exclusive purpose of
upgrading and ensuring that the best
practice is utilised in respect of the design and construction of the
RVSBK’s at Langkloof
Bricks aforesaid factory . . . and at no
other premises and
for no other purpose unless Rowe agrees
otherwise in writing
”. Clause 4.2 prescribes that the
use of the licence shall be in respect of the RSVBK only and states
“there shall
be excluded from this agreement any further
licenses, whether express or implied.
[18]
The reading of clause 4, as a whole and in particular clause 4.1, is
not only capable of being
interpreted to mean that the use of the
licence granted to the defendant is for its “personal
perpetual, non-exclusive and
non-transferable licence” to use
it in RVSBK, solely and exclusively for purposes of upgrading and
ensuring that it is used
to design and construct the aforesaid RVSBK
kilns and no other kilns (like the VSBK in this instance) and for no
other purpose
unless with the written consent of the plaintiff.
The plaintiff in paragraph 11 pleaded that the defendant on 19 April
2021
commenced to refurnish and modify
the VSBK kilns making use
of its confidential
intellectual property contrary
to the
licence given to it which only allowed such use to the existing 18
RVSBK kilns. Such use, it stands to reason, was
pursuant to the
quotations furnished which included the
confidential intellectual
property
covered by clause 4 of the agreement. The
interpretation preferred by the plaintiff is not farfetched.
Clause 4 may
also be interpreted to cover the confidential
intellectual property relied upon by the plaintiff. It remains
for the plaintiff
to prove or establish such. I am not in the
least making a finding regarding the interpretation of the
agreement. All
I am saying is that such an interpretation may
not be excluded. That accords with the
dictum
expressed
by Corbett JA in
Dettmann, supra.
[19]
Clause 13.1 provides for a “breach” which concerns
“unauthorised disclosure
or publication or use of the
confidential information”.
[8]
The particulars allege that the defendant has made use of
confidential information provided to it by the plaintiff and in that
regard breached the agreement. Once that is established then
the provisions of clause 13.2 are triggered and find application.
The plaintiff would therefore be entitled to a “relief by way
of an interdict, specific performance or otherwise”.
For
these reasons, the application for an exception in this regard stands
to be dismissed.
[20]
The defendant attacks the monetary claim on the basis that it is
unclear how it is arrived at
and no facts are pleaded thereof thus
falling fowl of compliance with Rule 18 of the Uniform Rules of
Court. The defendant
is therefore prejudiced by the manner in
which the amount has been pleaded
[21]
In
Stafford
v Special Investigating Unit
[9]
Leach J, as he then was, said the following about Rule 18:
“
This is also
recognised by Rule 18(4) of the Uniform Rules of Court which requires
a pleading to contain “a clear and concise
statement of the
material facts upon which the pleader relies for his claim . . . with
sufficient particularity to enable the opposite
party to reply
thereto”. Moreover, Rule 18(10) requires a plaintiff
suing for damages to set the amount in such a manner
as will enable
the defendant reasonably to assess the
quantum
thereof”.
[22]
To me, the plaintiff has plead with sufficient particularity how the
amount is arrived at.
The plaintiff differentiates between the
market value of its confidential intellectual property costs as 30%
of the estimated project
costs. The estimated project costs are
R2 078 625.00, and the damages are 30% thereof which amounts to
R623 587.00.
I do not agree with the defendant therefore
that in the manner pleaded, the damages are inadequate or
inappropriately pleaded so
as to be vague and embarrassing or lack
the necessary averments to sustain the cause of action.
[23]
In the result, I make the following order.
The exception is
dismissed with costs.
M
MAKAULA
Judge
of the High Court
Appearances:
Counsel
for
Excipient:
Adv RG Buchanan SC
Instructed
by:
Le Roux Attorneys
Gqeberha
Counsel
for the Respondent:
Adv HJ van der Linde SC
Instructed
by:
Goldberg & De Villiers Inc
Gqeberha
Date
heard:
3 November 2022
Date
delivered:
03 March 2023
[1]
“
RVSBK’s”
means
the Recirculating Vertical Shaft Brick Kilns design developed by
Rowe, including all methodologies, formulae, trade secrets,
drawings, technical date and specifications, implementation methods
and the like relating thereto developed, designed and implemented
by
Rowe.
[2]
Rule
23 (1) Provides: “Where any pleading is vague and
embarrassing, or lacks averments which are necessary
to sustain an
action or defence, as the case may be, the opposing party may,
within the period allowed for filing any subsequent
pleading,
deliver an exception thereto and may set it down for hearing in
terms of paragraph
(f)
of subrule
(5)
rule (6): Provided that where a party intends to take an exception
that a pleading is vague and embarrassing he shall within
the period
allowed as aforesaid by notice afford his opponent an opportunity of
removing the cause of complaint within 15 days:
Provided further
that the party excepting shall within ten days from the date on
which a reply to such notice is received or
from the date on which
such reply is due, deliver his exception”.
[3]
Trope
v South African Reserve Bank
[1993] ZASCA 54
;
1993
(3) SA 264
(A) at 269 I.
[4]
1992
(3) SA 208
(TPD) at 211 B-D.
[5]
1998
(4) SA 836
at 902H.
[6]
Paragraph 11 of the amended particulars of claim.
[7]
1975 (3) SA 385
(A) at 400 A-B.
[8]
Clause 13 provides as follows:
13.1
Langkloof Bricks agrees that the unauthorised disclosure or
publication or use of the Confidential
Information may cause
irreparable loss, harm and damage to Rowe. Accordingly,
Langkloof Bricks indemnifies and hold Rowe
harmless against any
loss, claim, harm or damage, of whatever nature, suffered or
sustained by Rowe pursuant to a breach by Langkloof
Bricks or any of
its related parties of the provisions of this Agreement.
13.2
Langkloof Bricks agrees that monetary damages will not be a
sufficient remedy for such breach
of the undertakings given in this
agreement and accordingly, without prejudice to any other rights and
remedies available to
Rowe, agrees that Rowe shall be entitled to
relief by way of interdict, specific performance or otherwise.
13.3
Langkloof Bricks agrees to pay Rowe’s costs of enforcing its
rights under this agreement,
including its costs on the attorney and
own client scale, costs of counsel on brief and tracing agent’s
fees.
[9]
1999 (2) SA 130
at 138 A-B.