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[2023] ZAFSHC 6
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Sutherland Transport (PTY) Ltd v Dirk Lotter Vervoer (PTY) Ltd (922/2022) [2023] ZAFSHC 6 (19 January 2023)
IN THE HIGH COURT OF
SOUTH AFRICA
FREE STATE DIVISION,
BLOEMFONTEIN
CASE NO. 922/2022
In the matter between
SUTHERLAND TRANSPORT
(PTY) LTD
APPLICANT
versus
DIRK LOTTER VERVOER
(PTY) LTD
RESPONDENT
JUDGMENT
CORAM:
NAIDOO J
HEARD ON:
17 JUNE 2022
DELIVERED
ON:
19 JANUARY 2023
[1]
This started out as an application brought by the Applicant,
Sutherland Transport, for
the liquidation of the respondent, Dirk
Lotter Vervoer (Pty) Ltd, and a claim in the alternative for a money
judgment in the amount
of One Million Five Hundred and Forty Two
Thousand Seven Hundred Seventy Six Rand and Seventy Five Cents
(R1 542 776.75).
Shortly after the application was served
on the respondent, the latter paid to the applicant an amount of One
Million Two Hundred
and Eighty Eight Thousand Three Hundred and
Thirty Rand (R1 288 330.00), which was not accompanied by a
tender for the payment
of any interest or the costs of the applicant.
I will deal more fully with this later. Adv S Tsangarakis represented
the applicant
in this court and Adv P Zietsman SC, represented the
respondent.
[2]
It is common cause that the applicant and respondent conduct business
in the transport
industry, providing carriage services in respect of
various goods. In this matter, the respondent engaged the applicant
as a subcontractor
for provision of carriage services, where the
respondent was the main contractor. The applicant alleges that the
respondent failed
to make payment in respect of several invoices
since October 2021, and made only part payment in respect of some
invoices. Payment
was demanded from the respondent as well as the
surety, Coenraad Josephus Taljaard, but neither made payment. The
appellant moved
the hybrid application I referred to earlier. The
application was issued on 2 March 2022 and served on the respondent
on 4 March
2022. As indicated earlier, the respondent paid to the
applicant, on 7 March 2022, an amount of One Million Two Hundred and
Eighty
Eight Thousand Three Hundred and Thirty Rand
(R1 288 330.00),
which by my calculation was R254 446.95 less than the claimed
amount of R1 542 776.75.
[3]
Between 9 and 11 March 2022, it seems there were numerous discussions
and a slew of
correspondence between the parties, culminating in two
such letters being referred to by the parties, and which are central
to
the current application. On 9 March 2022, the respondent’s
attorney wrote a response to an earlier email of the same date,
sent
by the applicant’s attorney. I mention that not all the
correspondence was attached to the papers, including the letter
of 9
March 2022, sent by the applicant’s attorneys to the
respondent’s attorneys. In the letter dated 9 March 2022,
the
respondent expressed disagreement with certain items on some of the
invoices. It is not necessary for present purposes to deal
in any
detail with all these issues, save to say that, based on the contents
of the correspondence by the applicant’s attorneys,
the
respondent identified three issues in dispute, namely:
3.1
Standing charges
3.2
Interest
3.3
Costs.
[4]
The respondent was of the view that the standing charges related to
an invoice dated
1 November 2021. The respondent disputed that the
applicant was entitled to those charges and consequently could not
claim interest
on the standing charges until the dispute was
resolved.
With
regard to costs, the respondent averred that all invoices issued by
the applicant were paid timeously, so there were no overdue
amounts
owing to the applicant. Therefore, the issue of the hybrid
application was premature, as a result of which the respondent
refused to pay any of the applicant’s costs.
[5]
The applicant’s response to the aforementioned letter by the
respondent’s
attorney was sent on 11 March 2022. The most
important part of that letter was the last paragraph which read:
“
It
is our instructions to institute an action for payment in the amount
of R255 006.75, as well as the interest and that the
costs of
the present application, on the scale set out in the notice of
motion, should be argued”
The respondent argues
that this paragraph, properly interpreted, indicates that the action
foreshadowed by the applicant would include
the interest it claims
and that only the costs of the hybrid application were to be argued
in this current application. The applicant
strenuously denied this,
arguing that the respondent’s interpretation of the relevant
paragraph was wrong, and it was entitled
to interest on the amount
paid by the respondent, as interest and costs were claimed in the
Notice of Motion. As indicated, payment
was made after the
application was served on the respondent and before the hearing of
the matter.
[6]
The respondent indicates that the disputed amount of R255 006.75
is in respect
of “standing charges”, on which interest is
not recoverable. The respondent does not deal at all with the reason
for
its payment of R1 288 330.00, but baldly denies, in its
Opposing Affidavit, that it is indebted to the applicant. The
respondent further asserts that it complied with all statements
issued by the applicant and made all payments timeously. It further
fails to deal meaningfully with the applicant’s assertion in
Founding that the respondent’s breach initially occurred
in
October 2021. The applicant sets out in paragraphs 34 to 43, how the
amount of the respondent’s indebtedness to it arose
and
attached the relevant documentation to support its allegations.
[7]
It is not in dispute that the written agreement between the parties
specifically stipulates
that payment of amounts due to the applicant
must be made to the applicant thirty days after the date of the
statement and must
be received by the 25
th
of each month.
The amounts due to the applicant for October 2021, as set out in the
Founding Affidavit , as well as payments for
November 2021, December
2021 and January 2022 were not paid as they fell due. The respondent
paid a partial amount on 17 January
2022, which was applied to the
outstanding amounts for October 2021 and partially for November 2021.
The applicant argues that
the respondent had breached the agreement
entered into between the parties, causing the applicant to demand
from the respondent
the full amount due to it by the respondent,
which became immediately due and payable upon breach of the
agreement.
[8]
In spite of the payment provisions of the agreement, which I have
mentioned above,
the respondent appears not to have complied with the
stipulated thirty- day period, but alleged in the Opposing Affidavit
that
there was an arrangement between it and the applicant that all
invoices issued by the applicant up to the 25
th
of the
month will be reconciled at the end of that month and despatched to
the respondent. The latter would then have one month
and seven days
to pay. The respondent alleges that it in fact did so. The applicant
clearly disputes this, alleging that as far
as it is concerned, its
business relationship with the respondent was regulated by the
written contract entered into between them.
I note that the
respondent has not attached any documentation, evidencing the
arrangement it alleges to have been in place between
it and the
applicant, and its compliance with such arrangement. It is also
evident that the payments for October were not made
as required. The
payment made in January 2022 was applied to the respondent’s
debts in accordance with the age of the debt,
the oldest debts being
credited first. Therefore, payments for October were very much out of
time, even on the respondent’s
version.
[9]
I mention that after the applicant’s Replying Affidavit was
filed, the respondent
filed an application to strike out certain
portions of the affidavit, on the basis that it was irrelevant and
constitutes inadmissible
evidence based on similar facts and also
constitute new facts put up in reply. I will deal further with this
aspect later.
[10]
After the respondent made payment of a portion of the amount claimed
in the money judgment, the
applicant asserts that it no longer had
locus standi
to proceed with the application for liquidation
and informed the respondent accordingly as early as March 2022. The
applicant asserted
that it would not liquidate the respondent for
just over R22 000.00 in respect of interest, as that would be
malicious. With
regard to monetary judgment, the applicant advised
the respondent that it would proceed by way of action to recover the
amount
disputed by the respondent, namely R255 006.75. I pause
to note that the dispute raised by the respondent was done after this
application was launched and after payment by it of the amount of
R1 288 330.00. This latter amount represents 83,5%
of the
amount originally claimed. According to the written agreement between
the parties, under the heading “Conditions of
Credit”,
paragraph
h
provides as follows:
“
It
is specifically agreed and recorded that all amounts reflected on
monthly statements issued by “Sutherland Transport”
will
be deemed to be correct in every respect, unless objected to in
specific detail and in writing within 7 (seven) working days
from
date of issuing of the said statement and that the indebtedness of
the “Applicant” to “Sutherland Transport”
shall at any time be determined and proved by the contents of such
statement, which shall be binding on the “Applicant”
and
be conclusive proof of the amount of the indebtedness of the
“Applicant” to “Sutherland Transport”
and
will be valid as a liquid document against the “Applicant”
in any competent Court”.
[11]
The respondent has not provided any proof that it complied with the
abovementioned provision,
other than to make a bald statement that it
complied timeously. The applicant in fact raised the point that the
respondent did
not do so, only raising the dispute after the service
of this application upon it. The respondent’s response to the
application
was to pay 83.5% of the amount claimed within two days of
service of the application, from which it can be inferred that it
acknowledged
its indebtedness to the applicant, at the time this
application was launched, in the amount paid. The respondent did not
tender
the costs of application as is the practice. Furthermore, if
the respondent had made timeous payments, rendering the application
premature, as it alleged in the Answering Affidavit, it begs the
question why it chose to pay 83.5% of the amount claimed, instead
of
opposing the application.
[12]
In the Notice of Motion, the applicant claimed interest on the amount
claimed, and costs on an
attorney and client scale (as provided for
in the written agreement between the parties). The respondent’s
argument in this
regard is that the applicant clearly foresaw that it
would be unsuccessful in obtaining a liquidation order or a money
judgment
against it by way of application, and therefore decided not
to proceed with the liquidation application and to proceed by way of
action for the recovery of the disputed amount. This is an
obfuscation of the true position, which continues in the respondent’s
argument that if a party no longer wishes to proceed with a matter,
he must withdraw it and tender the costs of the other party.
The
applicant, so the respondent argues, wants to withdraw the
application but does not want to pay the respondent’s costs,
and this is the reason it opposed this application.
[13]
The respondent chose to pay a very substantial portion of the amount
claimed in the alternative
claim, making it unnecessary for the
applicant to proceed with the liquidation application, it offered no
reason why it paid the
amount it did and disputed a very small
portion of the original claim, after the launch of the application. I
should perhaps mention,
without dealing at length with this point,
that in my view, the applicant did show, on a balance of
probabilities, that the applicant
committed an act or acts of
insolvency by failing to pay monies due to the applicant after demand
was made for such amounts to
be paid. In my view, this would justify
an inference that the respondent was unable to pay its day-to-day
debts The applicant would
have, in all probability, succeeded in
obtaining a provisional liquidation order against the respondent, had
the latter not paid
the amount mentioned earlier. It is remarkable
that the respondent now embarks on the argument that the applicant
should withdraw
the application and pay the respondent’s costs.
Such an argument lacks merit and cannot be sustained. The argument
that the
applicant chose not to proceed because it foresaw that it
could not succeed on either the liquidation claim or the money
judgment
is equally without merit and cannot be sustained. The
respondent’s actions have only served to escalate the costs in
this
matter by opposing the application for interests and costs.
[13]
As I mentioned earlier, the applicant gave notice to the respondent
by way of its letter dated
11 March 2022 that it would proceed by way
of action to recover the disputed amount of R255 006.75 together
with interest,
and that the costs of this application would be
argued. It appears that in the numerous interactions between the from
9 to 11 March
2022, they were unable to agree on the issue of costs,
hence the intention to argue that aspect. The respondent also took
issue
with the payment of interest on the amount of R1 288 330.00.
Both parties advanced argument in this respect, with the
respondent
arguing that the applicant “belatedly” claims interest,
in Reply. This argument is also without merit as
the interest was
claimed from the outset, albeit on a different amount. If a
respondent pays a large part of the claim, then, in
my view, he
acknowledges his indebtedness in that amount and as a matter of
common sense, will be liable for interest (which is
claimed) on the
amount he acknowledges that he owes the applicant. The respondent’s
recalcitrance and intransigent attitude
in this respect is
unfortunate, and militates against the court coming to its
assistance.
[14]
With regard to costs, it is trite that the award of costs is in the
discretion of the court.
In exercising its discretion, it takes into
account all relevant factors and makes an award based on fairness and
equity. As a
matter of general practice the rule is that a party who
is successful or substantially successful will be entitled to his
costs.
Substantial success does not mean he has to win the whole case
but obtains materially what he seeks. This has been established in
a
long line of cases for well over 60 years. [See
Herold
v Taxing Master 1958(1) SA 812 (A)
,
which was cited with approval in
Llama
Restaurant Franchising Co (Pty) Ltd v Ivano (Pty) Ltd
1990 (1) SA 474
(C)
;
Norwich
Union Fire Insurance Society Ltd v Tutt
1960 (4) SA 851
1960 (4) SA p854
D
(A) and
Jacobs
v Chairman, Governing Body, Rhodes High School, and Others
2011 (1)
SA 160
(WCC)].
[15]
In considering whether the applicant was substantially successful in
the application, this court
takes cognizance of the well-established
guidelines set out in our case law. In summary, a court must consider
whether it was necessary
for the applicant to resort to litigation in
order to obtain relief, and the measure of the applicant’s
success and failure.
The history of the matter as appears from the
papers indicates that the applicant made numerous efforts to recover
the monies owed
to it. The correspondence indicates that the sole
director of the respondent, Mr Dirk Lotter, acknowledged that the
monies were
due to the applicant and made several promises to pay,
but failed to do so. The applicant was clearly obliged to seek the
assistance
of the court for relief. It is the service of the
application upon the respondent that resulted in the payment it made.
In my view,
the payment of 83.5 % of the applicant’s claim,
while the disputed amount represents 16.5%, indicates that the
applicant
was substantially successful in the matter. There is no
reason to depart from the general rule that costs follow the result.
[16]
I turn now to deal with the respondent’s application to strike
out portions of the applicant’s
Replying Affidavit and certain
annexures thereto. Such portions deal with an application by the
respondent’s erstwhile accountants
for the liquidation of the
respondent, arising out of the latter’s failure to pay the fees
due to its accountant. That liquidation
application was issued after
the current application was launched by the applicant (2 March 2022)
and appears to have been issued
on the same day that the respondent
filed its Answering Affidavit in this matter (30 March 2022). The
applicant could not have
referred to it in Founding as it had not
come into existence on 2 March 2022.
One
of the grounds for the striking out relied upon by t
he
respondent is that this amounts to similar fact evidence, which is
impermissible.
[17]
The striking out application was issued on 17 May 2022, more than two
months after the respondent
had paid the R1 288 330.00. The
respondent was, by the time it issued the striking out application,
well aware that such
payment resulted in the applicant requiring only
payment of the interest on R1 288 330.00 and the costs of
this application.
The respondent was aware that the applicant would
not be pursuing the liquidation application and that it would proceed
to recover
the disputed amount by way of action proceedings.
Therefore the striking out application would serve no purpose and
would be of
academic interest only, should the respondent succeed in
such application. The respondent appears to have missed the point of
the
applicant’s reference to the liquidation application by the
respondent’s accountants, or chose to ignore it.
[18]
The respondent in its Answering Affidavit went to great lengths to
explain that the respondent
is a financially healthy company with
assets that far exceed its liabilities, that the applicant was aware
of this but nonetheless
pursued an application for liquidation
against it. The respondent denied that it was either factually or
commercially insolvent,
or that it was indebted to the applicant. The
applicant was entitled to deal with these allegations in Reply, which
it did. It
was only at that stage that it was able to refer to the
accountants’ liquidation application to refute the respondent’s
allegation that it was a financially healthy company. Even a cursory
reading of the Replying Affidavit, giving the contents their
ordinary
grammatical meaning, would yield the result that the applicant was
replying to allegations made by the respondent and
to fortify the
case that it made in Founding. While it may be regarded as new
material, such liquidation application was not in
existence at the
time this application was launched and could not have been referred
to by the applicant in Founding. One of the
purposes of referring to
such liquidation application was simply to
refute
the respondent’s allegations that it was financially healthy
and that the applicant was not entitled to bring an application
for
the liquidation of the respondent.
[19]
In my view, it would serve little purpose to determine the striking
out application as it does
not bear on the issues that this court was
called on to adjudicate. Courts are discouraged from giving orders
which have academic
value only and are slow to come to the assistance
of litigants who raise technical defences, where such defences impact
negatively
on issues of fairness and the interests of justice. It is
also my view that striking out application falls into this category
and
was unnecessary. It served merely to escalate the costs in this
matter. Both the applicant and respondent sought costs on an attorney
and client scale. As I indicated earlier, the written agreement
between the parties provided for the payment of costs on that scale.
It is also in the court’s discretion to grant costs on the
attorney and client scale when it wishes to express its displeasure
at the manner in which a party has conducted the litigation before
it. This is one such case, where the respondent proceeded in
a manner
that has caused the applicant to incur unnecessary costs. The
respondent has chosen to misinterpret or place an interpretation
on
the assertions of the applicant both in the papers and annexures
thereto, which are disingenuous and opportunistic. The costs
in this
matter could have been curtailed in March 2022, when the parties were
attempting to settle the matter, but the respondent
failed or refused
to do so, thus forcing the applicant to seek the assistance of the
court for relief.
[20]
In the circumstances the following orders are made:
20.1 The
respondent’s application to strike out is dismissed with costs
on the attorney and client scale;
20.2 The respondent
is ordered to pay interest in the amount of R22 336.59 (Twenty
Two Thousand Three Hundred and Thirty
Six Rand and Fifty Nine Cents);
20.3 The respondent
is ordered to pay the costs of the application, on an attorney and
client scale.
S NAIDOO J
On behalf of the
Applicants:
Adv S Tsangarakis
Instructed
by:
Honey Attorneys
1
st
Floor
Honey Chambers
Northridge Mall
Kenneth Kaunda Road
Bloemfontein
(Ref: A
Prinsloo/fk/133404)
On behalf of the
Respondent:
Adv P Zietsman SC
Instructed
by:
McIntyre Van Der Post
12 Barnes Street
Westdene
Bloemfontein
(Ref:BAD001/AD
Venter/ljb)