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2023
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[2023] ZAFSHC 217
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C Squared Consumer Connectedness (Pty) Ltd v HOD: Department of Sports, Arts, Culture and Recreation: Free State Provincial Government and Another (1670/2023) [2023] ZAFSHC 217 (31 May 2023)
IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
Case
No.: 1670/2023
Reportable:
YES/NO
Of
Interest to other Judges: YES/NO
Circulate
to Magistrates: YES/NO
In
the matter between:
C
SQUARED CONSUMER CONNECTEDNESS (PTY) LTD
Applicant
and
THE
HOD: DEPARTMENT OF SPORTS, ARTS,
1st Respondent
CULTURE
AND RECREATION: FREE STATE
PROVINCIAL
GOVERNMENT
THE
MEC: DEPARTMENT OF SPORTS, ARTS,
2nd Respondent
CULTURE
AND RECREATION: FREE STATE
PROVINCIAL
GOVERNMENT
CORAM:
VAN RHYN, J
HEARD
ON:
18 MAY 2023
DELIVERED
ON: 31 MAY 2023
[1]
The plaintiff, C Squared Consumer Connectedness (Pty) Ltd, issued a
Provisional Sentence
Summons against the first and second defendants
(the HOD and the MEC for the Department of Sports, Arts, Culture and
Recreation
of the Free State Provincial Government, respectively) for
payment of the amount of R3 344 335.84 which it alleges is owed to it
in terms of a payment remittance advice electronically issued by the
defendants' duly authorized representative being the Accounting
Officer on 17 November 2022. A copy of the remittance advice is
appended to the provisional sentence summons marked "Annexure
A"
[2]
The defendants entered an appearance to defend and filed an
affidavit, proffering
the defence that the remittance advice was
erroneously issued by the defendants to the plaintiff. The background
facts relevant
to the defence are as follows: The plaintiff was
awarded a tender on 25 August 2022 to provide event management
services at the
Macufe Festival to be held at Bloemfontein from 25
September 2022 until 9 October 2022.
[3]
Subsequent to the commencement of the Macufe Festival, on 3 October
2022 DS Consortium,
a joint venture consisting of Dots Design Group
(Pty) Ltd and SANAQUA Event and Promotion CC, launched an urgent
application seeking
the review of the tender awarded to the plaintiff
on the basis that the awarding of the tender to the plaintiff was
tainted by
administrative irregularities in that it deviated from the
tender specifications.
[4]
The urgent application was opposed by the plaintiff and the second
defendant. Their
opposition was unsuccessful and on 3 October 2023
Loubser J held that the decision by the Department of Sports, Arts,
Culture and
Recreation: Free State Government, to award the tender to
the plaintiff, was as a result of a tender process that was not fair,
equitable and competitive. As a result, the tender was reviewed and
declared unlawful. The service level agreement concluded between
the
first and second defendants and the Plaintiff relating to the
impugned decision was struck down in accordance with the provisions
of Section B of the Promotion of Administrative Justice Act
[1]
.
[5]
Due to the fact that the Macufe Festival had by then already
commenced and was in
full swing, Loubser J, found that it would not
be in the public interest to cause the festival to end. The effect of
the order
granted by Loubser J was that the plaintiff proceeded to
render services during the Macufe Festival until its completion. No
ruling
was made relating to payment to the plaintiff for the services
it continued to render despite the order that the service level
agreement was struck down.
[6]
Subsequent to the granting of the order by Loubser J, the plaintiff
and the respondents
launched an application for leave to appeal which
application was refused. Leave to appeal was then sought from the
Supreme Court
of Appeal. This application is pending.
[7]
The defendants contend that prior to launching the application for
leave to appeal,
the remittance advice was erroneously issued to the
plaintiff for payment. In their affidavit in terms of the provisions
of Rule
8(5) of the Uniform Rules of Court, the respondents contend
that even though they are of the view that the plaintiff is entitled
to compensation for the services rendered during the Macufe Festival,
payment cannot be effected due to the fact that the service
level
agreement has been declared unlawful. Therefore, pending finalization
of the appeal, alternatively an order granted by this
court, the
respondents' hands are tied and as a result the promise to pay in the
form of the remittance advice was cancelled.
[8]
The primary element of provisional sentence is that it is only
available to a plaintiff
who is armed with a liquid document.
[2]
The procedure for obtaining this form of remedy in the High Court is
governed by Rule 8 of the Uniform Rules of Court. The issue
whether a
particular document can be described as "liquid" for
purposes of provisional sentence has given rise to much
debate in
litigation. A document is liquid if upon a proper construction
thereof, evidences by its terms and without resort to
evidence
extrinsic thereto, is an unconditional acknowledgment of indebtedness
in an ascertained amount of money, the payment of
which is due to the
creditor.
[3]
[9]
The justification traditionally advanced for the institution of
provisional sentence
is that a liquid document gives rise to a
rebuttable presumption of indebtedness. The plaintiff must therefore
allege in his or
her summons that the document (a copy of which is
required by Rule 8(3) to be annexed to the summons) is genuine and
that, on the
face of the document, the amount claimed is owing. If
the defendant disputes these allegations, the onus is on the
plaintiff to
prove that they are true. That includes, for example,
the authenticity of the defendant's signature, the authority of the
defendant's
agent, or the fulfilment of a "simple condition".
[4]
[10]
The respondents do not dispute the issuing of the remittance advice
nor the liquidity thereof. The plaintiff rendered goods
and services
on the instance and request by the respondents towards continuation
of the Macufe Festival subsequent to the court
order on 3 October
2023. The respondents undertook and promised to pay the plaintiff and
issued the remittance advice in terms
whereof payment was due on 22
November 2022. I agree with the submission on behalf of the plaintiff
that the "promise to pay",
in the form of the remittance
advice, was not issued on condition that the plaintiff would have to
wait the outcome of the pending
appeal.
[11]
Provisional sentence is a summary and interlocutory remedy designed
to enable a creditor who
has liquid proof of his claim to obtain a
speedy judgment. Provisional sentence precludes a defendant with no
valid defence from
'playing for time'. Apart from the fact that
provisional sentence is only available to a plaintiff who is armed
with a liquid document,
two further inherent characteristics of
provisional sentence have always rendered it distinguishable from
other remedies. The one
is that it only leads to a provisional or
interlocutory order. Final judgment is still to be considered in the
principal case.
In the final instance, the claim against the
defendant can still be dismissed. The other is that, while on the one
hand it entitles
the plaintiff to payment of the judgment
immediately, that is, before entering into the principal case, on the
other hand it affords
the defendant to insist on security for
repayment pending the final outcome.
[12]
While the plaintiff must, at the provisional stage, discharge its
onus on a preponderance of
probabilities
[5]
the defendant need only satisfy the court that, having regard to the
incidence of onus in the principal case, the probabilities
of success
in the principal case are against the plaintiff.
[6]
I am of the view that the plaintiff has established, on a balance of
probabilities, that the defendants have unconditionally acknowledged
liability for the amount claimed. The Defendants failed to produce
sufficient proof of its defence to satisfy the court that the
probability of success in the principal case is against the
plaintiff.
[13]
On a clear and purposive reading of the remittance advice, the
respondents' reasons for cancelling
payment and the probabilities of
success in the principal case being in favour of the plaintiff, it
follows that the plaintiff
is entitled to provisional sentence in the
amount claimed.
Order:
[14]
In the circumstances the following order is made against the first
and second defendants jointly
and severally, the one paying the other
to be absolved:
1.
Provisional Sentence is granted against the first and second
defendants in the
amount of R3 344 335.84
2.
The first and second defendants are ordered to pay interest on the
amount of
R3 344 335.84, a
tempora morae
calculated from 22
November 2022 to date of payment.
3.
The first and second defendants are ordered to pay the plaintiff's
costs of the
action.
VAN
RHYN J
On
behalf of the Plaintiff:
Adv.
M J Merabe
Adv.
K Nhlapo- Merabe
Instructed
by:
Peyper
Attorneys
BLOEMFONTEIN
On
behalf of the Defendants:
Adv.
J A Motsepe SC
Adv.
TM Ngubeni
Instructed
by:
State
Attorneys
BLOEMFONTEIN
[1]
Act 3 of 2000.
[2]
Harrowsmith v Ceres Flats (Pty) Ltd
1979 (2) SA 722
(T) at 727G -
728D.
[3]
Rich v Lagerwey
1974 (4) SA 748
(A) at 754H.
[4]
Harrowsmith at 73 lB.
[5]
Rich
v
Lagervey
1974 (4) SA 748
(A) at 760F-H.
[6]
Barclays National Bank Ltd v HJ de Vos Boerdery Ondememings (Edms)
Bpk
1980 (4) SA 475
(A) at 484D-E.