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[2023] ZAFSHC 352
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Innovative Flexibles (Pty) Ltd v Itau Milling (Pty) Ltd (184/2022) [2023] ZAFSHC 352 (5 September 2023)
IN THE HIGH COURT
OF SOUTH AFRICA
FREE STATE
DIVISION, BLOEMFONTEIN
Reportable:
YES/NO
Of
interest to other judges Yes/No
Circulate
to Magistrates: YES/NO
Case No. 184/2022
In
the matter between:
INNOVATIVE
FLEXIBLES (PTY) LTD
APPLICANT
(Registration
Number: 2015/165640/07)
and
ITAU
MILLING (PTY) LTD
RESPONDENT
(Registration
Number: 2010/0070/07)
CORAM
:
GUSHA, AJ
HEARD
ON:
25 MAY 2023
DELIVERED
ON
:
This judgment was delivered electronically by circulation to the
parties’ representatives by way of email and by release
to
SAFLII. The date and time for delivery is deemed to be at 15h00 on 05
SEPTEMBER 2023.
JUDGMENT
INTRODUCTION
[1]
The applicant seeks an order that the two actions instituted in this
Honourable Court
under case numbers 184/2022 and 5441/22 be
consolidated and proceeded with as one action under case number
184/2022, essentially
as a claim in convention and reconvention.
[2]
The respondent opposes this interlocutory application.
[3]
The respondent opposes consolidation of the two actions on the
following basis;
(a)
That it has a right to have its special plea (
Lis alibi pendens
)
determined first;
(b)
The application for consolidation is premature
(c)
The adverse cost implications, the respondent holds the view that two
separate trials
will be more cost effective than the consolidated
proceedings.
(d)
Prejudice
(e)
The respondent contends that the applicant lacks
locus
standi
to launch this application and
seek relief in terms of Uniform Rule 11.
I
hold the view that this opposition is misplaced as this court is
seized with the main action/s between the parties.
THE PARTIES
[4]
The applicant and the respondent are both duly registered and
incorporated private
companies.
[5]
The applicant in the present matter is the plaintiff in the action
instituted under
case number 5441/2022 (the Innovative action) and
the respondent is the defendant.
[6]
The respondent in the present matter is the plaintiff in the action
instituted under
case number 184/2022 and the applicant is the
defendant.
[7]
The parties shall be referred to as cited herein.
FACTUAL MILIEU
[8]
The facts giving rise to the present application are largely common
cause between
the parties. In summation they are as follows; On 18
January 2022 the respondent issued summons against the applicant
under case
184/2022 (the Itau action) wherein it claimed debatement
of its account with the applicant. In this action the respondent’s
cause of action is premised primarily on an oral agreement for goods
sold and delivered for certain packaging materials.
[9]
The applicant entered its notice to defend and delivered its plea on
the 31
st
March 2022. On the 8
th
April 2022
instead of filing a counterclaim, the applicant launched a
liquidation application under case number 1661/2022. Said
application
has since been withdrawn.
[10]
Consequent to the withdrawal of the liquidation application, the
parties engaged in countless
correspondence and or negotiations
relating to the late filing of the counterclaim by the applicant.
Upon these not bearing the
desired result, the applicant instituted
action under case number 5441/2022 (the Innovative action),
essentially premised on a
written agreement.
[11]
It bears mentioning that both the Innovative action and the Itau
action are based on the same
cause of action, the disputed oral /
written agreement entered into between the parties for goods sold and
delivered.
APPLICABLE LAW
[12]
It needs no restating that in terms of the Uniform Rules a court may,
if it appears convenient
to the court to do so, order consolidation
of separate actions.
[1]
Convenience is a paramount provision for the consideration in
applications for consolidation of actions. A further consideration
being the avoidance of a multiplicity of actions and attendant
costs.
[2]
It further needs no
restating that the party requesting the consolidation bears the
onus
of
showing that that the consolidation will not cause substantial
prejudice to the other party.
[3]
[13]
The learned author Erasmus
[4]
provides
the following apposite elucidation
as
to the phrase “it appears to the court convenient to do so”:
“
The
paramount test in regard to consolidation of actions is convenience.
It has been held2 that the word ‘convenient’
connoted not
only facility or expedience or ease, but appropriateness in the sense
that procedure would be convenient if, in all
circumstances of the
case, it appears to be fitting and fair to the parties concerned. The
overriding consideration is that of
convenience of the parties of
witnesses and last but not least, of the court.3
Convenience of actions
will in general be ordered in order to avoid multiplicity of actions
and attendant costs. In
Nel v Silicon Smelters (Edms) Bpk
4
convenience was formed, inter alia, in the fact that (i) the
consolidated prosecution of the case would reduce costs and expedite
the proceedings; (ii) there would be one finding concerning a factual
dispute involving a number of parties and (iii) the plaintiff’s
various claims arising from the same cause of action would be heard
in one action.” (Footnotes omitted)
[14]
A court has a wide discretion to grant or refuse the application for
consolidation and may refuse
same albeit the balance of convenience
favours consolidation if the prejudice to the other party is
substantial.
[5]
SUBMISSIONS BY THE
PARTIES
[15]
The parties filed comprehensive heads of argument I shall therefore
for the sake of brevity not
replicate same herein, save to only
briefly refer to the salient aspects thereof. Truncated the arguments
are as follows; the applicant
contends that the opposition by the
respondent is ill-founded in law and fact as it does not cater for
the merits of the litigation
and the practical implications of
conducting two actions on the same similar issues and facts.
Moreover, the applicant contends
that save to mention prejudice no
facts substantiating same have been placed before the court.
[16]
The respondent in turn contends that the applicant has not made out a
case for the relief it
seeks as it has failed to explain why separate
actions were instituted that it now desires to have consolidated.
Furthermore that
the applicant has not passed muster of the
jurisdictional facts for consolidation.
APPLICATION TO THE
FACTS
[17]
As regard to the convenience of all concerned in the matter, I hold
the view that the consolidation
of all two actions will be for the
convenience of all concerned because the actions are based primarily
on the same cause of action,
thus the trial preparation for all the
actions would be one; the witnesses to be called will be required to
give similar evidence
on the same set of facts and the attendant
costs will be significantly reduced for all parties concerned.
[18]
Consolidating the two actions into one will facilitate expedience and
ease of process
[6]
and I daresay
will be cost effective, as such will of necessity result in all the
issues being addressed without the need for multiple
hearings,
possible divergent judgments, duplicated costs etc. The respondent
argued that a remedy to the impasse between the parties
would be a
debatement of the account, this they submitted would be dispositive
of the litigation between them. Regrettably I cannot
agree. The nub
of the issue between the parties in the respective actions is the
nature of the agreement entered into. Consequently,
the debatement of
the account will have no value without consideration to the
overarching disputes relating to the
causa
for
the business between the parties, which is essential and can only be
properly ventilated through the consolidated action.
[19]
I further hold the view that the applicant has in its papers and
during arguments sufficiently
explained the reasons why it was
necessitated to launch a separate action which it now seeks to
consolidate.
[20]
As regards the aspect of prejudice I am not persuaded that
substantial prejudice will result
to the respondent if the actions
are consolidated. If the claims are consolidated the dispute between
the parties will proceed
as a claim in convention and reconvention.
This will result in the expeditious disposal of the litigation
between the parties.
CONCLUSION
[21]
Resultantly I hold the view that the applicant has sufficiently
explained the interlocutory application
for leave to file a further
affidavit is dismissed with no order as to costs.
COSTS
[22]
With regards to what constitutes an appropriate costs order, it is a
well-established principle
of our law that the general rule regarding
costs is that the unsuccessful party pays the costs of the successful
party on the party
and party scale. Equally established is the
principle that the court exercises a discretion when considering an
appropriate costs
order and should, of necessity, exercise same
judiciously.
[7]
In the present
matter I am not persuaded that the respondent ought to be visited
with a punitive cost order.
ORDER
[23]
In the result I make the following order;
1.
The actions instituted in this court under case numbers 184/2022 and
5441/2022
are consolidated under case number 184/2022.
2.
The respondent to pay the costs of this application on the party and
party scale,
such costs to include the costs of counsel.
NG
GUSHA, AJ
On
behalf of the applicant
Adv.
G.D Harpur SC
Instructed
by:
Kramer
Weihmann Attorneys
BLOEMFONTEIN
On
behalf of the respondent:
Adv.
P. Zietsman SC
Instructed
by:
Noordmans
Inc
BLOEMFONTEIN
[1]
11.
Consolidation of actions
Where
separate actions have been instituted and it appears to the court
convenient to do so, it may upon the application of any
party
thereto and after notice to all interested parties, make an order
consolidating such actions, whereupon—
(a)
the said actions shall proceed as one action;
(b)
the provision of rule 10 shall mutatis mutandis apply with regard to
the action so consolidated; and
(c)
the court may make any order which to it seems meet with regard to
the further procedure, and may give one judgment disposing
of all
matters in dispute in the said actions.
[2]
Nel
v Silicon Smelters (Edms) Bpk
1981
(4) SA 792
(A),
Mpotsha
v Road Accident Fund
2000
(4) SA 696.
[3]
Mpotsha
supra
at
701 C-D.
[4]
Erasmus:
Superior Court Practice Vol 2 page D1-133.
[5]
Beier
v Thornycraft Cartridge Company; Beier v Boere Saamwerk Bpk
1961
(4) SA 187
(N) at 191),
New
Zealand Insurance Co Ltd v Stone
1963
(3) SA 63
(C) at 69),
Mbana
v Balintulo and others
[2021]
ZAGPPHC at para 10.
[6]
City
of Tshwane v Blair Atholl Homeowners Association
2019
(3) SA 398
(SCA) at para 50
[7]
Trencon
Construction (Pty) Limited v Industrial Development Corporation of
South Africa Limited and
Another
[2015]
ZACC 22
at para 85.