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2023
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[2023] ZAFSHC 427
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Medicross Healthcare Group (Pty) Ltd v Van Der Merwe and Associates Inc and Others (2877/2021) [2023] ZAFSHC 427 (1 November 2023)
IN THE HIGH COURT
OF SOUTH AFRICA
FREE STATE
DIVISION, BLOEMFONTEIN
Case
No.: 2877/2021
Reportable:
YES/NO
Of Interest to other
Judges: YES/NO
Circulate to
Magistrates:
YES/NO
In
the matter between:
MEDICROSS
HEALTHCARE GROUP (PTY) LTD
Plaintiff/Respondent
and
DR
J D VAN DER MERWE & ASSOCIATES INC
1st Defendant/Applicant
DR
J ZURICH & ASSOCIATES NO. 68
INC.
Second Defendant
NEDBANK
LIMITED
Interested Party
CORAM:
VAN RHYN, J
HEARD
ON:
24 AUGUST 2023
DELIVERED
ON:
1
NOVEMBER 2023
[1]
The first applicant prays, in terms of the provisions of Rule 24(1)
of the Uniform
Rules of Court, for leave to file a counterclaim.
[2]
The application is opposed by the respondent on the following
grounds:
2.1
The applicant has failed to provide reasonable and acceptable grounds
for its
failure to timeously deliver
its counterclaim; and
2.2
On a construction of the time periods applicable, any contemplated
counterclaim
has become prescribed;
2.3
The applicant has instituted a damages claim resultant from breach of
contract in another
division of the High Court. Further claims cannot
follow in circumstances where the ‘once and for all’ rule
should
apply.
[3]
The respondent, Medicross Healthcare (Pty) Ltd issued summons against
the applicant,
Dr JD van der Merwe & Associates Inc. (as first
defendant) and Dr J Zurich & Associates No 68 Inc. (as second
defendant)
on 24 June 2021 following the conclusion of an
Administration Agreement, a Loan and Financing Agreement and Cession
of Book Debts
agreement, referred to by the parties as the trio of
agreements. The third defendant is Nedbank Limited, a
commercial
bank.
[4]
It is alleged that since 2007, the respondent performed in terms of
the trio of agreements
and rendered the services envisaged by the
parties to the second defendant. Subsequent to the named director of
the second defendant,
Dr J Zurich sought to leave the practice of the
second defendant during 2014, the respondent and the remaining
directors of the
second defendant continued, after a name change,
with the operation of the practice under the name and guise of the
applicant until
the termination of the trio of agreements on 30 May
2019.
[5]
It is alleged in the particulars of claim that the name change never
occurred as intended
by the parties and that the applicant was
registered as a new corporation. Following a meeting on 25 June 2019
it was agreed orally
that no name change to the trio of agreements
are required and that the trio of agreements would thus continue as
such. The respondent
prays for the rectification of the trio of
agreements and alternatively, in the event that the court finds that
there does not
exist a basis to rectify the trio of agreements, that
the respondent and the applicant on certain dates, expressly and/or
tacitly
agreed to proceed as the parties to the trio of agreements
and gave effect thereto.
[6]
The respondent furthermore prays for payment of the sum of R
190 741.56 with
interest and costs from the applicant,
alternatively payment of the same amount from the second defendant,
with further consequential
relief. In their amended plea (filed
on 15 February 2022) the applicant and the second defendant deny that
they have entered
into any written agreements with the applicant. The
applicant and the second defendant have never been signatories to
such agreements
and have never acceded to the terms thereof.
[7]
It is pleaded that the applicant and the respondent have entered into
a tacit agreement,
referred to as “the Real Agreement”
which came about during 2014 or 2015 when the respondent commenced
rendering administration
services to the applicant without the
parties having concluded any written or oral agreement. It is alleged
that the respondent
breached the terms of the Real Agreement by,
inter
alia
,
failing to account to the applicant for monies drawn by the
respondent from the applicant and second defendant’s bank
account,
acted in contravention of certain regulations relating to
the Banks Act
[1]
, made a secret
profit and failed to exercise due skill and diligence in
performing its mandate in terms of the Real Agreement.
[8]
On 9 September 2019 and following an urgent application brought by
the respondent,
this court granted an interim order,
inter alia
,
directing Nedbank (cited as an interested party in this application)
to keep an available balance of R500 000.00 (five hundred
thousand rand) in a specific bank account, presumably that of the
applicant, pending final adjudication of the application.
[9]
The matter was settled on 20 February 2020 in terms whereof the
amount of R500 000.00
was reduced to R250 000.00. In terms
of the settlement agreement, made an order of court, the respondent
was ordered to account
to the applicant and second defendant for all
the respondent’s dealings and transactions as agent of the
applicant and the
second defendant. Such accounting to include the
basis of the dealings and transactions and the submission of such
documents as
the applicant deems appropriate.
[10]
In their amended plea the applicant avers that, notwithstanding the
order granted on 20 February 2020,
the respondent have failed,
refused or neglected to provide a proper statement of account to the
applicant (and second defendant)
to date, being 15 February 2022.
Therefore, the applicant (and second defendant) deny that they owe
any amount to the respondent.
Reference is made to the fact that the
applicant (and second defendant) have instituted action against the
respondent under case
no: 2021/46964 in the High Court of South
Africa, Gauteng Local Division in respect of the claim for payment of
an amount which
the respondent is indebted to the applicant (and the
second defendant).
[11]
An amendment to the initial plea followed as a result of an earlier
exception. The notice of intention
to amend the plea was delivered in
the latter part of November 2021. The applicant’s attorneys,
although alluding to damages
suffered by the applicant in the amended
plea, omitted to include contractual claims for breach of the terms
of the Loan and Finance
Agreement and the Cession of Book Debts
Agreement by the respondent. On 27 September 2022 the applicant
formally requested the
respondent’s consent for the late filing
of its intended counterclaim. No response or consent was
forthcoming notwithstanding
a further request and follow-up enquiry
addressed to the respondent’s attorney dated 3 October 2022.
[12]
As a result the applicant launched the present application on 1
November 2022 for leave of this court
to file its counterclaim. On 24
November 2022 the respondent delivered an answering affidavit in
opposition thereto where after
the applicant filed its replying
affidavit on 15 December 2022.
[13]
In order to succeed with the relief claimed the applicant must:
13.1
provide a reasonable and acceptable explanation for the lateness; and
13.2
show an entitlement to institute a counterclaim.
[2]
[14]
Rule 24(1) of the Rules, in terms of which the present application is
brought, provides, in part,
that:
“
A defendant who
counterclaims shall, together with his plea, deliver a claim in
reconvention setting out the material facts thereof
in accordance
with rules 18 and 20 unless the plaintiff agrees, or if he refuses,
the court allows it to be delivered at a later
stage . . .”
[15]
A medical doctor, Dr D P Pretorius, deposed to the affidavit in
support of the application. Dr Pretorius
is a director of the
applicant. He explained that it is clear from the applicant’s
amended plea that it has suffered damages
and therefore has a
counterclaim,
inter alia,
due to the breach of the Loan and
Finance Agreement by the respondent for not paying the consultancy
fees for the last two months,
being July and August 2019, of the
termination period.
[16]
The applicant furthermore has a claim due to the respondent’s
breach of the Cession of Book Debts
Agreement by not properly handing
over the book debts to the defendant as at 31 August 2019 or
crediting such amount to the loan
account. It is stated under
oath that the failure of the applicant’s attorneys to include
the contractual claims as
specific counterclaims, was an unforeseen
and unintentional error on their part.
[17]
Subsequent to the judgment in the matter of
Dr
L J Faul and Associates NO 14 Incorporated and others v Medicross
Healthcare Group (Pty) Ltd
[3]
the appellant’s
attorneys reconsidered the matter and concluded that it is, after
all, in fact necessary to file specific
counterclaims on behalf of
the applicant. A copy of the judgment relied upon by the applicant is
appended to the application.
[18]
While drafting this application, and upon reconsideration of the
agreements concluded between the applicant
and the respondent, the
applicant’s attorneys furthermore realised that the applicant
also has a counterclaim in terms of
the Cession of Book Debts
Agreement for breach of contract and/or damages.
[19]
The respondent, in opposing the application, criticised the
explanation proffered by the applicant
as being wholly
unsatisfactory. It is contended by the respondent that what is
completely absent from the explanation is an express
record of:
19.1
The instructions being issued by the applicant to the mandated
attorney;
19.2
The date of such instruction;
19.3
An acceptance by the legal representative of the applicant of such
instruction.
[20]
Counsel on behalf of the respondent, Mr Posthumus, argued that the
failure to properly explain the
default is exasperated by the failure
to attach a confirmatory affidavit by the applicant’s attorney,
Mrs P Lombard of Mashabane
Liebenberg Sebola Inc., confirming that
she had received instructions to institute such counterclaims. In
essence the argument
on behalf of the respondent is that the
explanation proffered by the applicant lacked detail regarding the
instructions to include
a counterclaim and the only reason for this
is, so the argument goes, because the instruction was never issued.
[21]
On behalf of the respondent it is furthermore contended that the
Faul
judgment only deals with a claim for unpaid consultancy fees. The
Faul
judgment did not deal with claims in terms of the cession
of book debts which forms the second contemplated claim by the
applicant.
Therefore, reliance upon the
Faul
judgment, which
was delivered on 8 August 2022, does not avail the applicant of an
explanation for the delay in delivering its
counterclaim in respect
of this particular claim.
[22]
The applicant must, in addition to a proper explanation for its
delay, demonstrate its entitlement
to institute a claim. The
respondent contends that, from the contents of the intended
counterclaim attached to the founding
affidavit, it is evident that
the claims as advanced have become prescribed. In respect of
claim A, based on the alleged
unpaid consultancy fees, the applicant
seeks to claim an amount of R 693 274.69 that has become due in
July 2019 and August
2019. In respect of claim B, the applicant seeks
payment sounding in money to the value of R238 165.22, emanating
from a debt
that was payable by 31 August 2019.
[23]
The argument raised by the respondent is that the prescription period
for both claims are a period
of three years with the result that both
these intended claims have become prescribed. A further argument
relied upon by the respondent
is that the amended plea contains a
denial that the applicant entered into any written agreement with the
plaintiff. However, in
the intended counterclaim the applicant seeks
to incorporate as part of their claims A and B, a reliance on the
Loan and Finance
Agreement whilst in paragraph 15 reliance is placed
upon a tacit agreement between the parties. The further point relates
to the
fact that the intended counterclaims will be excipiable.
[24]
In an instance where a plea is delivered without a counterclaim, a
party seeking to introduce a counterclaim
at a later stage needs
consent of the plaintiff. If consent is refused, as in the matter at
hand, the defendant may approach the
court in terms of Rule 24(1) for
leave to do so. The provisions of Rule 24 (1) make it clear that the
court has a discretion to
allow a counterclaim to be filed at a later
stage. The exercise of the court’s discretion may be guided by
decisions as to
the circumstances in which the courts should exercise
their discretion in favour of allowing the amendment of pleadings or
the
upliftment of bar.
[4]
[25]
In
Hosch-Fömrdertechnik
SA (Pty) Ltd v Brelko CC and Others
[5]
the
court dealt with an application by the defendant for leave to
institute a claim in reconvention in terms of the provisions
of
Rule 24(2). In regard to the requirements to be satisfied in order to
succeed the court held that it was necessary for the applicant
to
disclose its
locus
standi
and further to disclose the cause or causes of action upon which the
action against them would be based. To this the learned Judge
added:
“
The need to
establish a
prima facie
case of potential success in an action
against the said persons does not enter the picture. A condition
rendering entitlement to
take action subject to success in the action
seems absurd and would be misplaced in the context of Rule 24(2). Cf
Shield Insurance Co Ltd v Zervoudakis
1967 (4) SA 735
(E) at
737G-738A. I do not think that the condition in Rule 24(2) must be
construed in this way.”
[26]
In
Lethimvula
Healthcare (PTY) LTD v Private Label Promotions (PTY) LTD
[6]
Van Oosten J concluded that the same reasoning must apply to an
application under Rule 24(1). The court confirmed that there
are two
criteria which must be met and held that the only grounds on which an
application in terms of the provisions of Rule 24 (1)
may be
resisted would be if the intended counterclaim fails to comply with
the provisions of Uniform Rules of Court 18 and
20.
[7]
[27]
In
Lethimvula
Healthcare
the court held that it is not called upon to make a determination
relevant to the merits of the counterclaim without having the
benefit
of oral evidence, as this would result in a premature determination
of the issues.
[8]
Once the
intended counterclaim has been filed it remains open to the
plaintiff, in terms of the rules of court, should it wish
to do so,
to address such causes of complaint as there may be.
[28]
In the matter of
Union
Finance Holdings (Pty) Ltd v Bonugli NO and Another
[9]
the
same bench as in the
Lithimvula
matter, considered whether a defendant had met the second criteria
for the late delivery of a counter claim, namely the entitlement
to
institute the counter claim. The plaintiff had opposed the
introduction of the defendant’s counterclaim on the basis that
same had become prescribed. Van Oosten J considered whether
prescription can be raised in such proceedings, being interlocutory
of nature. With reference to the matters of
Rand
Staple- Machine Leasing (Pty) Ltd v ICI (SA) Ltd,
[10]
Grindrod (Pty) Ltd v Seaman
[11]
and
Associated
Paint & Chemical Industries (Pty) Ltd t/a Albestra Paint and
Lacquers v Smit
[12]
the court held that the defence of prescription may be raised
in interlocutory proceedings, either if it were common
cause,
or in situations where the claim or right to claim were ‘known
to have prescribed’
[13]
.
[29]
Mrs Sander, counsel on behalf of the applicant, argued that it has to
be kept in mind that the contractual
terms on which the defendant in
the
Union
Finance Holdings
matter premised its counterclaims are different to those on which the
applicant, in the matter at hand, has based its intended
claims.
Consequently, whether the contractual obligations form a bilateral
agreement are in truth and in fact reciprocal in nature
and thereby
struck by the provisions of section 13(2) of the Prescription Act
[14]
will be a matter of contractual interpretation on a case by case
basis.
[30]
Furthermore, for reciprocity to exist the obligations of one party
must be undertaken in exchange for
the obligation of the other party
to be performed but, as confirmed by the Appellate Division in
Rich
and Others v Lagerwey:
[15]
“
Whether ‘such
a relationship’ does exist, will depend on the terms of the
particular contract under consideration …
common sense would
seem to indicate that inter-dependent promises are
prima facie
reciprocal, unless a contrary intention clearly appears from
consideration of the terms thereof.”
[31]
The dispute between the parties, as is evident from the particulars
of claim and amended plea, relevant
to the conclusion of the
agreements, pertains to the date of conclusion and the identity of
the contracting parties. The terms
of the agreements relied upon by
the parties are for the most part identical. In contracts which
create rights and obligations
on each other, it is basically a
question of interpretation whether the obligations are so closely
connected that the principle
of reciprocity applies.
[16]
[32]
When a contract is bilateral the obligations on the two contracting
parties are
prima
facie
reciprocal
unless the contrary intention clearly appears from consideration for
the terms of the contract.
[17]
Reciprocity of debt in law does not exist merely because obligations
which are claimed to be reciprocal arise from the same contract
and
each party is indebted in some way to the other party. An
evaluation and more immediate correlation than that is required.
The
overriding consideration is the intention of the parties and the
question whether the performance of respective obligations
was
reciprocal.
[33]
I am satisfied that, at least
prima
facie,
the obligations of the parties are reciprocal and therefore the
applicant is entitled to invoke the provisions of section 13(2)
of
the Prescription Act. The court in the
Lethimvula
Health Care
matter also held that the applicant is not required to establish a
more onerous requirement in order to succeed in an instance
where he
seeks leave from the court to allow introducing a counterclaim
subsequent to the delivery of a plea. At this stage the
court is not
called up to make a determination relevant to the merits of the
counterclaim without having had the benefit of oral
evidence. The
applicant is not obliged to show that there is a prospect of success
in the action for him to be entitled to
institute a counterclaim.
[18]
[34]
From the contents of the draft order made by agreement between the
parties in case no: 3971/ 2019,
a date and time mutually convenient
to the parties for the purpose of a debatement of the accounting
delivered by the respondent
was to take place. It is therefore
evident that, already on 20 February 2020, it had been envisaged that
the respondent, subsequent
to accounting to the applicant and proper
debatement, might be liable for repayment to the applicant.
[35]
On behalf of the respondent it was furthermore argued that Mrs
Lombard actually premised her request
on the outcome of the
Faul
matter
and therefore the contention that the attorney omitted to institute
such counterclaims is clearly false. Furthermore, the
same attorneys
represented one of the parties in the
Faul
matter. To my mind the contents of the draft order dated 20
February 2020 indicates that a counterclaim had been envisaged
and
lends support for the contention that the attorney omitted to
institute the same. The court in general are ordinarily reluctant
to
penalise a litigant on account of his attorneys’ negligence or
errors.
[19]
[36]
Insofar as the respondent rely upon the “once- and- for- all”
rule, also this objection
may be dealt with either in the action
proceedings in the Gauteng High Court or at a later stage during the
main action and following
the filing of the applicant’s
intended counterclaim. The respondent will suffer no prejudice if
leave is granted to the applicant
to file its counterclaim. The
respondent will not lose its procedural and substantive rights in
terms of the court rules. On the
other hand, the applicant stands to
be prejudiced if the application is refused.
[37]
In the exercise of my discretion and for the reasons stated together
with the consideration of justice,
equity and convenience, I am of
the view that I should exercise my discretion in favour of the
applicant and therefore leave should
be granted to the applicant to
introduce its counterclaim in terms of Rule 24(1)
[38]
The applicant argued that it was put under trouble and expenses to
proceed with this application as
a result of the respondent failing
to grant such permission. Although the applicant is successful in
obtaining the relief claimed
herein, the customary rule that a
litigant requesting an indulgence should pay the costs, apply in
casu
. The only exception would be if the respondent’s
opposition to the application was unreasonable. Having regard to the
arguments
raised by the respondent herein, I cannot fault the
respondent for opposing the application and therefore the customary
cost order
will follow.
[39]
ORDER:
The following order is
issued;
1. The
Applicant/First Defendant’s non-compliance with the provisions
of Rule 22(1) is hereby condoned.
2.
Condonation for the late filing of the Applicant/First Defendant’s
counterclaims (claims in reconvention)
is granted
3. The
Applicant/First Defendant is granted leave to file its counterclaims
within 10 days from the date of this
order.
4. The
Applicant is ordered to pay the costs of the application.
I
VAN RHYN J
On
behalf of the Applicant:
ADV.
I SANDER
Instructed
by:
ROSENDORFF
REITZ BARRY ATTORNEYS
BLOEMFONTEIN
On
behalf of the Respondent:
ADV.
I L POSTHUMUS
Instructed
by:
ALBERTS
ATTORNEYS INC.
BLOEMFONTEIN
[1]
Act 94 of 1990.
[2]
See
Lethimvula Healthcare (Pty) Ltd v Private Label Promotion (Pty) Ltd
2012 (3) SA 143
(GSJ) at 146 [8].
[3]
(28795/2019) [2022] ZAGPJHC 512 (8 August 2022).
[4]
Metje & Ziegler Ltd v Stauch, Vorster & Partners 1972 (4) SA
679 (SWA).
[5]
1990 (1) SA 393 (W).
[6]
(Supra) at [9].
[7]
Lethimvula (supra) at [11].
[8]
Lethimvula (supra) at [11].
[9]
[2012] JOL 29230 (GSJ).
[10]
1977 (3) SA 199 (W).
[11]
1998 (2) SA 347 (C).
[12]
2000 (2) SA 789
(SCA) at para 9.
[13]
Stroud v Steel Engineering Co Ltd and Another
1996 (4) SA 1139
(W)
at 1142.
[14]
Act 68 of 1969.
[15]
1974 (4) SA 748
(AD) at 761H-762A.
[16]
B K Tooling (Edms) Bpk v Scope Precision Engineering (Edms) Bpk
1979
(1) SA 341
(A) at 418
[17]
Grand Mines (Pty) Limited v Giddey NO
[1998] ZASCA 99
;
1999 (1) SA 960
(SCA) at 971
C-D (Minority judgment of Schutz JA not in
conflict with the
majority on this point).
[18]
Wigget v Wannenburgs 2022 JOL 54178 (GP).
[19]
Reinecke v Incorporated General Insurance Ltd
1974 (2) SA 84
(A) at
92K-H.