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2023
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[2023] ZAFSHC 449
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Khuselani Security and Risk (Pty) Ltd v Mangaung Metropolitan Municipality (5560/2022) [2023] ZAFSHC 449 (15 November 2023)
THE
HIGH COURT OF SOUTH AFRICA
FREE
STATE PROVINCIAL DIVISION
Reportable: YES/NO
Of
Interest to other Judges: YES/NO
Circulate
to Magistrates: YES/NO
Case
Number 5560/2022
In
the matter between:
KHUSELANI
SECURITY AND RISK (PTY) LTD
Applicant
and
MANGAUNG
METROPOLITAN MUNICIPALITY
Respondent
CORAM:
BERRY, AJ
HEARD
ON:
25 MAY 2023
DELIVERED
ON:
15 NOVEMBER 2023
JUDGEMENT
BY:
BERRY, AJ
JUDGMENT
[1]
The Applicant seeks judgment for unpaid capital
debt in the sum of R2 053 162.31 with interest of R444 551.47 up to
31 October 2022.
[2]
The Applicant states that should invoice numbers
145178 and 145179 have become prescribed, the capital claimed would
be R1 933 449.17
and the interest would be R439 060.79.
[3]
The Applicant claims
mora
interest from 01 November 2022.
[4]
The parties concluded an agreement in terms of
which the Applicant would render Security Services to the Respondent
on 29 January
2019.
[5]
This contract was followed by a service level
agreement concluded during February 2019.
[6]
The contract was for a period of 24 months,
commencing on 1 March 2019 and ending on 28 February 2021.
[7]
The Applicant would render invoices monthly,
reflecting which services has been rendered per site.
[8]
The Respondent agreed to pay these invoices within
30 days from submission.
[9]
The Applicant originally claimed an amount of R3
488 675.65 in the Founding Affidavit, but during hearing of the
matter it became
clear that the outstanding capital claimed is R2 053
162.31, as two payments were made.
[10]
Payments of R 717 756.67 on 26 May 2020, and R 717
756.67 on 25 June 2020 were made.
[11]
The Applicant argues that the Respondent admits
that Security Services were rendered during the period of the
contract, that invoices
were presented to the Respondent and that
certain of those invoices remain unpaid.
[12]
The Applicant asserts that it's not disputed that
the services were rendered, and that the correctness of the invoices
were never
disputed by the Respondent.
[13]
The Applicant argues that the two payments of R717
756.67 made on 26 May 2020 and R717 756.67 on 25 June 2020, were
payment of an
existing larger debt and that these payments
interrupted prescription of invoice numbers 145178 and 145179, thus
prescription could
only run from 25 June 2020.
[14]
The Applicant sent a letter of demand for payment
on 31 October 2022.
[15]
The Respondent raises the following points
in
limine
.
a)
That the claim for invoices 145178 for R115 781.33
and 145179 for R4 831.80 prescribed.
b)
Paragraph 12 of the agreement provides that any
dispute must be referred to arbitration.
c)
That the Respondent stopped rendering services on
14 December 2019 and the matter should have been referred for
mediation and arbitration.
d)
That
Sec 3(1)
of the
Institution of Legal
Proceedings Against Certain Organs of State Act 40 of 2002
requires
that the creditor must give notice in writing of its intention to
institute legal proceedings and that the letter of demand
for payment
on 31 October 2022 does not meet the requirements.
[16]
The Applicant claim that it complied with the
service-level agreement and rendered the services in accordance with
the contract.
[17]
The Respondent disputes that the Applicant
complied with the agreement and deny that services were rendered in
accordance with the
contract, in that the Applicant stopped rendering
services on 14 December 2019, without invoking any of the dispute
resolution
procedures provided for in the contract.
[18]
The Respondent sent a letter to the Applicant
advising that it disputes the invoices rendered from 16 December 2019
to 31 January
2020 on 9 January 2020, as the Applicant stopped
rendering services from 14 December 2019.
[19]
The Respondent relies on par 9.4 the agreement:
“
In
the event that the contractor fails to perform the services in this
agreement, the municipality shall, without prejudice to its
other
remedies under this agreement, deduct from the contract price as a
penalty, a sum calculated on the underperformed services.”
[20]
The Respondent did not make any submission on the
amount of the penalty it may deduct in terms of Par 9.4 or provide
any indication
of how the amount should be calculated.
[21]
The Respondent relies on the arbitration clause,
as well as its right to deduct penalties in terms of Par 9.4 of the
contract.
[22]
The Respondent submits that the dispute arose on
14 December 2019 and that the Applicant should have exercised its
rights in terms
of Par 10 of the agreement, which deals with breach
of the agreement, as well as the Arbitration Clause in Par 12.
[23]
The Respondent asserts its rights created in the
contract.
[24]
The Respondent submits that
Sec 3(1)
of the
Institution of Legal Proceedings Against Certain Organs of State Act
40 of 2002
is applicable.
[25]
The Applicant submits that Act 40 of 2002 is not
applicable as this is not a claim for damages, but a contractual
claim.
[26]
I regard the argument around the applicability of
Act 40 of 2002 as a legal question, but in view of my finding, I do
not deal with
this question.
[27]
The Respondent submits that the Applicant has been
aware of the dispute since 14 December 2019, but elected to follow
the Application
procedure on 08 November 2022, to prevent
prescription.
[28]
There are no merits in this argument, as the
Applicant could just as easily have issued summons on 08 November
2022. But it elected
to follow motion proceedings.
[29]
The Applicant states in Paragraph 22 of its
Founding Affidavit that it is preferred that Action Proceedings
should be instituted
in a claim for money, and that it is usually
frowned upon to institute Application Proceedings for payment.
[30]
The Applicant argues that this case justifies
Application proceedings as it did not foresee any disputes.
[31]
This was the Applicant’s position at the
time it drafted the Founding Affidavit. It did not have the
Respondent’s version
at the time.
[32]
A real
bona fide
and genuine dispute of facts arose. The Respondent
disputes the amount claimed; whether prescription of the two invoices
occurred;
and whether penalties may be levied in terms of the
contract exist.
[33]
This
brings this Application into the realm of
Plascon-Evans
Paints v Van Riebeeck Paints
[1]
.
[34]
It must be decided on the Respondent’s
version, together with those facts that are undisputed and common
cause whether factual
disputes exist.
[35]
The Respondent’s version should be rejected
if it is untenable and far-fetched.
[36]
I find that there is a genuine dispute of facts,
and that Plascon-Evans is applicable under the circumstances of this
case.
ORDER
[37]
The following Order is made.
1.
The Application is dismissed with costs.
BERRY,
AJ
APPEARANCES:
For
the Applicant:
Adv.
G Reddy
Instructed
by:
Vathers
Attorneys
C/O
Honey Attorney’s
BLOEMFONTEIN
For
the Defendant:
Adv.
M Motselebane
Instructed
by:
Moroka
Attorneys
BLOEMFONTEIN
[1]
Plascon-Evans
Paints v Van Riebeeck Paints
[1984] ZASCA 51
;
1984 (3) SA 623
(A) at 634H-635A)