About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Kwazulu-Natal High Court, Pietermaritzburg
SAFLII
>>
Databases
>>
South Africa: Kwazulu-Natal High Court, Pietermaritzburg
>>
2024
>>
[2024] ZAKZPHC 32
|
|
Hughes v Hughes and Others (2267/2021P) [2024] ZAKZPHC 32 (16 February 2024)
IN THE HIGH COURT OF
SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
CASE NUMBER:
2267/2021P
In the matter between:
ALLISON
HUGHES
PLAINTIFF
and
ROBERT WAYNE
HUGHES
FIRST DEFENDANT
TUZI GAZI WATERFRONT
(PTY) LTD
SECOND DEFENDANT
ROBERT WAYNE HUGHES
N.O.
THIRD DEFENDANT
LYNETTE MERLE HUHES
N.O.
FOURTH DEFENDANT
JUDGMENT
P
C BEZUIDENHOUT J
:
[1]
Plaintiff, during April 2021, instituted an action against
Defendants. She claimed
payment of the amount R2 225 010.00
consisting of penalties charged at R50 000.00 per month in a total
amount of R1 800 000.00
and interest charged at Nedbank’s prime
overdraft rate from time to time in the total amount of R425 010.00
together with
interest thereon and costs. There is also an
alternative claim in the sum of R476 818.00 and costs on an attorney
and client
scale.
[2]
Defendants excepted to the particulars of claim that it did not set
out that there
had been compliance with the requirement that 14
(fourteen) days notice be given to remedy the breach. Plaintiff
then brought
an application to amend the particulars of claim which
was opposed by Defendants. This application was heard by
Mlotshwa
A.J. who provided a written judgment and ordered that
Plaintiff be granted leave to amend the particulars of claim in terms
of
the notice that was delivered on 4 May 2022 and that Defendants
had to pay the costs of the application jointly and severally.
In his judgment he held that amendments would always be allowed
unless the application to amend is
mala fide
or it would cause
injustice to the other side which cannot be compensated by costs.
He found that the application to amend
the particulars of claim had
to succeed as neither prejudice nor injustice will be suffered by
Defendants. Plaintiff thereafter
amended their particulars of
claim.
[3]
Defendants then on 22 June 2023 excepted to Plaintiff’s amended
particulars
of claim. It was contended that the amended
particulars of claim lacked averments which are necessary to sustain
a cause
of action. It was contended that Plaintiff’s
claim against First Defendant relies upon an alleged failure by First
Defendant to comply with the written agreement for the sale and
purchase of shares which are attached to the particulars of claim.
The particulars of claim allege that First Defendant did not comply
with his obligations in terms of the sale of shares agreement
and
failed to make a certain payment and that Plaintiff accordingly is
entitled to the outstanding balance. It is contended
that the
sale of shares agreement contains the terms of the agreement between
First Defendant and Plaintiff. In clause 11
of annexure “A”
to the particulars of claim there is a requirement that in the event
of a party committing a breach
of the agreement 14 (fourteen) days
written notice requiring the breach to be remedied was required
before pursuing any possible
remedies. In paragraph 21 of the
amended particulars of claim it refers to annexure “G”, a
letter sent by Plaintiff
but does not plead that there has been
compliance with clause 11 of the agreement annexure “A”.
Further it refers
to a breach of the agreement “or”
failing to remedy it where the wording is actually breach of the
agreement “and”
fails to remedy it. It is contended
that the letter of demand annexure “G” is in actual fact
a notice in terms
of section 345 of the Companies Act against Second
Defendant. Without compliance with clause 11 there can be no
cause of
action.
[4]
It was further submitted that Plaintiff’s amended particulars
of did not disclose
a valid cause of action. Especially
annexure “G” which is pleaded as the necessary document
to sustain the cause
of action does not do so. Referring to the
decision of Absa Bank Ltd v Mosima and Another 2023 (JOL) 60465 (GP)
it was submitted
that the plaintiff had not properly pleaded
compliance with clause 11 and therefore the amended particulars of
claim is excipiable.
It was further submitted that the
facta
probanda
had to be pleaded and not
facta probantia
.
Therefore every fact which would be necessary for Plaintiff to prove
must be pleaded. It was further submitted that
there must be
compliance with the peremptory contractual provision created by
clause 11. What has to be determined is whether
annexures “G”
and “H” and the amendments made by Plaintiff associated
with these annexure removed the complaint
in the exception. It
requires consideration of the requirements of clause 11.
[5]
It was further submitted that Plaintiff’s notice must show:
(a)
that a breach occurred by First Defendant;
(b)
that the breach must be remedied;
(c)
that the breach was required to be remedied within 14 (fourteen)
days; and
(d)
that the innocent party is entitled to claim specific performance or
cancellation and damages
if the breach is not remedied within 14
(fourteen) days.
It is submitted that no
such demands were made.
[6]
It was submitted on behalf of Plaintiff that the exception was a
mirror image of the
opposition to the amendment which was sought,
opposed by Defendant and which was granted. Defendants wanted
this Court to
revisit the question which had already been decided.
It is the same issues now contained in the exception which were in
the
opposition to the amendment. Defendants contention
that the particulars of claim were excipiable had already been
rejected.
It was therefore contended that it was
res
judicata
.
[7]
It was submitted that a pleading would only be excipiable as
disclosing no cause of
action if such exception relates to the
material facts being the
facta probanda
and not the facts
which prove the material facts being
facta probantia
.
The contents of the notice of breach therefore constitutes
facta
probantia
and does not relate to the material facts of the
Plaintiff’s cause of action. It was submitted that
regardless of the
contents of the notice of breach the particulars of
claim were not excipiable. It was submitted all that was
required in
compliance with clause 11 of the agreement was written
notice from Plaintiff to First Defendant requiring that the breach be
remedied.
It was further submitted that if the exception was
allowed it would require an amendment to the breach notice which
cannot be done.
It was submitted that the exception must be
dismissed and that costs should be ordered to be paid on a scale as
between attorney
and own client.
[8]
Clause 11 of the sale of shares agreement reads as follows:
“
Breach:
Should either party
commit a breach of this agreement and fails to remedy such breach
within 14 (fourteen) days of written notice
requiring the breach to
be remedied, the party giving the notice will be entitled, at is
option, either to cancel the sale agreement
and claim damages or to
claim specific performance of all the defaulting parties
applications, together with damages, if any, whether
or not such
obligations have fallen due for performance.”
[9]
The letter annexure “G” which it is contended does not
comply with clause
11 is addressed to Tuzi Gazi Waterfront (Pty) Ltd
and Robert Wayne Hughes. It refers to the agreement which had
been breached
when the settlement agreement and the suretyship
agreements were signed. It sets out that certain payments were
made but
that there was short payment. There is accordingly
capital, interest and penalties due. It then sets out that they
are indebted to Plaintiff and the amounts which they allege are due.
It sets out in the one paragraph “Our instructions
are that
despite demand you have failed and or refused to make payment of the
amount due to our client and have unjustifiably enriched
yourselves
to the detriment of our client.” It then sets out in two
paragraphs that in terms of section 345(1)(c) of
the Companies Act 61
of 1973 a company will be deemed to be unable to pay its debt if it
is proved to the satisfaction of the court
that the company is unable
to pay its debts and that it may then be wound up. It then
indicates that it also gives notice
in terms of section 345(1)(c) of
the said Act. It ends off with the following “It is our
instruction to advise you
that our client reserves the right to claim
further damages due to loss of income and prospective business
opportunities as well
as a punitive costs order against you.”
[10]
In the judgment of Mlotshwa A.J. dealing with the issue whether
Plaintiff was entitled to amend
her particulars of claim the court
dealt with whether clause 11 had been complied with but made no
finding in that regard and concluded
in paragraph 13:
“
In
the result, the application to amend plaintiff’s claim must
succeed as neither prejudice nor injustice will be suffered
by the
defendants.”
Accordingly, on my
reading of the said judgment, it found that the amendment should be
allowed as there would be no prejudice or
injustice. This it
concluded after referring to the decision of Moolman v Estate Moolman
1927 CPD 27
where it referred to amendments that should be allowed
unless it is
mala fide
or without cause and injustice to the
other side which cannot be compensated by costs. In my view it
did not make any specific
finding in regard to whether clause 11 had
been complied with or had to be complied with. Although the
parties are the same
the relief that was sought was to allow an
amendment and not whether it was excipiable. Whether it was
excipiable was a factor
but as set out above that issue was not
specifically dealt with.
[11]
The matter is therefore not
res judicata
and it must be
considered whether there is merit in the exception.
[12]
Paragraph 21 of the amended particulars of claim states:
“
On
or about 4 August 2020 alternatively 30 November 2020, in a written
demand addressed to both First and Second Defendants, the
Plaintiff
notified them that they were in breach of the Sale of Shares
Agreement, by failing to pay the sums pleaded hereinabove.
The
demand is annexure “G” and the Sheriff’s return of
service is annexure “H”.”
[13]
On a reading of annexure “G” it would appear to me that
it is a combined letter which
is addressed to First Defendant and
Second Defendant. Specific reference is made in the letter to
noncompliance by First
Defendant and then also sets out what the
consequences would be to Second Defendant if it is found that it is
unable to pay its
debt. Accordingly, in my view, on a reading
of the letter, it is not merely a notice in terms of section 345 of
the Companies
Act. Due to the submissions made on behalf of
Defendants it involves possible interpretation of the letter to
determine whether
it is a breach notice to First Defendant or whether
it is only a notice in terms of section 345 of the Companies Act.
[14]
It was submitted on behalf of Defendants that the breach notice must
contain:
(a)
That a breach occurred by First Defendant. The letter refers to
the agreements concluded
and states that there were payments still
due.
(b)
That the breach must be remedied. The letter sets out that
First Defendant has refused
to make payment of the amount and that
Plaintiff reserves her right to claim further damages and costs.
(c)
That the breach was required to be remedies within 14 (fourteen)
days. It is
indeed so that the period of 14 (fourteen) days is
not mentioned, in the letter. In Godbold v Tomson
1970 (1) SA 61
(D)
at 65B-D also referred to by Mlotshwa A.J. in his judgment, it was
held:
“
The
right of election to cancel the contract (or to enforce it) arises if
the purchaser continues, for more than 14 days after the
date of the
written notice, in his default – that is to say in the default
which he is called upon by the notice to remedy.
There is,
however, no necessity to specify in the notice the period within
which the default must be remedied (see Tangney and
Other v Zive’s
Trustee,
1961 (1) SA 449
(W) at p. 453G and Chatrooghoon v Desai and
Others,
1951 (4) SA 122
(N)).”
Accordingly there is no
necessity that it has to set out that it must be remedied within a
period of 14 (fourteen) days.
(d)
That the innocent party is entitled to claim specific performance or
cancellation and damages
if the breach is not remedied within 14
(fourteen) days. The letter specifically states that client
reserves the right to
claim further damages due to loss of income and
in respect of business opportunities as well as a punitive costs
order. It
does not state if not remedied within 14 (fourteen)
days but as already set out that is not a necessity. It does
however
say that it will claim further damages.
[15]
In terms of clause 11 if a party breached the agreement and failed to
remedy it within 14 (fourteen)
days of receiving a written notice
then it will be at the option of the other party to cancel the
agreement or claim damages for
specific performance. What
clause 11 requires is a notice that the other party is in default and
that the default must be
remedied. There is thus sufficient
compliance in the letter annexure “G” to clause 11 of the
agreement.
It was clear from the letter to First and Second
Defendants that they were in breach of the agreement and that they
had to remedy
the breach by paying the outstanding amount.
There was sufficient compliance to enable Defendants to plead.
If they
so wish it is an issue which they could pursue further in
their pleadings.
[16]
Plaintiff has submitted that a punitive cost order should be
granted. I do not think it
is justified in the circumstances.
The following order is therefore made.
Order
:
The exception is
dismissed with costs.
P C BEZUIDENHOUT J.
JUDGMENT
RESERVED:
29
JANUARY 2024
JUDGMENT
HANDED DOWN:
16
FEBRUARY 2024
COUNSEL
FOR APPLICANT:
C
HATTINGH
Instructed
by:
Thomson
Wilks Inc.
Cape
Town
Ref:
mat17636
Email:
Ellen@thomsonwilks.co.za
c/o
Thomas Wilks Inc.
Pietermaritzburg
COUNSEL
FOR DEFENDANTS:
A
POTGIETER SC
Instructed
by:
Shepstone
& Wylie attorneys
Richards
Bay
Ref:
BCM/apk/TUZI131894.24
Email:
woodley@wylie.co.za
c/o
Shepstone & Wylie
Pietermaritzburg
Ref:
JTM/mm/
Email:
jmanuel@wylie.co.za