About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Eastern Cape High Court, East London Local Court
SAFLII
>>
Databases
>>
South Africa: Eastern Cape High Court, East London Local Court
>>
2023
>>
[2023] ZAECELLC 15
|
|
Saldosol Investments (Pty) Ltd v Amathole District Municipality (EL705/2021) [2023] ZAECELLC 15 (13 June 2023)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
I
N
THE HIGH COURT OF SOUTH AFRICA
[EAST
LONDON CIRCUIT DIVISION – EAST LONDON]
CASE
NO.: EL 705/2021
In
the matter between:-
SALDOSOL
INVESTMENTS (PTY) LTD
PLAINTIFF
and
AMATHOLE
DISTRICT MUNICIPALITY
DEFENDANT
JUDGMENT
NORMAN
J:
[1]
This is an application for summary judgment. Plaintiff claims payment
of an amount of R8 087 241.74
in respect of arrear rental
and other charges pursuant to a lease agreement concluded between it
and the defendant together with
interest thereon and legal costs.
Common
cause facts
[2]
It is common cause that the parties entered into a written lease
agreement concluded on 1 August
2014 in respect of an immovable
property, known as P[…] […] W[…] O[…]
P[…], P[…] F[…]
Road, Chilselhurst, East London
for a period of three (3) years commencing on 1 November 2014. On 1
November 2014 the parties concluded
a written addendum to the lease
agreement which related to further tenant installation items and to
provide the defendant with
hygiene services. They further entered
into a second addendum to the lease which was concluded on 15
December 2014 extending the
lease for a period of two (2) years to
December 2017 with plaintiff undertaking to attend to further tenant
installations as referred
to in the second addendum.
[3]
On 24 August 2016, the parties concluded a third addendum to the
lease agreement where the plaintiff
undertook to attend to further
tenant installations. The parties agreed that the further tenant
installations and services referred
to in the first to third
addenda
would be amortized over the lease period.
[4]
On 8 February 2018 the parties concluded a written renewal of the
lease agreement where they agreed
to renew the lease for a further
period of three (3) years with an option to renew for a further two
(2) years.
Alleged
breach
[5]
Plaintiff alleges that the defendant breached the lease agreement in
that it failed to make payments
of the monthly rentals and other
charges as and when they fell due. It alleged that as of 4 June 2021
the defendant was in arrears
in the amount of R4 782 838.30
in respect of outstanding rental and other charges. It also claimed
an amount of R3 304 403.50 in respect of accumulated
interest. The total sum allegedly owed is R8 807 241.74.
Plaintiff relies on a statement attached to its particulars of claim,
marked “POC6”.
[6]
Defendant defended the action and it
raised two
special pleas. The first one is based on the plaintiff’s
failure to comply with the provisions of section 3 and 4 of the
Institution
of Legal Proceedings against Certain Organs of State Act
40 of 2002 (the Institution Act). The defendant contended that
without
compliance with the provisions of this Act, the plaintiff is
non-suited.
[7]
The second special plea raised is that of prescription. The defendant
contends that the entries
made in “POC6” were made in
December 2014 and that summons was only served on 10 June 2021 and
therefore a period of
more than three (3) years had lapsed. It
contended that any amount that would have been payable more than
three (3) years before
service of the summons, had prescribed.
Plaintiff’s
replication
[8]
In respect of the prescription point, the plaintiff replicated on the
basis that prescription
of the debt claimed from defendant was
interrupted in terms of section 14 of the Prescription Act 68 of 1969
in that the defendant
acknowledged indebtedness of its liability
before the debt became prescribed.
[9]
In so far as the non-compliance with sections 3 and 4 of the
Institution Act, plaintiff contends
that the claim is for specific
performance arising out of the defendant’s breach of contract
and not for a debt as defined
in the Institution Act (for payment of
damages). It further contends that there was no obligation on the
plaintiff to comply with
the aforesaid provisions of the Institution
Act or to allege compliance therewith.
Summary
judgment application
[10]
In the application for summary judgment, deposed to by the director
of the plaintiff,
Jean Prieur du Plessis,
plaintiff addressed the defences
raised by the defendant. It
contends that the defence that there was no demand for interest is
meritless. Plaintiff makes a point
that “
I am advised that
it is the function of the Court to interpret the relevant provisions
of the lease and not that of the parties.”
However, it
proceeded to give an interpretation to certain clauses, namely 4.1
and 4.3. It further contends that interest charged
on arrear rental
was reflected on the monthly invoices and statements issued to the
defendant as reflected on annexure “POC6”.
[11]
In relation to the prescription plea, plaintiff alleged that
the plea is vague because the defendant has
not indicated which
portion of the claim has become prescribed. The defendant never
disputed the statements and invoices issued
to it by the plaintiff
and instead made payments in respect thereof, and by so doing, such
conduct constitutes acknowledgement
of the defendant’s
liability.
[12]
Prescription was interrupted by an express or tacit acknowledgement
of liability by the defendant.
In this regard it relies
on various documentation such as the emails exchanged between the
plaintiff and the Senior Manager: Accounting
Officer of the
defendant, a Mr Sicelo Kweleta, where the defendant expressed an
intention to settle the arrears.
[13]
Plaintiff relied and drew the attention of the
Court to clause 4.2 of the lease in terms of which the plaintiff
has
a discretion to allocate payments made by the defendant. It then
produced an updated statement marked “JP5”.
[14]
Plaintiff disputed the defendant’s defence that no demand was
made because according to it all the
invoices and monthly statements
issued during the subsistence of the lease constituted legitimate
means of demand. It relied on
the letters sent to the defendant on 16
February 2021 and 21 April 2021, as letters of demand.
[15]
It stated that the Institution Act is not applicable in the action
and there was accordingly no obligation to comply
therewith. In the
alternative, it submitted that if it is found that the notice was
necessary then it sought condonation for its
non- compliance with the
Institution Act.
[16]
It concluded by stating that “
the defendant’s
attempted defences alleged in the amended plea, are vague, sketchy
and laconic and demonstrate that the defendant
does not have any bona
fide defence to the plaintiff’s claim nor does it raise any
triable issues in its amended plea.”
Defendant’s
opposing affidavit
[17]
Defendant in resisting the summary judgment application filed an
opposing affidavit deposed to by Thandekile
Themba Mnyimba, its
municipal manager. He raised the following preliminary points:
“
1.
That the plaintiff failed to comply with the
provisions of section 3 and 4 of the Institution of Legal Proceedings
against Organs
of State Act 40 of 2002;
2.
That the claim where it refers to amounts which are more than three
(3) years before the
institution of a claim have become prescribed.
3.
That according to the initial lease agreement it provided that any
other amounts other than
those listed in clauses 4.1.1 to 4.1.3 were
payable on demand. That clauses 4.1.1 to 4.1.3 do not provide for the
payment of interest
and therefore interest is only payable on
demand.”
[18]
Defendant contended that:
(a)
Annexure “POC6” represents account entries
commencing on 1 December 2014, a period of more than three
(3) years
from the date upon which plaintiff’s summons was served on the
defendant. Plaintiff’s claim has prescribed
or alternatively, a
portion thereof has become prescribed in terms of section 11 of the
Prescription Act 86 of 1969.
(b)
Any claim for accumulated interest which is not supported by demand,
which the plaintiff was obliged
to make before any rights thereof
vested, is not payable because plaintiff has not complied with its
obligations.
(c) That
plaintiff has claimed a total sum of R3 304 403.54 for
accumulated interest and it only relied on a demand
made in its
letter dated 21 April 2021.
(d)
The letters that were sent on 16 February 2021 and 21 April 2021, to
the defendant by the plaintiff,
did not comply with the provisions of
sections 3(1) and 4(1) read with sections 4(2) of the Institution
Act. Those letters, he
averred, were not addressed to the municipal
manager as contemplated in the Institution Act.
(e) The
plaintiff’s attempt to seek condonation for its non-compliance
with the provisions of sections 3 and 4
of the Institution Act in the
affidavit for summary judgment, is impermissible.
(f)
Plaintiff, in its particulars of claim, failed to give the exact
dates and months when rentals
were not paid. Plaintiff failed
to indicate precisely when any debt became due and payable. It also
made reference to further
invoices issued but failed to state which
invoices were not paid and in respect of which months those invoices
related to and/
or which rentals were outstanding in respect of which
months.
(g) The
municipal manager submitted that the defendant’s defence to the
claim is
bona fide
. The defendant relied on certain invoices
and a reconciliation of utilities from July 2020 to March 2022 as
annexures “MM1”
to “MM3”.
(h)
The plaintiff invoked the provisions of clause 4.2 of the lease
agreement for the first time in
the summary application whereas that
clause is not pleaded in its particulars of claim.
Plaintiff’s
legal submissions
[19]
Mr Pretorius
appeared
for the plaintiff and
Mr Matotie
for the
defendant.
[20]
It was submitted on behalf of the plaintiff that the defences
raised are not
bona fide
. To the extent that there are
differences in figures, it was argued, this court must simply deduct
what has been paid and
grant summary judgment on the outstanding
amounts.
[21]
It was argued that clause 4.2 is not pleaded in
the particulars of claim because plaintiff does not rely
on it for
the breach. It was simply raised in reaction to the defendant’s
affidavit. It was submitted that plaintiff
is not required to
tabulate the months not paid for because it is impossible to do so
because of the arbitrary payments made by
the defendant. There
are payments that do not co- relate with invoices, however, there is
a running balance that gives the
exact payments made on which dates.
[22]
It was submitted that a creditor is only required
to give notice to an organ of state in respect of a claim
for
damages. In this regard reliance was placed on
Director-
General, Department of Public Works v Kovacs Investments 289 (Pty)
Ltd
[1]
,
for the
submission that:
“
There are
therefore two legs to the enquiry whether a claim is a debt in terms
of the Act. First, it must arise from a contract,
a delict or ‘any
other liability’. Second, it must render the organ of State
liable for damages.”
[2]
[23]
It was submitted that, based on the aforementioned
decision, there was accordingly no obligation to send
the notice
because the Institution Act does not apply to the debt claimed
herein.
[24]
It was argued that the defence raised by the
defendant that it had paid and owe nothing to the plaintiff
should
not be allowed. The onus is on the defendant because it raised
payment as a defence, it was argued. In this regard
reliance was
placed
on,
inter
alia,
Pillay
v Krishna and Another
[3]
.
[25]
Relying on
Eerste
Nasionale Bank van Suidelike Afrika BPK v Vermeulen
[4]
case, plaintiff submitted that it is not disputed that invoices were
continuously issued and payments were continuously made. Each
payment
made interrupted prescription, argued the plaintiff.
[26]
Plaintiff argued that this court does not have to concern
itself with anything prior to 31 May 2017 because the
account of the
defendant was in credit. Plaintiff argued that interest is something
that was agreed between the parties. If payment
was not made on time
parties agreed that there would be a charge.
Defendant’s
legal submissions
[27]
Mr Matotie argued that the defences raised are
bona fide and the court should refuse summary judgment. He
relied on
Tumileng
Trading CC v National Security and Fire (Pty) Ltd
[5]
,
where Binns-Ward J held:
“
A defendant
is not required to show that its defence is likely to prevail. If a
defendant can show that it has a legally cognizable
defence on the
face of it, and that the defence is genuine or
bona
fide
, summary judgment must be refused. The
defendant’s prospects of success are irrelevant”.
[28]
He further submitted that an acknowledgment after a claim had already
prescribed does not interrupt prescription.
In this regard he relied
on
Desai
NO v Desai and Others
[6]
[29]
He submitted that the accumulated interest that is
being claimed was never demanded. The particulars of
claim do not
allege that a demand was made prior to the issuing of the summons.
The correctness of any interest calculated
is placed in dispute
and that is an issue for determination by the trial court.
[30]
It was submitted that if the court has regard to
“MM3”, it would observe that no interest is
claimed on
that invoice. It was further submitted that a comparison of
amounts in “POC6” or “JP5 “with
the amount
contained in the unsigned ‘settlement agreement’ that was
prepared by the plaintiff there was a difference
of (R6 365 350)
which has not been explained. On this basis alone, it is submitted,
the court should refuse summary judgment.
It was further
submitted that the suggestion by the plaintiff in argument that the
court should simply subtract any amounts
in dispute or prescribed
would not assist in overcoming the issues relating to “POC 6”
, which is the bedrock of the
claim.
[31]
Mr Matotie did not argue the non–compliance with the
Institution Act point but did not abandon it either.
In
its opposing affidavit the defendant had submitted that failure to
give notice as envisaged in the Institution Act bars the plaintiff
from continuing with the action. It was also argued that the attempt
to seek condonation for the non- compliance with the Institution
Act
in the application for summary judgment is impermissible.
Discussion
[32]
At the hearing of this matter on 13 April 2023 the
plaintiff’s counsel produced a document marked
annexure “D”.
Annexure “D” reflected a summary for rental, utilities &
other accounts per detailed
ledger as R10 499 028.98 and
for accumulated interest as R 2 751 514.29. In argument
counsel for the plaintiff
submitted that the balance owing was
R5 525 459.49 for the months of March and April for rentals
and interest for those
months being R71 864.97 and R44 009.63,
respectively. In its further supplementary affidavit submitted on 21
April 2023,
plaintiff annexed another annexure “SA3”
which has a total of R5 451 251.07.
[33]
As a result of this annexure the parties were afforded an opportunity
to consider the annexure and make further
submissions in relation
thereto. Plaintiff did so timeously and the defendant submitted an
affidavit on 26 May 2023. Upon
considering both submissions
this court is of the view that nothing turns on those further
submissions.
[34]
Plaintiff contends that invoices were issued and
were not contested. In its additional affidavit it
attached one
invoice that reflected an interest charge in the amount of
R16 799.38, the remaining invoices had no interest
or arrear
amounts reflected thereon.
[35]
In its supporting affidavit
plaintiff stated at para 53:
“
53.
I draw the court’s attention to clause 4.2 of the lease in
terms of which the plaintiff has a discretion to allocate payments
made by the defendant. An updated statement which reflects invoices
issued, interest charged on arrear rental and payment made
by the
defendant after 4 June 2021 is attached hereto marked “JP5”
,the contents of which I verify as correct.”
[36]
Clause 4.2 of the lease agreement provides:
“
4.2
The landlord may appropriate any payment received from or for the
benefit of the tenant in reduction of any
amount payable by the
tenant to the landlord in terms of the contract.”
[37]
In paragraph 3.3 of the particulars of claim
the plaintiff does not rely on 4.2 as it has expressly recorded those
clauses upon
which it relies. This clause is directly relevant to,
inter alia,
how the payments were allocated to the various invoices. There is
merit in the defendant’s complaint that this clause is
not
pleaded. It is relevant for the purposes of adequately defending the
claim to know how the payments were allocated. That should
appear
from the pleadings.
[38]
Clause 4.1.4 provides that the defendant will pay monthly rental in
advance, monthly contributions to property
assessment rates, stamp
duty, contract costs and deposit and at 4.1.4 the parties agreed
that:
“
4.1.4
any other amount on demand”
.
I
t
is for this reason that the defendant contends that any interest
claimed became due and payable only on demand.
[39]
It seems to me that the plaintiff has accorded to itself a right of
reply in the summary judgment application
because it replied to an
opposing affidavit filed by the defendant. This was in relation to
the first application. It contends
that the reconciliation done by
the defendant is irrelevant and is intended to cloud matters because
it covers only a small portion
of a relevant period upon which the
plaintiff’s claim is based.
[40]
In the opposing affidavit deposed to by the
defendant, he contends that the plaintiff has not alleged which exact
months it has
not paid rentals or other charges. The defendant
disputes the correctness of “POC6” and it further
disputes its indebtedness
to the plaintiff. It is crucial in action
proceedings that a party that is being sued must know the case that
it has to meet. The
rentals claimed herein are substantial amounts.
It is not unreasonable to seek the kind of detail that the defendant
is asking
for especially where the claim is supported only by
entries. It may be a cumbersome exercise but it is a necessary one
especially
where the plaintiff on its own has verified its cause of
action by relying on various different amounts.
[41]
Plaintiff bears the onus to prove its claim against the defendant.
The defendant has put up documentation
indicating that, for example,
from July 2020 to March 2022 the only amount due to plaintiff was
R352 376.41. It further annexed
“MM1” reflecting a
reconciliation from July 2020 to March 2022 which showed entries of
various invoices amounting to
R65 012 571.84 and the full amount
was, according to it, paid in full. This reconciliation is in support
of the defendant’s
plea of denial of any monies owing. To that
extent it raises at least a cognizable defence.
[42]
The defendant attached “MM2” which is a copy
of an invoice dated January 2021. That invoice reflected: rental for
office
space, rental for open parking , rental for covered parking
and cleaning removals of the ‘SHE bins’. The total amount
due was R2 901 964.09. That is all. There are no arrear
amounts reflected or interest due and payable. On the invoice
there
is an endorsement that:
“
Rental invoices
payable on the 1
st
of each month and utility invoices payable on receipt. Late payments
will attract
penalties.
Use your account number as reference when making payments. (Banking
details furnished).
Rental
for office space
-
R2 625 595.40
Rental
for open parking bays
-
R146 107.50
Rental
for covered parking bays
-
R126 236.00
Cleaning
remover
-
R4 046.99
All these amounts
included VAT. (my
emphasis
).
[43]
A reconciliation for July 2020 to September 2021 reflects that all
those invoices listed therein were paid
and dates of payment are
reflected on the reconciliation statement. It is also reflected
thereon that the invoices amounted to
R45 540 253.27 and
that the exact same amount was paid. This reconciliation too, because
it incorporates a period after
4 June 2021, (which is pleaded in
paragraph 15 of the particulars of claim), does raise a defence that
may be good in law.
[44]
The defendant disputes the entries in “POC6”,
which is the document upon which the claim is
founded. As it was
found in
Maharaj
v Barclays National Bank Ltd
[7]
by Corbett JA, the defendant has disputed the entries of facts
alleged by the plaintiff. This court has no obligation to determine
whether or not there is a balance of probabilities in favour of one
party or the other. The defendant has fully disclosed the nature
and
grounds of its defense and the material facts upon which its defenses
are based. Those facts appear to constitute a
bona
fide
defence
which is good in law.
Prescription
defence
[45]
The special plea of prescription is a legal defence. Plaintiff
replicated to it. By so doing it created a
lis
between
it and the defendant. It requires a court to determine whether
or not a claim has prescribed. That enquiry is different
from an
enquiry that obtains in a summary judgment application, namely,
whether or not a defence advanced is bona fide.
[46]
It was further submitted by the plaintiff that
the prescription point taken related only to rentals. There is
no merit in
this submission because it goes against what is expressly
and clearly raised by the defendant when it stated:
“
15.3
Subject to what I state hereafter, should the accumulated
interest in the PoC be computed on this basis only, the claim
for any
amounts more than three (3) years before service of the Summons, has
clearly prescribed. “
[47]
It is not within my province at this point to decide whether the
special pleas are going to succeed or not.
The fact that the
plaintiff has conceded that certain amounts prior to 31 May 2017 may
be disregarded by this court is indicative
of the fact that there is
merit in the defenses raised by the defendant.
Institution
notice point
[48]
Plaintiff
advanced legal argument in relation to the Institution Act and argued
that the institution point had been abandoned. There were no
submissions made in relation to this point by the defendant. However,
it was also not abandoned. It is for that reason that I find it
necessary to deal with it since it is one of the special defences
raised.
In attacking the point, plaintiff
relied
on
Director-
General, Department of Public Works v Kovacs
[8]
, where Cassim AJ found:
“
[8] The enquiry does not
stop in para (a) of the definition of ‘debt’ in the Act.
Paragraph (b) of the definition lists,
in addition to the features
mentioned in para (a) , another feature that the contractual,
delictual or other claim must possess:
it must be a claim for which
an organ of State is liable for the payment of damages. There are
therefore two legs to the enquiry
whether a claim is a debt in terms
of the Act. First, it must arise from a contract, a delict or any
other liability’. Second,
it must render the organ of State
liable for damages.”
[49]
In
Mothupi
v Member of the Executive Council, Department of Health Free State
Province
[9]
, Leach JA stated:
“
[12]
But more importantly, the respondent does not allege that it has
suffered any prejudice.
The
object of a provision such as s 3 is to enable the State, a large and
cumbersome organisation, to investigate claims so as to
consider
whether to settle or compromise a claim before costs escalate
unnecessarily, or to properly prepare its defence –
which may
be frustrated if it is unable to investigate relatively soon after
the alleged incident occurred
.
In the present case, however, the identity of the medical
practitioner who administered the spinal anaesthetic which the
appellant
alleges led to her paraplegia, is not only known but an
affidavit from her, in which she disputes any negligence on her part,
has
been filed of record. In these circumstances, the respondent
cannot allege that the underlying purpose of the notice provisions
has not been met or that it has been prejudiced by the lack of
receiving notice.”
(my
emphasis).
[50]
A trial court may find that the notice was
necessary in order to enable the defendant to investigate the
claim
prior to the institution of the action, especially in a matter that
dates as far back as 2014.
Condonation
for non- compliance with the Institution Act
[51]
Plaintiff, as an alternative, purported to seek condonation for its
alleged non-compliance with the Institution
Act. That is not what
summary judgment is intended for. In fact, seeking condonation
demonstrates that the defence raised by the
defendant in this regard
may be sound in law. On this ground alone, and to the extent that the
failure to give notice point is
a good one, the claims against the
defendant cannot be granted summarily without a proper condonation
application brought in terms
of the Institution Act. That is a
process that falls outside the summary judgment application.
[52]
Importantly, the condonation sought cannot be
granted in these proceedings because the defendant has pleaded
prescription of the claim or a portion thereof. A court when granting
condonation must satisfy itself, amongst others, that the
debt
forming the subject matter of the action has not been extinguished by
prescription as envisaged in section 3(4)(b) of the
Institution Act.
The prescription point raised by the defendant relates to both the
amount of rentals claimed plus interest claimed.
Defendant also
contends that the interest claimed was not alleged and is not readily
ascertainable. That is no small issue that
can simply be ignored as
it constitutes a dispute between the parties which is worth taking to
trial. Most importantly I am not
persuaded that these defences were
raised as a tactical strategy to delay the claim.
[53]
It is not the function of this Court when entertaining the summary
judgment, to trawl through several pages
of disputed entries and
decide whether or not the defences raised are valid based on those
entries. That is the work of the trial
court where such entries will
be supported by evidence and the veracity thereof will be tested.
Acknowledgement
of liability
[54]
Plaintiff relies on,
inter
alia,
the
decision in
Investec
Bank Ltd v Erf 436 Elandspoort (Pty) Ltd & Others
[10]
for its contention that each payment made was an express or tacit
acknowledgment of liability. I am of the view that the facts
in the
Investec
case are distinguishable from the facts of this case. In
Investec
,
the facts as summarized by the Supreme Court of Appeal were: There
was a loan made by a company Erf 436 which was secured by the
passing
of a notarial mortgage bond over a 50 year- long notarial lease in
respect of a commercial property concluded by Erf 436
as lessee and
the South African Rail Commuter Corporate (SARCC) as lessor. Erf 436
defaulted about two and a half years later.
The lease was cancelled
by an order of court. That rendered
Investec’s
security worthless.
Investec
then
demanded payment of the loan from Erf 436 following its default.
Investec
exercised
its option and concluded a lease with the SARCC. The terms of the
agreement between
Investec
and Erf
436 were that Erf 436 would continue to manage the property and
collect rentals from subtenants. Those amounts were credited
to Erf
436’s loan account with
Investec.
That
arrangement remained up to a certain point. The parties further
agreed to make efforts to sell
Investec’s
rights in terms of the lease with a view to have the purchase price
being used to settle Erf 436’s loan obligations.
[55]
There was another agreement between
Investec
and Erf 436
wherein
Investec
took over the function from Erf 436 of
managing the property and collecting rentals from subtenants. The
income collected by
Investec
was also allocated to the payment
of the Erf 436’s loan. Later
Investec
sold its rights to
Johnny
Prop
(Pty) Ltd. After the sale a certain amount was credited to Erf 436’s
loan account.
Investec
claimed the balance of the loan from
Erf 436, whereupon Erf 436 raised the plea of prescription. In
replication to the plea,
Investec,
pleaded that on the basis
of the payments made to reduce Erf 436’s loan and various
statements made in letters on behalf of
Erf 436 it made a series of
acknowledgements of liability.
[56]
Plasket JA, in the
Investec
case emphasized that the context
in which the payments were made is relevant. In paragraphs 41 and 43
of the judgment, that context
is clear and that was:
“
That context
was an agreement between Investec and Erf 436 that Investec would
collect rentals from subtenants and credit Erf 436
with the net
amount so collected every month and that when Investec’s rights
were sold the purchase price would likewise
be credited to Erf 436’s
account. The basis for the acknowledgment of liability in respect of
each of those payments does
not rest on agency, but on the agreements
entered into by the parties as to how the loan would be repaid.’
[57]
In the
Investec
matter evidence was led at the trial which
enabled the court to consider the context in which the payments were
made which facts
were largely not in dispute. That is not what
obtains in the case at hand, prescription is raised and the plaintiff
replicated
to it, the parties attached letters and correspondence.
Such letters and correspondence viewed in isolation may not bring
about
the context which would enable this court to reject or accept
the prescription plea in the summary judgment application.
[58]
Plaintiff also relies on acknowledgment of debt at,
inter alia,
a
meeting that was held between the plaintiffs, defendant and national
treasury on 14 May 2021. It contends that such acknowledgement
interrupted prescription. Plaintiff submits that the defendant
acknowledged its indebtedness to it at that meeting. The defendant,
on the other hand, submits that the meeting was to convey to the
defendant’s largest service providers and creditors, the
mandatory financial recovery plan that was being developed by the
National Treasury’s Municipal Recoveries Systems Team,
for the
defendant and not to make any admissions of liability. Each of the
parties attributes a different purpose and outcome to
that meeting.
That can only be resolved at trial through
viva voce
evidence
and not by way of summary judgment. I find that the determination of
whether or not there was an acknowledgment of liability,
constitutes
a triable issue.
[59]
In
Pentz
v Government of the Republic of South Africa
[11]
the Court found that for an acknowledgment of liability to interrupt
prescription it must be given by a debtor to a creditor or
the
creditor’s agent. In that case it was found that the policeman
was not the agent of the government department concerned.
The
plaintiff bears the onus to prove that the payments made by the
defendant constituted an acknowledgment of liability by the
defendant
for prescription to be interrupted
[12]
.
[60]
Plaintiff, in argument, suggested that the
court must disallow the amounts that have prescribed and grant
summary judgment in respect
of those that have not prescribed. This
submission loses sight of the fact that the plaintiff in its
replication to prescription
disputed that any of the claimed amounts
have prescribed. The other difficulty with this submission is that it
focuses on the rental
amounts only when the defendant had raised
prescription in relation to interest as well. The entries relied upon
by the plaintiff
are disputed and the defendant has placed facts upon
which the disputes are based.
[61]
Prescription in respect of all the above decided cases is a legal
issue that was decided by the trial courts and not through
summary
judgment proceedings. The fact that the defendant raised prescription
of the claim and interest or a portion thereof, for
example, cannot
be ignored or regarded as a delaying tactic, in the circumstances of
this case.
Test
in summary judgment applications
[62]
Erasmus, Superior Court Practice
, comments
as follows when dealing with Rule 32:
“
Summary
judgment was a procedure introduced in England, in the second half of
the last century, to assist a plaintiff in a case
where a defendant,
who cannot set up a bona fide defence or raise against the
plaintiff’s case an issue which ought to be
tried, enters
appearance merely in order to delay the granting of the plaintiff’s
rights. (footnotes omitted).
[63]
The test to be applied is that, a court faced with
a summary judgment application is not
[13]
,charged
with determining the substantive merit of a defence, nor with
determining its prospects of success. It is concerned only
with an
assessment of whether the pleaded defence is genuinely advanced, as
opposed to a sham put up for purposes of obtaining
delay. A court
engaged in that exercise is not going to be willing to become
involved in determining disputes of fact on the merits
of the
principal case.
[64]
In
Tumileng
Trading CC v National Security and Fire (Pty) Ltd
[14]
Justice Binns-Ward stated:
“
A defendant is
not required to show that its defence is likely to prevail. If a
defendant can show that it has a legally cognisable
defence on the
face of it, and that the defence is genuine or bona fide, summary
judgment must be refused. The defendant’s
prospects of success
are irrelevant.”
[65]
Binns-Ward J cautioned against what has happened in this case where
the plaintiff has submitted several documentations
in support of the
summary judgment application. The plaintiff’s additional
affidavit dated 30 March 2023 consisted of several
photographs, that
depict toilets, basins and lights. The pages consisting of those
photographs attached to the additional affidavit
amounted to
approximately fifty pages. These photographs burdened the summary
judgment application unnecessarily.
[66]
Lastly, plaintiff relied on
Pillay
v Krishna & Another
[15]
for its contention that once the defendant alleged that it had paid,
it bears the onus. That is correct but in the context of the
Pillay
matter,
such onus had to be established through evidence that had to be led.
The fact that a defendant says that it has made a payment
does not on
its own justify that the matter must be summarily dealt with, without
it going to trial. Even in the
Pillay
matter, witnesses were led and that is how in the end the court
decided whether or not the party who bore the onus discharged it.
[67]
At page 955 of the
Pillay
judgment Davis AJA stated:
“
In other words,
his cause of action is that the defendant obliged himself to pay and
that he has not paid. If the defendant admits
the original obligation
to pay but claims that he has discharged it, the onus still remains
up to the plaintiff to establish his
cause of action. It may well be
that at the trial the defendant will find some difficulty in
rebutting the plaintiff’s denial
on oath that the money has
been paid, but that is a question of the sufficiency of proof, and
not of the onus of proof. If no evidence
is led at all, the plaintiff
must fail because he has not proved his cause of action. Similarly,
if the evidence is led and the
court cannot decide whether the debt
was paid or not the plaintiff again must fail, because one of the
facts essential to his cause
of action remains unproved.”
[68]
The plaintiff also relied for its contention that this Court must
grant summary judgment on,
inter
alia,
Standard
Bank of South Africa Ltd v Oneanate Investments (Pty) Ltd (in
liquidation)
[16]
the
Court dealt with entries made in the bank’s book and
Zulman
JA
at page 821 had this to say:
“
In order to
properly evaluate Oneanate’s contentions it is necessary to
have regard not simply to the entries in the bank’s
books when
the credits were passed to Oneanate’s account on 23 May 1988
and to the reversal of that credit by way of a debit
on 01 July 1988
but also to the entire matrix of facts against which such entries
came to be made. In addition regard needs to
be heard to Oneanate’s
plea of payment and to certain admissions made by Oneanate at a
pre-trial conference concerning the
plea.
[69]
At page 823 the Court stated that:
“
Entries on bank
accounts may reflect valid j
uristic
acts but that is not necessarily
so. Whilst in general it may be said that entries in the bank’s
books constitutes prima facie
evidence of the transactions so
recorded, this does not mean that in a particular case one is
precluded, unless say by estoppel,
from looking behind such entries
to discover what the true state of affairs is. So, for example, if a
customer deposit a cheque
into its bank account, the bank would upon
receiving the deposit pass a credit entry to that customer’s
account. If it is
established that the drawer’s signature has
been forged it cannot be suggested that the bank would be precluded
from reversing
the credit entry previously made. So, if a customer
deposits bank notes into its account the bank would similarly pass a
credit
entry in respect thereof. If it subsequently transpires that
the bank notes were forgeries, it can again not be successfully
contended
that the bank would be precluded from reversing the credit
entry.
[70]
For all the reasons given above, I am satisfied
that the defenses that have been raised by the defendant
are
bona
fide
and do raise triable issues that warrant ventilation before
a trial court. It follows that summary judgment should be refused.
On
the issue of costs I am of the view that costs should follow the
result.
[71]
I accordingly make the following Order:
1.
Summary judgment is refused.
2.
Defendant is granted leave to defend the action.
3.
Plaintiff is ordered to pay costs of the summary judgment
application.
T.V
NORMAN
JUDGE
OF THE HIGH COURT
Matter
Heard on: 13 April 2023
Judgment
Delivered on: 13 June 2023
APPEARANCES:
FOR
THE PLAINTIFF:
ADV.
J. PRETORIUS
Instructed
by:
FOURIE
VAN PLETZEN INC.
REF:
F Van Pletzen/MAT6976
TEL:
011 678 2950
EMAIL:
fourie@fvpinc.co.za
c/o:
GRAVETT SCHOEMAN INC.
THE
HUB, BONZA BAY ROAD
BEACON
BAY
EAST
LONDON
FOR
THE DEFENDANT:
ADV.
MATOTIE
Instructed
by:
Y.
TSIPA ATTORNEYS
NO.
16A KILIMANJARO BUILDING
KING
STREET
BUTTERWORTH
REF:
A51/CL/2023
TEL:
072 784 4430
EMAIL:
dazanatsipa@gmail.com
c/o:
MT KLAAS ATTORNEYS INC.
45
STEWARD DRIVE
BEYSVILLE
EAST
LONDON
EMAIL:
klaasattorneys@telkomsa.net
[1]
2010
(6) SA 646
(GNP); See also:
Thabani
Zulu & Co ( Pty ) Ltd v Minister of Water Affairs and Another
2012 (4) SA 91
( KZD) ;
Nicor
IT Consulting ( Pty ) Ltd v North West Housing Corporation
2010 (3) SA 90
( NMW) paras [12] – [14], [27],[33]and [34].
[2]
Kovacs,
supra, para [8] at 648 E-F.
[3]
1946
AD 946.
[4]
1997 (1) SA 498
(OFS) @ 503 G-1.
[5]
2020 (6) SA 624
(WCC) at para 13.
[6]
[1995] ZASCA 113
;
1996 (1) SA 141
(A) at 147 G.
[7]
1976 (1) SA 418
at 426 (a) – (e).
[8]
2010 (6) SA 646
GNP para 8.
[9]
(20598/2014)
[2016] ZASCA 27
(22 March 2016) at para [12].
[10]
2021 (1) SA 28 (SCA).
[11]
1983 (3) SA 584 (A).
[12]
See
Frost
Consolidated Lease Incorporation (Pty) Ltd v Service SA (Pty) Ltd &
Another
1981 (4) SA 380
(W) at 383 (f) – 384 (e).
[13]
Tumileng
judgment para 23.
[14]
2020 (6) SA 624
(WCC) at para 13.
[15]
1946 AD 946.
[16]
[1997] ZASCA 94
;
1998 (1) SA 811
SCA.