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[2022] ZAECBHC 24
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Orange Flamingo (Pty) Ltd v Member of the Executive Council Responsible for Public Works in the Eastern Cape and Another (909/2019) [2022] ZAECBHC 24 (1 September 2022)
IN THE HIGH COURT OF
SOUTH AFRICA
(EASTERN
CAPE LOCAL DIVISION, BHISHO)
CASE
NO. 909/2019
Reportable:
Yes
In
the matter between:
ORANGE
FLAMINGO (PTY) LTD
Plaintiff / Respondent
and
MEMBER
OF THE EXECUTIVE COUNCIL
RESPONSIBLE
FOR PUBLIC WORKS
IN
THE EASTERN CAPE
1
st
Defendant / Applicant
MEMBER
OF THE EXECUTIVE COUNCIL
RESPONSIBLE
FOR EDUCATION
IN
THE EASTERN CAPE
2
nd
Defendant
APPLICATION
TO INTRODUCE A COUNTER CLAIM
JUDGMENT
ZILWA
J
[1]
In this matter the applicant (first defendant in the action) seeks an
order for, in
the main,
(i)
Condonation of its failure to file its counterclaim timeously in the
action;
(ii)
Leave in terms of Rule 24(1) of the Uniform Rules of Court (the
Rules) to file a counterclaim to the
respondent’s action (as
plaintiff in the action).
[2]
The background to the application is as follows:
2.1 On
9 December 2019 the respondent instituted action proceedings against
the applicant (as first defendant
in the action) and the Eastern Cape
MEC for Education as second defendant. The claim was for payment of
monies which the respondent
claimed to be owed by the defendants in
the action in terms of a contract concluded between the parties on 17
December 2013, whereby
the respondent was appointed by the defendants
as Architects and Principal Agent on their behalf in the construction
of a school
known as Laerskool Grens.
2.2 In
its plea in the action, which was amended 3 times, the applicant
denies owing the respondent any monies
in relation to the project. To
the contrary, it contends that in fact the respondent has been
overpaid by the applicant and it
is the one that owes the applicant
money in respect of such overpayment.
2.3
After all the pleadings, with the necessary amendments, had been
finally closed and all pre-trial procedures
had been finalised the
parties sought and obtained case flow management orders that declared
the matter as trial ready.
2.4
Upon being allocated the latest trial date and prior to the
commencement of the trial, the parties signed
the case flow
management Form 2 dated 2 August 2022 where the applicant indicated
that it would raise, as a point in
limine
at the trial, the
issue of this Court’s jurisdiction to hear the matter. No
indication was given that the applicant was desirous
of filing a
counterclaim in the action until 12 August 2022 when a letter was
addressed by the applicant’s attorneys to the
respondent’s
attorneys, requesting the respondent’s attorneys’
permission / agreement to file a counterclaim
to the respondent’s
action. The alleged basis for the request was that “
on our
consultation today the 12
th
August in
preparation for the trial of the 17 August 2022 we discovered that we
have a counterclaim against your client, (Orange
Flamingo).”
The civil trial action had by then already been set down to proceed
for three days commencing on 17 August 2022. The parties had
estimated the duration of the trial to be three days.
2.5 On
the same date of the receipt of the applicant’s attorney’s
letter referred to above the respondent’s
attorneys responded,
declining the consent sought from them for the filing of the
counterclaim at that late stage, opining that
this was an attempt to
further delay the trial and to engineer a postponement thereof. They
also pointed out that the applicant’s
attorneys had confirmed,
only a week before, that the matter was trial-ready and nothing had
been said about the filing of the
counterclaim.
2.6
After such refusal by the respondent’s camp to the filing of
the proposed counterclaim no further action
was taken by the
applicant in pursuit of the envisaged counterclaim.
2.7 On
the scheduled date of 17 August 2022 the trial in the action
commenced. Mr Jikwana, who appeared as Counsel
for the applicant,
addressed the Court first, challenging the Court’s jurisdiction
to proceed with the action.
2.8 The
challenge was rebuffed by the respondents’ Counsel, Mr Mapoma
SC, who appeared with Mr Mpiti. After
hearing argument from both
sides I dismissed the applicant’s challenge to the Court’s
jurisdiction, finding that on
the facts and the law this Court does
have jurisdiction to proceed with the hearing of the action.
2.9
After such ruling the respondent’s Counsel made the plaintiff’s
opening address. Thereafter he
called the plaintiff’s sole
witness to testify in support of its claim. The witness testified for
two days, finishing his
evidence in chief at about 15h15 on 18 August
2022.
2.10 The parties
and the Court were agreeable that because of the lateness of the hour
the witness’s cross-examination
could not commence on that day
and it would have to stand down for another day.
2.11 At that point
the applicant’s Counsel verbally applied to the Court from the
bar for the applicant to be allowed
to file a counterclaim to the
respondent’s claim. He purported to make that verbal
application in terms of Rule 24(1) of
the Rules. The verbal
application was vehemently opposed by the respondent’s legal
team, pointing out that, in the first
place such application could
not just be made verbally from the bar by applicant’s Counsel
and that it needed to be a substantive
application in writing by way
of a Notice or a Notice of Motion supported by the necessary
affidavits.
2.12 Because of the
lateness of time, the matter was stood down to the following day, 19
August 2022, for the hearing of the
party’s submissions with
regard to the proposed application for leave to file the applicant’s
counterclaim. After hearing
the party’s submissions on 19
August 2022 I upheld the argument that the application of this nature
cannot be moved verbally
by Counsel from the bar and that it had to
be a substantive application in writing, with the respondent being
given an opportunity
to file whatever opposing papers it may wish to
file in resisting the application. By agreement with the parties the
further hearing
of the action was postponed to 29 August 2022.
2.13 Subsequent to
the postponement the applicant launched the present application by
way of the Notice of Motion filed of
record on 22 August 2022,
accompanied by the supporting affidavit.
2.14 On 24 August
2022 the respondent filed its Notice of Opposition to the application
as well as its opposing papers. The
applicant filed its replying
papers on the following day, whereafter both parties filed their
heads of argument in preparation
for the hearing of the opposed
application.
2.15 On the
scheduled date of 29 August 2022 the application was argued by both
parties before me. The main trial in the action
was postponed to a
date to be arranged subsequent to this judgment.
[3]
In the supporting affidavit deposed to by its Senior Legal Admin
Officer, one Mr Dayimani,
the applicant admits engaging the
respondent as alleged. It further contends that after the respondent
had issued some invoices
against the applicant some of such invoices
were paid but in due course the applicant had realised that it had
overpaid the respondent
and refused to pay the subsequent invoices.
After being served with the respondent’s summons in the action
on end December
2019 it had considered the overpayment allegedly made
to the respondent to be due for a refund. The amount of the alleged
overpayment
was finally calculated on 20 August 2021 and a document
depicting same was transmitted to the applicants’ legal team
“
for their consideration and necessary action on 28 August
2021”
. The affidavit states that “
this the
defendant did as it was desirous to file the counterclaim”.
[4]
The affidavit further goes on to state that the failure to file its
counterclaim was
due to a
bona fide
mistake caused by an
oversight on the part of the defendant’s legal team, especially
given that the issue of overpayment
is clearly set out in the
defendant’s amended plea. It is further contended that the
defendant was at all material times
under the impression that the
counterclaim had been filed and it was only during consultation and
preparation for the trial with
the applicants’ new Counsel on
12 August 2022 that it was pointed out that no counterclaim had been
filed. Condonation is
then sought for the late filing of the
counterclaim on the basis that the failure to file it with the plea
was not due to fault
on the part of the applicant.
[5]
It is significant that nowhere in its founding affidavit does the
applicant categorily
state that there was any stage when it had
expressly instructed its legal team to file a counterclaim to the
respondent’s
claim.
[6]
In its opposing papers the respondent contends that no proper case
has been made by
the applicant for the Court to exercise its
discretion in favour of allowing the applicant to deliver its
counterclaim at this
late stage. It argues that there has been no
overpayment to it by the applicant that would justify any
counterclaim and that in
fact the applicant is indebted to it for the
amount claimed in the summons. In its plea and amended pleas the
applicant has falsely
alleged overpayment but the issue of a
counterclaim has never been raised until two days before the trial
date, which stance it
considered as a ruse on the part of the
applicant to delay the trial.
[7]
The respondent further points out that on 17 and 18 August 2022 the
trial commenced
and got underway without the applicant making any
indication to the Court that it intends to bring a counterclaim or
drawing a
substantive application requesting the Court’s leave
to file a counterclaim before the trial got underway and plaintiff
testified
in chief to a finish.
[8]
The respondent further points out in its affidavit that even if there
had in fact
been any overpayment, which is vehemently denied, the
applicant’s contention that it had become aware of such
overpayment
as early as at July 2018, would render its claim for any
repayment for such alleged overpayment to have prescribed in July
2021.
The respondents further contend that the sudden appetite for
the applicant to lodge a counterclaim for an alleged overpayment may
have been sparked off by the plaintiff’s evidence in chief that
no claim has been lodged against it by the applicant for
any
overpayment.
[9]
The respondent further submits that the applicant’s sudden
application to file
a counterclaim after observing and hearing the
plaintiff’s evidence in chief in the trial is irregular and
prejudicial to
it. The respondent finally argued that the applicant
has not met the requirements that would persuade the Court to allow
the delivery
of the proposed counterclaim at this very late stage in
the middle of the trial.
[10]
In its replying affidavit the applicant contends that it was not
aware that its counterclaim
had not been filed much earlier during
the pleading stage. However, to its replying affidavit the applicant
has annexed an email
addressed by its erstwhile Counsel to its
instructing attorneys dated 1 December 2021 where Counsel seeks
instructions with regard
to the counterclaim and enquires whether the
applicant seeks to persist with same and, if so, what is the nature
of the counterclaim
is. She further seeks its quantification.
[11]
On the same day, (1 December 2021) Counsel’s email is forwarded
to the applicant’s
legal advisor that is seized with the
matter, asking for instructions. Another email from applicant’s
Counsel dated 5 December
2021 is addressed by applicant’s then
Counsel to, amongst others, the instructing attorney and the same
applicants’
legal officer (Mr Dayimani). In that email Counsel
points out that she has not received instructions with regard to the
counterclaim.
She repeats that if the applicant still wishes to
pursue same it should be properly quantified, in which event the
Notice to amend
sent with the email for service should not be served.
The email was not responded to by any of the parties to whom it was
sent.
[12]
On 8 December 2021 the applicant’s instructing attorney again
sent another email to Mr
Dayimani, asking him to furnish instructions
as to whether the Department is still pursuing the counterclaim. No
response came
forth from Mr Dayimani with regard to the issue of the
counterclaim. In his replying affidavit Mr Dayimani states that he
was already
on leave by 8 December 2022 and that he never took note
of the email, in which event he would have responded to same. I
assume
that reference to 8 December 2022 was in fact meant to refer
to 8 December 2021, since December 2022 is not yet upon us.
[13]
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 . . .”
[14]
The criteria in an application for relief under Rule 24(1) are that:
(1)
There must be a reasonable and acceptable explanation for the
lateness; and (2) The defendant must show an entitlement to institute
a counterclaim.
[1]
[15]
On the facts of this matter I am not satisfied that any of the
requirements set out above have
been satisfied.
[16]
On its own showing, the applicant became aware of the alleged
overpayment that gave rise to the
contemplated counterclaim way back
before the summons in the action was issued on 10 December 2019.
After the service of the summons
on the applicant on that date the
applicant contends its founding affidavit that “
the
overpayment then became due to be refunded”.
However, for
some unexplained reasons, the applicant pleaded to the summons
without raising the counterclaim. Even after doing its
“
extensive
calculations”
on 20 August 2021, more than 8 months after
the service of the summons on it and after it had quantified the
alleged overpaid amount,
the counterclaim was not brought. As already
stated above, nowhere in any of its affidavits does the applicant
contend to have
actually instructed its legal team to bring the
counterclaim on its behalf. All attempts by the legal team to obtain
specific instructions
from the applicant regarding the alleged
overpayment and counterclaim were never responded to.
[17]
There is no reasonable and acceptable explanation that explains the
lateness in bringing the
counter application or approaching this
Court only at this late stage for leave to file same. The applicant’s
attorneys’
letter of 12 August 2022, contending that it was
only discovered during consultation on that very day that the
applicant has a
counterclaim against the respondent, only serves to
muddy the waters even further for the applicant. It directly
contradicts the
contentions in the applicant’s founding
affidavit.
[18]
In those circumstances the applicant fails at the first post with
regard to the requirements
that it needs to satisfy to qualify for
the relief sought.
[19]
As indicated above, the second requirement is for the applicant to
show an entitlement to institute
the envisaged counterclaim. Despite
the applicant stating in para 15 of its founding affidavit that “as
can be gleaned from
the counterclaim, which is filed herewith, the
plaintiff has shown such entitlement, worth ventilating upon during
the current
trial proceedings in Court”, no copy of the
intended counterclaim was annexed to any of the applicant’s
affidavits.
Upon enquiry, the applicant’s Counsel informed me
that the applicant’s camp had later decided not to annex a copy
of
the counterclaim referred to in the paragraph.
[20]
In the absence of such document it is not possible for this Court to
assess and satisfy itself
of the applicant’s entitlement to
institute a counterclaim. Amongst other things there is a possibility
(I am not putting
it any higher than that) that where the applicant
claims to have known about the alleged overpayment way back in 2018,
its claim
or entitlement to counterclaim may well have prescribed. In
my view that fact has a direct bearing on the applicant’s
requirement
to show an entitlement to institute the proposed
counterclaim at this stage. The applicant contends that it calculated
and quantified
the alleged overpayment that is the foundation for its
intended counterclaim on 20 August 1921. This was before the third
amendment
of its plea, which was only delivered on 26 January 2022,
and the fourth amendment of the plea that was delivered on 25 July
2022.
There is no explanation as to why the counterclaim was not
lodged with any of these amendments.
[21]
It is for those reasons that I am of the view that the applicant has
failed to satisfy any of
the criteria referred to above.
[22]
A further consideration that I consider to be relevant on the facts
of this case is the stage
at which this application in terms of Rule
24(1) has been brought. As shown above,
litis
contestatio
in
this matter was reached and passed way back. Throughout the various
stages of case flow management and other pre-trial proceedings
both
parties had submitted that the case was trial ready, hence it was
allocated a date for hearing. There was nary a beep or a
tweet by the
applicant’s legal team about the filing of a counterclaim. Even
after the applicant’s present Counsel
had taken over the
running of the matter and realised that no counterclaim had even been
brought, despite its necessity, and after
the respondent had refused
consent to its bringing, the application was not piloted. There is
authority to the effect that to allow
the creation and filing of new
pleadings long after the pleadings have been closed would render the
principle of
litis
contestatio
virtually meaningless.
[2]
A
fortiori
in my view where the trial has even started and the plaintiff has
finished giving its evidence in chief.
[23]
In my view at the latest immediately the refusal by the respondent’s
team for the belated
filing of the counterclaim was given the
applicant’s team should have launched the application in terms
of Rule 24(1) before
the trial had actually commenced.
[24]
The Rule merely refers to the Court allowing the counterclaim to be
delivered at a later stage.
The later stage is not defined. Neither I
nor Counsel for the parties could find any authorities dealing with
that aspect. I am
of the view that such later stage cannot go beyond
the commencement of the actual trial. To allow the trial to start and
proceed
on the issues as defined in the pleadings only to change (or
add) horses midstream by allowing a counterclaim at that late stage
would be unfair, unjust and prejudicial to the plaintiff, which would
have shaped its case and evidence on the pleadings as they
stand to
deal with the issues as defined.
[25]
Responding to my enquiry as to why the application was not brought
before the trial started applicant’s
Counsel stated that they
were loath to bring the application at that stage as that would have
inevitably resulted in the postponement
of the matter straight away
to enable them to file the counterclaim, which would re-opened the
pleadings. When I pointed out to
him that the application at this
stage would have a similar effect in that if the order sought is
granted the trial would, of necessity,
have to be paused to enable
the filing of the various consequential pleadings that may follow the
filing of the counterclaim, he
was constrained to concede the point.
[26]
In the result, the application is dismissed with costs.
P
ZILWA
JUDGE
OF THE HIGH COURT
BHISHO
Counsel
for the Applicants: Adv. T
M Jikwana
Instructed
by:
The State Attorneys
17 Cnr Fleet and Station
Streets
Old Spoornet Building
EAST LONDON
Counsel
for the Respondents: Adv. S X Mapoma SC with Adv. L X
Mpiti
Instructed
by:
Makhanya Attorneys
201 Werners’
Building
Argyle Street
EAST LONDON
Date
Heard:
29 August 2022
Judgment
Delivered:
01 September
2022
[1]
See
Lethimvula Healthcare v Private Label Promotion
2012 (3) SA 143
at
146 [8]I.
[2]
See
Shell SA Marketing (Pty) Ltd v Wasserman t/a Wasserman Transport
2009 (5) SA 212.