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2022
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[2022] ZALMPPHC 65
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Small Enterprise Agency (SOC) Limited v Tsoshang Training Center CC and Another (746/2018) [2022] ZALMPPHC 65 (29 November 2022)
IN
THE HIGH COURT OF SOUTH AFRICA,
LIMPOPO
DIVISION, POLOKWANE.
CASE
NO: 746/2018
REPORTABLE:
YES/NO
OF
INTEREST TO THE JUDGES: YES/NO
REVISED.
In
the matter between:
SMALL
ENTERPRISE AGENCY
(SOC)LIMITED
: PLAINTIFF
AND
TSOSHANG
TRAINING CENTER
CC
:
1
ST
DEFENDANT
SELWALENKWE
ANTHOINETTE MESENYA
:2
ND
DEFENDANT
JUDGMENT
This
judgment was handed down electronically by circulation to the
parties’ legal representatives by email. The date and time
for
handing down shall be deemed to be the 29 November 2022.
LITHOLE
AJ:
1.
The Small Enterprise Finance Agency (Soc)
Limited, the plaintiff, has instituted a claim against Tsoshang
Training Centre CC and
Selwalenkwe Anthoinette Masenya, the
defendants, seeking an order for the payment of an amount of R5
236 586,86. The plaintiff
action was preceeded by letter of
demand in which the plaintiff had claimed an amount of R5 395 231,52.
2.
The defendant raised an exception to the
particulars of claim filed.
It
is common cause that the defendant afforded the plaintiff an
opportunity to remove the cause of complaint, which invitation was
not heeded, hence the adjudication of this exception.
Factual
Matrix
3.
The plaintiff is a state owned company with
limited liability with registration number 1995/011258/06, with its
principal place
of business situated at Eco fusion5, Block D,1004
Teak Close. The plaintiff is a registered credit provider in terms of
National
Credit Act No. 34 of 2005 (the Act).
4.
The first defendant is a close corporation
registered in terms of Close Corporation Act 69 of 1984 with the
registration number
2000/075724/23 with its chosen domicilium et
executandi situated at 34 Lottering Street, Bendor Park, Polokwane in
Limpopo province.
5.
Second defendant is an adult female and sole
member of the first defendant, employed as Insurance Adviser at PSG
Wealth and Insure,
at Lephalale.
6.
The plaintiff and the defendant concluded a loan
agreement. The plaintiff lent and advanced to defendant the capital
amount of R4 969 499,24(four
million, nine hundred and
sixty nine thousands four hundred and ninety nine rand twenty four
cents),including the facility fee
.The loan was for period not
exceeding 10 months from the date on which the loan amount or part
thereof was advanced to the first
defendant.
7.
The plaintiff issued summons in January 2018
and served on the defendant. Instead of filing the plea the defendant
raised an exception
thereto to the particulars of claim. The
plaintiff amended its particulars of claim and filed the amended
particulars of claims.
8.
Again instead of pleading to the amended
particulars of claim ,the defendant raised yet another exception to
the amended particulars
of claims which is now the subject issue in
this application.
9.
The exception is in terms of Rule 23(1) of the
Uniform Rules of Court.
10.
Rule 23(1) provides that:
“
where any
pleading is vague and embarrassing or lacks averments which are
necessary to sustain an action or defence, as the case
may be, the
opposing party may, within the period allowed for filing any
subsequent pleading, deliver an exception thereto and
may set it down
for hearing in terms of paragraph (f) of sub-rule (5) of Rule (6)
provided that:
where a party intents
to take an exception that a pleading is vague and embarrassing he
shall within the period allowed as aforesaid
by notice afford his
opponent an opportunity for removing the cause of complaint within 15
days: provided further that the party
accepting shall within 10 days
from the date on which a reply to such notice is received or from the
date on which such reply is
due, deliver his exception.
11.
The trite principle of law is that an exception
is determined solely on the averments as pleaded in the particulars
of claim. The
approach is that, the averments in the particulars of
claim must be construed by the Court as true.No extraneous factors
are permitted
in the determination of the exception.
12.
The defendants have excepted to the particulars
of claim on the basis that they are vague and embarrassing, raising
the following
grounds:
12.1
non-compliance with the Rules relating to
pleadings (rule 18 of the uniform rules)
12.2
applicability of the NCA.
12.3
Non-compliance with Rule 4 (irregular service)
13.
Both parties are
ad
idem
on the legal test for exception.
14.
Before dealing with the grounds of exception
raised by the defendant, I find it important to first deal with the
delay in filing
this exception. The plaintiff amended its particulars
of claim and served the particulars of claim on the 03 May 2018. The
defendant
raised an exception and filed notice in terms of rule 23(1)
on the 19 July 2021. The defendant failed to file plea for two years
after the amended particulars of claims. They were placed under bar.
Instead of filing the application for removal of the bar they
decided
to file the exception and the plaintiff did not raise irregular step
to the exception filed.
15.
The plaintiff only raised it in the heads of
argument that the exception was filed two years after the amended
plea was filed and
they are under bar.
16.
In the strict reading of
Amended Rule 23(1), a party is given 10 days from receipt of the
particulars of claim to serve his rule
23(1)(a) notice. The period
given to the defendant to serve such a notice is the same as the
period given to him to file his notice
of intention to defend. The
exception is therefore an irregular step and can be set aside. The
court refers to
Hill
NO and Another v Brown
(3069/20)
[2020] ZAWCHC 61
(3 July 2020)
,
Roger J states the following: -
“
[11]
The amended rule is unambiguous. In practice, sensible plaintiffs are
unlikely to object to a rule 23(1)(a) notice delivered
a few days
later than the strict limit imposed by the amended rule, but for
present purposes the important point is that the framers
of the rules
plainly did not intend that a defendant should have a leisurely
period to assess whether or not particulars of claim
are vague and
embarrassing. In the circumstances, a defendant can hardly complain
if, after the expiry of the 20-day period allowed
for a plea or
exception, his opponent delivers a notice of bar having the effect of
making the subsequent service of rule 23(1)(a)
notice irregular. In
such a case, a rule 23(1)(a) served after delivery of the notice of
bar would, ex hypothesi, be at least 20
days out of time”.
17.
The court has a discretion
whether or not to set aside an irregular step, and the presence or
absence of prejudice is usually decisive.
In my view, the plaintiff
will clearly be prejudiced if the rule 23(1)(a) notice is allowed to
stand. The defendant, as appears
from his attorney’s heads of
argument, considers that the notice is valid, from which it would
follow that on the defendant’s
view he would be entitled to
file an exception if the plaintiff fails to remove the alleged causes
of complaint.
18.
On a proper construction of
the rules, however, the defendant has not filed a proper response to
the notice of bar and should now
be under bar. If the irregularity of
the rule 23(1)(a) notice is confirmed by this court and the notice
set aside, the parties
will know where they stand. The defendant, if
he wishes to oppose the case, will have to apply in terms of rule 27
to have the
bar lifted and will need to show good cause. Whether or
not the defendant will be able to show good cause is not something on
which
I can form an opinion, because I do not know what facts the
defendant will advance in support of a rule 27 application if it was
to be brought.
19.
The court ultimately have to
deal with exception since it cannot mero motu raise irregular step
when it was not raised by the plaintiff.
20.
In order to establish the basis of this exception
and if this exception is sustainable, each ground should be dealt
with separately.
Analysis
First
ground: non-compliance with the Rules relating to pleadings (Rule 18
of the Uniform Rules).
21.
The defendant contend that the plaintiff is
alleging the breach of loan agreement in that the defendant failed to
make payments
in terms of loan agreement but fails to state the
particulars of the alleged breach of the loan agreement including the
date on
which the breach was committed.further that the amount
claimed in the letter of demand, account statement and certificate of
balance
do not correspond.
22.
The plaintiff contend that the issue was
addressed by filing the amended particulars of claim which were
ignored by the defendant.
This complaint is not speaking to the
particulars of claim as amended.
23.
In
Trope South African
Reserve Bank
1992 (2) SA 208
T at 221 A-E
the Court held that the ultimate test is still whether the pleading
complies with the requirements of Rule 18(4). The hard and
fast rule
relating to Exceptions is further that, in order for an Exception to
succeed, the pleading must be excipiable on each
and every possible
interpretation that can be reasonably attached to it.
24.
A pleading may be vague if it fails to provide
the degree of detail necessary in a particular case properly to
inform the other
party of the case being advanced.The typical
prejudice which justifies an exception is if the allegations in the
particulars of
claim are such that the Defendant is unable to plead
properly. In order to answer this question, the Court is “
obliged
to undertake a quantitative analysis of such embarrassment as the
Excipient can show is caused to him, in his efforts to
plead to the
offending paragraph, by the vagueness complained of”.
25.
The evaluation of prejudice is a factual enquiry,
and is a question of degree.The decision must necessarily be
influenced by the
nature of the allegations, their content, the
nature of the claim and the relationship between the parties. The
defendant in this
matter is not showing that after the amendment the
confusion on the amount claimed in the amended particulars of claim,
letter
of demand and certificate of balance still exist. From the
exception the confusion is based on the particulars of claim and
nothing
is said about the amended particulars of claim.
26.
The onus is on the Excipient to show the
prejudice and must do so within the ambit of the pleadings. In
Nxumalo v First Link Insurance Brokers
(Pty) Ltd
2003 (2) SA (620)
the
Court held as follows: “
The onus is of
course on the excipient to show both vagueness amounting to
embarrassment and to embarrassment .
Trope v
South African Reserve Bank
[1993] ZASCA 54
;
1993 (3) SA 264
(A) at 268F; Quinlan v
McGregor 1960(4)SA383(D)at393E–H.Trope v South African Reserve
Bank and Another and Two Other Cases
1992 (3) SA 208
(T) 23 Picbel
Groep Voorsorgfonds v Somerville, Sable Industries Ltd v Nash and
Others, Mitchell Cotts Pension Fund and Another
v Nedbank Ltd and
Another , Datakor Pension Fund and Others v Wynne-Jones & Company
Employee Benefits Consultants (Pty) Ltd
and Others (2011/16213,
2011/16214, 2011/16215, 2011/16216) [2012] ZAGPJHC 48 (30 March 2012)
27.
In the case of
Inzinger
v Hofmeyer
and
others
(7575/2010)
[2010] ZAGP JHC 104, it was said that:
“
An
exception that a pleading is vague and embarrassing strikes at the
formulation of the cause of action and its legal validity.
It is not
directed at a particular paragraph within a cause of action but at
the cause of action as a whole, which must be demonstrated
to be
vague and embarrassing. As was stated in Jowell v Bramwell-Jones and
Others1998 (1) SA 83(W) at 905 E-H:
“
I
must first ask whether the exception goes to the heart of the claim
and, if so, whether it is embarrassing to the extent that
the
defendant does not know the claim he has to meet”
28.
Vagueness amounting to
embarrassment and embarrassment in turn resulting in the prejudice
must be shown. Vagueness would invariably
be caused by a defect for
incompleteness in the formulation and is therefore not limited to an
absence of the necessary allegations
but also extends to the way in
which it is formulated. An exception will not be allowed, even if it
is vague and embarrassing unless
the excipient will be seriously
prejudiced if compelled to plead to the particulars against which the
objection lies.
29.
The nature and extent of
exceptions based on the ground that a pleading is vague and
embarrassing were duly considered by Mc Creath
J in the matter
of
Trope v
South African Reserve Bank
and
two others and cited with approval by Heher J in the matter of
Jowell
v Bramwell-Jones
the
court referred to the following principles pertaining to exceptions:
“
(a)
Minor blemishes are irrelevant,
(a)
Pleadings must be read as a
whole, no paragraph can be read in isolation;
(b)
A distinction must be drawn
between the facta probanda, or primary factual allegations which
every plaintiff must make, and
the facta probantia, which
are the secondary allegations upon which the plaintiff will rely in
support of his primary
factual allegations. Generally speaking, the
latter are matters for particulars for trial and even then are
limited. For the rest,
they are matters of evidence,
(c)
Only facts need be pleaded,
conclusions of law need not be pleaded,
(d)
Bound up with the last mentioned
consideration is that certain allegations expressly made to carry
with them implied allegation
and the pleading must be so read:…”
Second
ground: applicability of the NCA.
30.
The defendant contend that in the amended particulars of claim the
plaintiff
state that, it is a registered credit provider in terms of
the NCA and that the loan thereunder. It is contended further that
the
plaintiff pleaded that the agreement falls outside the NCA. The
plaintiff explained in a letter that it was an error to state that
the agreement falls under the NCA but did not provide that
explanation in the summons. It submitted by the defendant that it is
not clear whether the loan falls within or outside the NCA.
31.
The defendant places reliance on McKenzie v Farmers ‘Co-
Operative Meat
industries limited where the definition of cause of
action ,adopted from Cook v Gill (L.R,8,c.P.107),was held that “…
every fact which it would be necessary for the plaintiff to prove ,if
traversed, in order to support his right to the judgement
of the
court.It does comprise every piece of evidence which is necessary to
prove each fact, but every fact which is necessary
to be proved.”
32.
The plaintiff pleaded in its amended particulars and in its reply to
rule 23(1)
notice that the provisions of the NCA are not applicable
because the consumer is juristic person with assets value or annual
turnover
exceeding the threshold value determined by the minister in
terms of section 7(1) of the NCA.
33.
Section 9(4) of the NCA provides that if the agreement is of a large
amount
as contemplated in section 9(4) of NCA, notwithstanding, the
asset value or the annual turnover of the consumer, the NCA will not
apply. The large agreement are stipulated in the NCA and
inter
alia
are the following:
33.1 mortgage agreement;
33.2 any credit
transaction except a pawn transaction or credit guarantee, and the
principal debt under that transaction
or guarantee fall at or above
higher of the threshold established in terms of section 7 (1)(b).
34.
The amount involved in this matter is above the
threshold imposed by the Minister under section 7(1)(b) of the Act.
The agreement
in essence constitutes a large agreement. Clarity was
also provided in the amended particulars of claims and in the reply
to section
23 (1) notice. Based on thee above there is no merits on
this complaint.
Third
ground: Non-compliance with rule 4 (irregular service).
35.
The defendant contended that second defendant as
surety chose her domicillium citandi et executandi address for all
notices and
process to be given or served pursuant to the deed of
suretyship. The summons were not served upon the second the defendant
at
the chosen domicillium address.
36.
The plaintiff contend that lack of service as
contemplated in rule 4 does not render the summons vague and
embarrassing. Reliance
is placed on the judgement by Meyer J in
Akshardam Pty Ltd v JSR 108 investment CC [2019] ZAGPJHC were the
court held that :
“
the rules, set
out procedural steps. They do not create substantive law. Insofar as
the substantive law is concerned, the requirement
is that person who
is being sued should receive the notice of the fact that he is being
sued by way of delivery to him of the relevant
document initiating
legal proceeding. If this purpose is achieved, then, albeit not in
terms of the rules, there has been proper
service. In essence the
plaintiff contend that improper service is not what the makes the
pleading exciapiable.In deciding whether
the pleading is vague and
embarrassing, the question o involves deciding whether the pleading
is indeed vague in such a manner
that it is not possible to distil
from it a clear single meaning.”
37.
In Southernpoort Developments
(Pty) Ltd v Transnet LTD the court formulated the test on exceptions
as follows:
“
1.
In order for an exception to succeed, the excipient must establish
that the pleading is excipiable on
every interpretation that can
reasonably be attached to it
2.
A charitable test is used on exception, especially in deciding
whether a cause of action
is established, and the pleader is entitled
to a benevolent interpretation.
3.
The Court should not look at a pleading ‘with a magnifying
glass of too high power.’
4.
The pleadings must be read as a whole; no paragraph can be read in
isolation.
In order to succeed
with an exception, the excipient needs to satisfy the court that it
would be seriously prejudiced in the event
that the exception should
not be upheld.”
38.
An exception that a
pleading is vague, or embarrassing will not be upheld unless the
excipient will be seriously prejudiced. The
excipient has a duty to
persuade the court that the pleading is excipiable on any
interpretation that can be attached to it. An
exception that a
pleading is vague and embarrassing is not directed at a particular
paragraph within a cause of action: it goes
to the whole cause of
action, which must be demonstrated to be vague and embarrassing. Such
an exception strikes at the formulation
of the cause of action and
not its legal validity. An exception that the pleading is vague, and
embarrassing will not be allowed
unless the excipient will be
seriously prejudiced if the offending allegations were not expunged.
The court has to consider as
a test for vagueness whether the
pleading does lack particularity to an extent amounting to vagueness.
Where a statement is vague
it is either meaningless or capable of
more than one meaning. The ultimate test as to whether or not the
exception should be upheld
is whether the excipient is prejudiced.
39.
This court does not
find that the defendant was prejudiced due to the exceptions raised
by the defendant.
Order
1.
The following order is
made:
1.1
The Defendant’s
exception is dismissed;
1.2
The defendant is to pay
the costs including the cost of one counsel
TC
LITHOLE
ACTING
JUDGE
LIMPOPO
DIVISION OF THE HIGH COURT
POLOKWANE
APPEARANCES
On
behalf of the excipient/defendant:
with:
Mr S .M Ndobe
Instructed
by:
Ndobe Inc .Attorneys
On
behalf of the respondent/plaintiff: Adv M Tsele
Instructed
by:
Nandi Bulabula Inc
DATE
OF HEARING
: 18 AUGUST 2022
DATE
OF JUDGMENT
: 29 November 2022