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[2022] ZAECELLC 1
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Business Connection (Pty) Ltd v Buffalo City Metropolitan Municipality (EL 1269/2020) [2022] ZAECELLC 1 (25 January 2022)
IN
THE HIGH COURT OF SOUTH AFRICA
(EASTERN
CAPE LOCAL DIVISION, EAST LONDON)
CASE
NO. EL 1269/2020
In
the matter between:
BUSINESS
CONNECTION (PTY) LTD
Plaintiff/Respondent
and
BUFFALO
CITY METROPOLITAN MUNICIPALITY
Defendant/Excipient
JUDGMENT
GQAMANA
J:
[1]
For convenience, parties shall be referred to as cited in the main
action. The plaintiff,
Business Connection (Pty) Ltd, caused summons
to be issued against the defendant, Buffalo City Metropolitan
Municipality, for payment
of its invoices in the sum of R15 864
539.80. History aside for the moment, the case pleaded by the
plaintiff in the amended particulars
of claim is that:
[1]
1.1 on
or about 16 April 2016, alternatively 21 October 2016, the parties
concluded a written Financial Information
Management System Master
Agreement (“the first Master Agreement”).
[2]
The terms of the first Master Agreement are reproduced at paragraphs
5.1 to 6.7 of the amended particulars of claim.
1.2 on
or about 6 November 2017, the parties further concluded a written
Service Level Agreement (SLA) for the
provisioning of IT software and
services required to upgrade, enhance and support the defendant’s
Solar System and the Municipal
Standard Chart of Accounts (mSCOA).
[3]
The SLA was for the period from 1 March 2018 to 28 February 2019. The
SLA also contained a renewal or extension provision for a
further
period as maybe agreed between the parties. The material terms of the
SLA are also reproduced in the amended particulars
of claim at
paragraphs 8.1 to 8.8.
1.3 on
5 February 2018, a first request was issued by the defendant for
resources in terms of the SLA in order
to assist the defendant in the
mSCO A phase 2 project. The request was for a business analysist, a
data base administrator, two
project administrators and two network
administrators. The plaintiff accepted and executed the first
request. The rates of payment
for such services was based on the
tariffs as stipulated in the SLA.
1.4 on
21 January 2019, the parties concluded another written Master
Agreement (“the second Master Agreement”).
[4]
The terms of the second Master Agreement are also reproduced at
paragraphs 14.1 to 15.4 of the amended particulars of claim.
[5]
1.5 on
24 January 2019, the defendant issued two requests to the plaintiff,
both subject to the Master Service
Agreement and the SLA Schedule
Amendment (“the second request”). The requests were for
the extension of certain resources
whose deployments were due to end
in February 2019. The aforesaid services were those that were
requested in terms of the first
request of 5 February 2018 referred
to in sub-paragraph 1.3 above. The other request was for additional
resources for a period
of 12 months from 1 February 2019 to 31 March
2020. The plaintiff accepted and executed the second request.
1.6 on
or about 31 January 2019, arising from the second request, parties
concluded a written contract schedule
(“the Schedule”).
[6]
The terms of the schedule are reproduced at paragraph 20.1 to 20.3 of
the amended particulars of claim.
1.7 the
plaintiff complied with its obligations in terms of the first request
and the second request which were
issued in terms of the SLA and has
invoiced the defendant for the services rendered, however the
defendant failed to make payment.
It is accordingly contended that
the defendant is indebted to the plaintiff in the amount of R15 864
539. 80.
[3]
The defendant delivered a notice in terms of rule 23(1)(a) of the
Uniform Rules of
Court. The plaintiff did not remove the cause of
complaint, instead it filed its amended particulars of claim.
[4]
In response to the plaintiff’s amended particulars of claim,
the defendant delivered
a notice of exception on 24 June 2021. The
defendant’s exception is based on the grounds that the amended
particulars of
claim lacks averments which are necessary to sustained
a cause of action. The defendant’s complaints are that:
“
1.
i
n paragraph 9 to 12 of the amended particulars of claim the
plaintiff in effect pleads the existence of a contract between the
parties,
but has failed to comply with the peremptory provisions of
rule 18(6) of the Uniform Rules of Court which require a party who
relies
upon a contract in its pleading to state whether the contract
is written or oral and when, where and by whom it was concluded, and
if the contract is written, to annex a true copy thereof or the part
relied upon in the pleading;
2.
in paragraphs 16 and 17 of the amended particulars of claim the
plaintiff in effect pleads
the existence of two contracts between the
parties but, in respect of the first contract it has failed to comply
with the peremptory
provisions of rule 18(6) of the Uniform Rules of
Court…
”
[5]
The issue now before me is solely whether the exception are to be
upheld or dismissed
with costs.
[6]
As a point of departure, the object of a summons is to inform the
defendant of the
nature of the claim it is required to meet and the
cause of action must be disclosed in the particulars of claim.
[7]
A cause of action must appear from the factual averments made in the
particulars of claim. In
Mckenzie
v Farmers Cooperatives Meat Industries Ltd,
[8]
the court defined “cause of action” as follows:
“…
every
fact which it would be necessary for the plaintiff to prove, if
traversed in order to support his right to judgment of the
court. It
does not comprised every piece of evidence which is necessary to
prove each fact, but every fact which is necessary to
be proved.
”
[7]
An excipient in order to succeed in its exception must persuade the
court that, upon
every interpretation which the plaintiff’s
particulars of claim can reasonably bear, no cause of action is
disclosed, otherwise
failing that, the exception must not be
upheld.
[9]
[8]
An exception must be considered on the particulars of claim as it
stands, without
taking any facts other than those stated there into
account, assuming that all the allegations contained therein are true
and assess
whether it discloses a cause of action.
[10]
[9]
In
Clementz
v Millbo Paper CC and Others,
[11]
the
approach to be adopted was summarised as follows:
“
In the present
instance, I am unable to find on the pleaded facts, which I must
accept as correct and which must be benevolently
interpreted in
favour of the plaintiff, that the plaintiff’s claim is (not may
be) bad in law, that the claim is legally
hopeless or that no
injustice will be done to the exception that the pleadings lack
averments which are necessary to sustain an
action.
”
[10]
For the particulars of claim to disclose a cause of action, a
plaintiff’s must set out
every material fact which it would be
necessary for it to prove in order to support its right to judgment.
Rule 18(6) of the Uniform
Rules of Court requires a party who relies
upon a contract, to state whether the contract was in writing or oral
and when, where
and by whom it was concluded. If a party relies on a
written contract, a true copy thereof or the part relied on in the
pleading
must be annexed to the pleading.
[11]
Furthermore rule 18(4), states that, every pleading must contain a
clear and concise statement
of the material facts upon the pleader
relies for its claim, defence or answer to any pleading, with
sufficient particularity to
enable the opposite party to reply
thereto. In
Trope
v South African Reserve Bank
[12]
it was said:
“
It is of
course, a basic principle that particulars of claim should be so
phrased that a defendant may reasonably and fairly be
required to
plead thereto. This must be seen against the background of the
further requirement that the object of pleadings is
to enable each
side to come to trial prepared to meet the case of the other and not
be taken by surprise. Pleadings must therefore
be lucid and logical
and in a intelligible form; the cause of action or defence must
appear clearly from the factual allegations
made …
”
[12]
If the exception is that the particulars of claim fails to disclose a
cause of action, the test
is whether on all possible reading of the
facts no cause of action is made out.
[13]
[13]
In
Evins
v Shield Insurance Co. Ltd
,
[14]
Trollip
JA
said
that “c
ause
of action
”
i
s
ordinarily used to describe the factual basis, the fact of material
facts, that begets the plaintiff’s legal right of action…”
[14]
In the instant matter both the defendant’s grounds of
exceptions are based on the contention
that, the amended particulars
of claim lacks averments necessary to sustain a cause of action
because of non-compliance with the
peremptory provisions of rule
18(6). The first complaint is directed at paragraphs 9 to 12 of the
amended particulars of claim.
The relevant paragraphs read:
“
9.
On or about 5 February 2018, the defendant issued a request to the
plaintiff for resources in terms of
the SLA “whom (sic) will
assist in the mSCOA phase 2 project” (“the first
request”). A copy of the first
request is attached is annexure
POC3.
10.
The request recorded the defendant’s need for a Business
Analyst, a Database Administrator, two Project
Administrators and two
Network Administrators. In terms of the first request, the resources
would be “linked Solar BCX contact
on a rate based tariffs as
stipulated in the SLA “agreement” to that: [S]uch
resources will be manned within ICT for
8 hours daily and 5 times a
week and such cost would be billable against ICT budget.”
11.
The plaintiff accepted the first request and executed the request by
supplying the defendant with the resources
requested.
12.
The defendant accepted the resources at their respective rates and
accepted the services provided by the supplied
resources
.”
[15]
The second exception is directed at paragraphs 16 and 17 of the
amended particulars of claim.
The relevant portions thereof reads:
“
16.
On or about 24 January 2019, the defendant issued two requests to the
plaintiff “both subject to the Master
Services Agreement and
the Service Level Agreement Schedule Amendment (“the second
request”). A copy of the second
request is attached as “POC
5”.
16.1
The request was for the contract extension of certain resources
already deployed
pursuant to the first request of 5 February 2018
referred to above. The defendant requested the extension of specific
resources
whose deployments were due to end in February 2019. The
defendant requested that their deployment be extended from 1 February
2019
to 31 March 2020.
16.2
The second request was for additional resources for a period of 12
months from
1 February 2019 to 31 March 2020 the stated purpose of
which was “to ensure that BCMM utilised the same local
resources from
the mSCOA phase 1 Project in the Phase 2 Project to
the completion to ensure business continuity and overall compliance.”
To this end the defendant requested that the plaintiff provide …
17.
The plaintiff accepted the second request. The plaintiff accordingly
agreed to extend the term of certain
resources supplied in terms of
the first request read with the SLA and it agreed to supply the
additional resources contemplated
in the second request
.”
[16]
Mr Seape
counsel for the plaintiff, argued correctly so, that
the defendant is constrained to the two grounds of exceptions as set
out in
the notice of exception. The crux of them being that, the
amended particulars of claim fails to disclose a cause of action. He
argued further that the plaintiff has pleaded a series of agreements
namely the SLA, the First and Second Master Agreements and
all such
agreements were attached to the pleadings. Accordingly, the
plaintiff’s pleadings comply with the requirements of
rule 18
(6).
[17]
It was further argued that, the impugned paragraphs (i.e. paragraphs
9-12 and 16-17)) do not
contain allegations that in effect establish
the agreements that the plaintiff’s claim is based upon, but
merely contain
allegations that describe the performance that
entitles the plaintiff to the relief it seeks. In the alternative, it
was argued
that, any shortfall in compliance with- the requirements
of rule 18(6) could be cured by a request for further particulars.
[18]
The exception raised by the defendant goes to the roots of the
plaintiff’s claim. The entire
case pleaded by the plaintiff is
predicated on the first and second requests and the acceptance
thereof.
[19]
The claim pleaded is based on the agreements, namely the SLA, the
First and Second Master Agreements,
read with the requests for
services and acceptance of such requests. At paragraph 9 of the
amended particulars of claim, the case
made up by the plaintiff is
that, on 5 February 2018, the first request was issued by the
defendant for services in terms of the
SLA and such request were
accepted and executed. The first hurdle for the plaintiff in respect
of that claim is that, the SLA only
commenced on 1 March 2018.
[15]
The defendant therefore could not have issued the first request in
terms of the SLA-because the SLA had not come into existence
by then.
Furthermore the specificity pleaded in paragraphs 9 and 10 are also
not set out in the SLA being the agreement the plaintiff
relies upon
as its contractual basis upon which the request was issued by the
defendant.
[20]
The second problem, the plaintiff’s case is that it accepted
the requests and executed
the terms thereof by supplying the required
resources/services and that the defendant accepted the services at
the respective rates.
However, there are no facts as to where, when
and by whom such requests were accepted and executed on behalf of the
plaintiff.
Neither are there any facts pleaded as to where, when and
by whom such services were accepted on behalf of the defendant. These
are facts, which are peremptory in terms of rule 18(6).
[21]
With regard to the complaint about paragraphs 16 and 17 of the
amended particulars of claim,
the case pleaded is that, a second
request was issued by the defendant, accepted and executed upon by
the plaintiff. However, no
facts pleaded as to who made the requests
or about the identities of persons who accepted the requests on
plaintiff’s behalf.
[22]
In summary, the plaintiff entire case is predicated on the
contentions that certain requests
were made, which were accepted and
executed by it and the defendant failed to pay for such services
rendered. Clearly, its claim
is based on contracts or agreements and
the peremptory provisions of rule 18(6) must be complied with in
order for the plaintiff’s
particulars of claim to disclose a
cause of action. In
Mckenzie
(supra), a cause of action is “
every
fact which it would be necessary for the plaintiff to prove, if
traversed, in order to support his right to the judgment of
the court
it does not comprise every piece of evidence which is necessary to
prove each fact, but every fact which necessary to
be proved
.”
Because the plaintiff relies upon contracts for its claims, it must
plead the facts required in rule 18(6). Such facts
and information
are a vital link in the chain of the plaintiff’s cause of
action against the defendant. Absent such facts
and information, the
basis of the plaintiff’s cause of action does not appear on the
face of the pleadings.
[16]
[25]
For the aforegoing reasons, the plaintiff’s’ amended
particulars of claim are excipiable
in that, it lack averments
necessary to sustain a cause of action.
[24]
On the issue of costs,
Mr Seape
argued that the matter was not
complex as to allow for employment of two counsel. In exercising my
discretion and more importantly
having, regard to the limited basis
upon which the defendant’s exception hinges on and the issues,
which were argued before
me, I am not persuaded that the employment
of two counsel was unnecessary.
[25]
In the circumstances, the following order shall be issued:
1.
The defendant’s exception is upheld with costs.
2.
The plaintiff is afforded a period of 15 days from the date of this
order to deliver its
amended particulars of claim.
N
GQAMANA
JUDGE
OF THE HIGH COURT
APPEARANCES:
Counsel
for the Applicant
:
Adv J C Heunis SC with Adv F T Pretorius
Instructed
by
: C/o IC Clark
Attorneys
East London
Counsel
for the Respondent
:
Adv M Seape
Instructed
by
: Clark Laing
Attorneys
East London
Date
heard
: 18 November
2021
Date
judgment delivered
:
25 January 2022
[1]
Index Part III pp 544-558.
[2]
Index Part III pp 559-677, annexure POC 1.
[3]
Index Part III pp 678-690.
[4]
Index Part III pp 692-706.
[5]
Index Part III pp 551-553.
[6]
Index Part III pp 709-711 annexure “POC6”.
[7]
Makgae
v Sentraboer (Kooperatief) Bpk
1981
(4) SA 239
(T) at 244 B – 245C
.
[8]
1922 AD 16
at 23.
[9]
Fairoaks
Investment Holding (Pty) Ltd and Another v Oliver and Others
[2008] ZASCA 41
;
2008 (4) SA 302
(SCA) para [12],
Gallagher
Group Ltd and Another v IO Tech Manufacturing (Pty) Ltd and Others
2014 (2) SA 157
(GNP) para [20].
[10]
Natal
Fresh Produce Growers Association v Agro-serve Pty Ltd
1990 (4) SA 749
(N) at 755,
Two
Oceans Aquariums Trust v Kantey and Templar Pty Ltd
2006
(3) 138 (SCA) at 143,
Baliso
v Firstrand Bank Ltd t/a Westbank
2017 (1) SA 292
(CC) para [33].
[11]
2021 (4) SA 186
(GJ) para [95].
[12]
1992 (3) SA 208
(T) at 210 G-I.
[13]
Astral
Operations Ltd v Nambitha Distributors Ltd
;
Astral Ltd v
O’Farrell
NO and Others
[2013] 4 All SA 598
KZD para 6
,
Louis v Oneante Pty Ltd and Another
[1992] ZASCA 174
;
1992 (4) SA 811
(A) at 817,
Francis
v Sharp and Others
2004 (3) SA 230
(C) at 237 D–E.
[14]
1980 (2) SA 814
(A) at 825 G.
[15]
Part III p 547 paragraph 8.2 of the amended particulars of claim.
[16]
See
Moosa
and Others NNO v Hassam
2010
(2) SA 410
KZP at 413 B-F.