Asa Metals (Pty) Ltd (in business rescue) v Vardocap (5031/2018) [2021] ZALMPPHC 72 (19 October 2021)

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[2021] ZALMPPHC 72
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Asa Metals (Pty) Ltd (in business rescue) v Vardocap (5031/2018) [2021] ZALMPPHC 72 (19 October 2021)

REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
LIMPOPO
DIVISION, POLOKWANE
CASE NO:
5031/2018
In
the matter between:
ASA METALS (PTY)
LTD (IN BUSINESS RESCUE
PLAINTIFF
And
VARDOCAP
DEFENDANT
JUDGEMENT
KGANYAGO J
[1]
The plaintiff had initially launched a liquidation application
against the defendant. The matter
came before me in the opposed
motion wherein I dismissed the plaintiff’s liquidation application
on the basis that there was a
material dispute of fact in which the
matter could not have been decided on papers. The plaintiff proceeded
to issue summons against
the defendant. On receipt of the summons,
the defendant entered an appearance to defend. On receipt of the
defendant’s appearance
to defend, the plaintiff applied for summary
judgment against the defendant. The court refused the plaintiff’s
summary judgment
application and the defendant was granted leave to
defend the plaintiff’s action.
[2]
The defendant filed a Rule 23(1) notice against the plaintiff’s
particulars of claim on the basis
that they are vague and
embarrassing, alternatively renders the pleading not to sustain a
cause of action. The plaintiff proceeded
to amend its particulars of
claim, and thereafter the defendant filed it plea and counterclaim.
The plaintiff thereafter filed a
Rule 23 and 30 notice in terms of
which the plaintiff notified the defendant that it intends to make an
application to have the defendant’s
plea and counterclaim set aside
in accordance with Rule 30, on the grounds that it constitute an
irregular step, in that the defendant
has not complied with the
provisions of Rule 18(4), 18(6) and 18(10) of the Uniform Rules of
Court. In the alternative the plaintiff
was excepting to the
defendant’s plea and counterclaim in accordance with the provisions
of Rule 23 on the grounds that the allegations
contained in the
defendant’s plea and counterclaim failed to disclose a defence
and/or cause of action, alternatively, are vague
and embarrassing.
[3]
The defendant in reply to the plaintiff’s Rule 30 notice stated
that the plaintiff’s Rule 30
notice was filed out of the prescribed
time period as provided for in terms of Rule 30(2)(b). With regard to
the plaintiff’s notice
of exception, the defendant gave the
plaintiff its notice of intention to amend its plea and counterclaim.
The plaintiff filed an
objection to the defendant’s intention to
amend on the basis that the intended amendment do not remove the
causes of complaint
and thus the plea and counterclaim remain
excipiable and should be set aside.
[4]
The plaintiff in its amended particulars of claim has stated that on
or about 9
th
December 2016 and at Mokopane the plaintiff
and defendant, both duly represented, concluded a partly written,
partly oral agreement
in terms of which the plaintiff sold sasol
green pitch coke to the defendant for R840 000.00 excluding VAT. It
is common cause that
the defendant never signed the written
agreement. The plaintiff in its particulars of claim has further
stated that the defendant,
had agreed that no warranties or
representations have been given or made as to the state, condition or
fitness of the sasol green
pitch coke which it takes with all faults
and agrees to accept all risks of whatsoever nature.
[5]
The defendant in its plea admitted that on or about December 2016,
and at Mokopane, the parties
entered into an oral agreement in regard
to the defendant purchasing sasol green pitch coke from plaintiff in
accordance with the
sale agreement attached to the plaintiff’s
particulars of claim. The defendant further pleaded that plaintiff
through its representatives,
indicated that they have done prior
testing on the product, and that it would fit within the defendant’s
required parameters, as
further agreed, to the extent that it should
contain phosphate levels of 0,001 and sulphur of around 0,2 with high
carbon and low
ash as per specifications provided by plaintiff to
defendant at the time. The defendant has also filed a counterclaim
for damages
it allegedly suffered as a result of the plaintiff’s
alleged material non-performance.
[6]
In its exception to the defendant’s plea, the plaintiff has stated
that the defendant in its plea
relies on certain representations made
by the plaintiff’s representatives at the time of the conclusion of
the agreement which
are prior to testing done on the products; the
fit of the product within the defendant’s parameters as further
agreed; and the
extent of the phosphate, sulphur and carbon levels
within the product. According to the plaintiff, the representations
alleged by
the defendant in its plea are in direct conflict with the
admitted written part of the agreement. Further that the defendant
had
pleaded an oral agreement without pleading in accordance with
Rule 18(6) by stating when the agreement was concluded, and who
represented
each party. Further that the oral agreement and
conclusions pleaded by the defendant amounts to a variation of the
written part of
the agreement. Further that the allegation that the
product as rendered by plaintiff was defective in terms of the
initial agreement
is in conflict with the admitted written part of
the agreement.
[7]
With regard to the defendant’s counterclaim, the plaintiff in its
exception has stated that ad
paragraph 1 does not comply with Rule
18(6), and it is also unclear as to which terms the defendant relies
on in reconvention. Further
that the averments made by the defendant
in its counterclaim are inconsistent with the admitted part of the
agreement, and also do
not contain the requisite particularity as
required in terms of Rule 18(6).
[8]
In response to the plaintiff’s notice of exception, the defendant
filed its notice of intention
to amend its plea and counterclaim. The
defendant pleaded further that sasol green pitch coke as described in
the written agreement
pleaded by the plaintiff is a material that
should have phosphate levels of 0.001, sulphur content of around 0.2,
with high carbon
and low ash. Further that the plaintiff failed to
deliver material to the defendant that meet the requirements, as
stated, of sasol
green pitch coke and the performance by plaintiff
was thus materially defective.
[9]
The defendant also substituted paragraph 8.7 of its plea by stating
that at the time of delivery
of material on or about February 2017,
the defendant through its authorised representative, Mr Piere Peens,
orally agreed with Mr
Gerhard Terblanche, duly authorised to act on
behalf of plaintiff, alternatively purporting to be so duly
authorised, that payment
will be held back and conditional upon and
until customers are satisfied with the tests and the defendant had
ensured that the material
provided by the plaintiff can be used in
future, alternatively qualifies as ‘sasol green coke’. The
defendant further stated
that this was after it was established that
the phosphate levels were more than the specification, alternatively
higher than that
expected of sasol green pitch coke. It is also on
this conditional basis that delivery of the material from plaintiff
was accepted.
That it was also apparent that plaintiff wanted to get
rid of the product at all cost.
[10]
With regard to the counterclaim, the defendant substituted paragraph
5 of its counterclaim by stating
that it was within the contemplation
of the parties at the time of the conclusion of the initial
agreement, alternatively the oral
agreement, all pleaded above, that
defendant would suffer certain consequential damages in the event
that the material delivered
was materially defective. The defendant
also inserted a paragraph making a breakdown of the alleged damages
it had suffered as result
of Samancor, the defendant’s client
rejecting 2500 tons which were materially defective in that it did
not qualify as sasol green
pitch coke, even though it took the
defendant six weeks to produce that at its factory.
[11]
On receipt of the defendant’s notice of intention to amend, the
plaintiff filed its objection to the
defendant’s notice of
intention to amend. The grounds of objection are that the defendant’s
intended amendment do not remove
the cause of complaint and that the
plea remained excipiable; that the defendant’s intended amendment
in its plea amounts to an
oral agreement, and that such oral
agreement remains precluded by the admitted part of the agreement,
and as such does not remove
the cause of complaint, and the plea
remains excipiable. Further that the defendant’s responses do not
address the complaint that
the plea is in conflict with the admitted
written part of the agreement, and as such does not remove the cause
of complaint and the
plea remains excipiable.
[12]   The
defendant on receipt of the plaintiff’s objection has filed a
substantive application for leave to amend and
that the plaintiff’s
exception be dismissed. The plaintiff is opposing the defendant’s
application for leave to amend. Both the
exception and application
for leave to amend were agued simultaneously. The parties agreed that
the exception should be dealt with
first, and that if the exception
is not upheld, the amendment will be granted.
[13]
An exception that a pleading is vague and embarrassing strikes at the
formulation of the cause of action and
not its legal validity. (See
Trope
and Others v South African Reserve Bank
[1]
).
The court cannot uphold an exception on the ground that it is vague
and embarrassing and set aside the summons unless the exception
goes
to the root of the action. (See
SA
Motor Industry
Association
v SA Bank of Athens
[2]
).
In order to succeed, an excipient has a duty to persuade the court
that upon every interpretation which the pleading in question
can
reasonably bear, no cause of action is disclosed, failing which the
exception ought not to be upheld.
[14]
Rule 18(4) of the Rules read as follows:
“
Every
pleading shall contain a clear and concise statement of the facts
upon which the pleader relies for his claim, defence or answer
to any
pleading, as the case may be, with sufficient particularity to enable
the opposite party to reply thereto.”
[15]
It is trite that an amendment will not be allowed in circumstances
which will cause the other party such prejudice
which cannot be cured
by a costs order or a postponement. In
Affordable
Medicines Trust v Minister of Health
[3]
Ngcobo J said:
“
The
principles governing the granting or refusal of an amendment have
been set out in a number of cases. There is useful collection
of
these cases and the governing principles in Commercial Union
Assurance Co Ltd v Waymark NO. The practical rule that emerges from
these cases is that amendments will always be allowed unless the
amendment is mala fide (made in bad faith) or unless the amendment
will cause an injustice to the other side which cannot be cured by an
appropriate order for costs, or unless the parties cannot be
put back
for the purposes of justice in the same position as they were when
the pleading which it is sought to amend was filed…The
question in
each case, therefore, is, what do interest of justice demand?”
[16]
A party who raises an exception will be complaining about the defect
in the pleading and notifying the other
party to cure that defect. In
the case at hand the plaintiff had notified the defendant to cure the
defect in its plea and counterclaim.
The defendant filed a notice of
intention to amend in trying to cure the defects the plaintiff is
complaining about. However, it
is the plaintiff’s contention that
the defendant’s intended amendment does not cure the defects it is
complaining about, but
still render its plea and counterclaim
excipiable, and therefore objecting to the intended amendment. I am
called upon to determine
whether the intended amendment is excipiable
and therefore should not be allowed.
[17]
The plaintiff’s first complaint is that the defendant had admitted
the written part of the agreement, whilst
at the same time pleading
certain representation made by the plaintiff at the time of the
conclusion of the agreement. It is the
plaintiff’s contention that
the defendant in pleading “representation” is in direct conflict
with the admitted written part
of the agreement. The defendant in
trying to cure that complaint had substituted certain words like
adding “fraudulently misrepresented”
and “implicitly”.
Further, the defendant added a new paragraph that explains that there
were alleged agreed specifications in
regard to the material to be
delivered by the plaintiff and also qualifying what it had stated in
the preceding paragraphs.
[18]
The plaintiff in its amended particulars of claim had pleaded that
there was a difference in the %P analysis
than what was agreed upon
in terms of the sale agreement, and further that there were email
discussions between the two parties which
ultimately led to the
parties agreeing on a reduced price. The defendant’s intended
amendment sought to address this issue and
put it in more clearer.
The manner in which the defendant sought to address the plaintiff’s
complaint, cannot be said that it renders
its plea excipiable.
[19]
Regarding the second complaint, the plaintiff has stated that the
defendant had pleaded an oral agreement,
but has failed to plead in
accordance with Rule 18(6) in that the defendant has failed to state
when the agreement was concluded
and also who represented the
parties. Further that the defendant had failed to plead that whoever
represented the plaintiff had requisite
authority to conclude such
oral agreement on behalf of plaintiff. The defendant in its intended
amendment had substituted the entire
paragraph and put it in a
clearer perspective. In that new paragraph, the defendant has stated
that the defendant was represented
by its authorised representative
Mr Piere Peens, whilst the plaintiff was duly represented by its
authorised representative Mr Gerhard
Terblanche, alternatively
Terblanche was purporting to be authorised. This in my view,
addresses the plaintiff’s complaint and
cannot be said that it
renders the defendant’s plea excipiable.
[20]
The plaintiff’s third complaint to the defendant’s plea is that
the oral agreement and conclusions pleaded
in defendant’s plea
amounts to variation of the written part of the agreement. The
defendant in its intended amendment has stated
that it did not sign
the written agreement and therefore it is not barred in the manner in
which it had pleaded, and further that
the intended amendment provide
for necessary arrangements per further agreement. The plaintiff in
its amended particulars of claim,
has pleaded that further email
representations were made that culminated into a further agreement.
That further agreement was never
reduced to writing. The plaintiff
itself relies on a partly written and partly oral agreement. Since
the plaintiff is relying on
a partly oral agreement, that opens the
door to the defendant to state the terms of the alleged partly oral
agreement which it feels
that it has been left out by the plaintiff.
As to which is the correct version, will be tested when evidence is
led during trial.
It can therefore not be said that the manner in
which the defendant had pleaded on this issue renders its plea to be
excipiable.
[21]
With regard to the fourth complaint, the plaintiff has stated that
the allegations by the defendant that “the
product as rendered by
the plaintiff was materially defective in terms of the initial
agreement”, whilst the at the same time the
defendant is alleging a
further oral agreement, are in conflict with the admitted terms of
the part of the written agreement. The
plaintiff in its amended
particulars of claim has pleaded that there was a difference in the
%P analysis than what was agreed upon
in terms of the sale agreement.
However, the plaintiff did not state what might have caused the
difference. The defendant alleges
that the plaintiff’s product was
materially defective. What the defendant alleges, comes from the
plaintiff’s pleadings, and
whether that difference was as a result
of a material defect or something else, is an issue that will be
properly ventilated when
evidence is led during trial, and it can
therefore not prejudice the plaintiff.
[22]
With regard to the defendant’s use of the word “further oral
agreement”, from the plaintiff’s pleadings,
it seems more than
one oral agreement was reached. The first oral agreement was
addressing the issue of a difference in the %P, and
the second one
was the discussions about payment. Whether indeed there was more than
one oral agreement, can be cured during trial
when evidence is led,
and that will in no way prejudice the plaintiff.
[23]
Turning to the plaintiff’s complaint that the defendant’s
counterclaim does not comply with the provisions
of Rule 18(6); are
inconsistent with the admitted part of the agreement; and that the
defendant’s averments in its plea does not
comply with Rule 18(10).
The defendant in its intended amendment has given the basis upon
which the plaintiff is allegedly liable
for the damages it allegedly
suffered and also a breakdown of its alleged damages. What the
defendant has stated in its intended
amendment contains clear and
concise statements of facts upon which its claim is been based. All
these will not prejudice the plaintiff
in pleading to the defendant’s
allegations.
[24]
In my view, the defendant’s intended amendment, addresses the
issues raised by the plaintiff in its notice
of exception. It can
therefore, not be said that upon every interpretation of the plea and
counterclaim, no defence and cause of
action has been disclosed.
Therefore, there is no merit in the plaintiff’s exception, and it
stand to be dismissed. In my view,
the defendant’s intended
amendment is not made in bad faith or will cause injustice to the
plaintiff, but has been triggered by
the plaintiff’s complaints.
The intended amendment does not render the pleadings excipiable, and
therefore stand to be allowed.
[25]
It is trite that the awarding of costs is within the discretion of
the court. The court must exercise that
discretion judicially upon
consideration of the relevant facts of each case. The general rule is
that costs follow the suite. I do
not find any reason why costs
should not be awarded against the plaintiff.
[26]
In result I make the following order:
26.1
The plaintiff’s exception is dismissed with costs
26.2
Leave is granted to the defendant to amend its plea and counterclaim
within fifteen days of this order in terms of its notice
of
amendment.
KGANYAGO J
JUDGE
OF THE HIGH COURT OF SOUTH
AFRICA,
LIMPOPO DIVISION,
POLOKWANE
APPEARANCES:
Counsel
for the plaintiff
:
Badenhorst WJJ
Instructed
by
:
Hogan Lovells (SA) Inc
Counsel
for the defendant
: Adv Roos WJ
Instructed
by
:
Herman Potgieter Attorneys
Date
heard
:
16
th
September 2021
Electronically
delivered on
: 19
th
October 2021
[1]
[1993] ZASCA 54
;
1993
(3) SA 264
(A) at 269I
[2]
1980
(3) SA 91 (A)
[3]
[2005] ZACC 3
;
2006
(3) SA 247
(CC) at para 9