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[2021] ZAECMHC 44
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Mzontsundu Trading (Pty) Ltd and Another v Lavelikhwezi Investments (Pty) Ltd and Another (3996/19) [2021] ZAECMHC 44 (7 December 2021)
IN
THE HIGH COURT OF SOUTH AFRICA
(EASTERN
CAPE LOCAL DIVISION, MTHATHA)
CASE
NO: 3996/19
In
the matter between:
MZONTSUNDU
TRADING (PTY) LTD
1
st
Applicant
DAN
MZONTSUNDU DABULA
2
nd
Applicant
and
LAVELIKHWEZI
INVESTMENTS (PTY) LTD
1
st
Respondent
WANDISILE
SIPHO
MTI
2
nd
Respondent
JUDGMENT
MBENENGE
JP:
Background
[1]
On 23 October 2019, the applicants
[1]
instituted action proceedings against the respondents
[2]
for payment of R10 156 158. 56, together with interest
thereon and costs. The action arose out of a transaction that
involved the sale of a service station.
[2]
After entering an appearance to defend the action, on 09 January
2020, the respondents
delivered a plea and counter-claim based on the
sale of the service station. Contrary to the provisions of rule 18
(1) of the Uniform
Rules,
[3]
the
pleading embodying the counter-claim is signed once, and not twice,
by the respondents’ attorney of record.
[3]
The applicants thereupon launched a summary judgment application,
which was opposed
by the respondents on the ground that the
counter-claim constituted a defence to the applicants’ claim.
[4]
On 18 August 2020, this court
[4]
granted summary judgment for payment by the respondents, jointly and
severally the one paying the other to be absolved, of the
entire
amount claimed, together with interest and costs.
[5]
Leave to appeal the judgment was refused by Dukada AJ on 30 September
2020, and by
the Supreme Court of Appeal
[5]
on 22 February 2021.
[6]
On 30 April 2021, the respondents applied to the SCA for a
reconsideration of the
SCA’s decision refusing leave to appeal.
The SCA dismissed the application on the ground that no exceptional
circumstances
warranting reconsideration or variation of the decision
refusing the application for leave to appeal had been established.
[7]
On both occasions the matter served before the SCA, reliance was
placed on the existence
of the respondents’ counter-claim as
constituting a defence to the summary judgment application.
[8]
On 10 May 2021, the respondents delivered a purported notice to
amend, introducing
a different claim for the performance of an oral
sale agreement requiring the applicants to pay the respondents
R12 857 804.
67, together with interest and costs.
[9]
Thereafter, the respondents filed a document headed “
counter-claim
”,
purporting to perfect the notice to amend. This document, too, is
signed once, and not twice by the respondents’
attorney of
record.
[10]
On 20 May 2021, the respondents lodged an application to the
Constitutional Court seeking leave
to appeal the SCA’s decision
dismissing the respondent’s application for special leave to
appeal. Reliance for this
application was placed on the counter-claim
in its un-amended form.
[11]
The respondents delivered a discovery affidavit and copies of the
discovered documents, on 09
June 2021.
[12]
On 15 June 2021, the applicants delivered a notice in terms of rule
30 (2) (b) calling upon the
respondents to remove the following
causes of complaint on pain of an application being brought to set
aside the steps as being
irregular, namely:
[12.1]
the delivery of a notice of intention to amend a counter-claim
in an
action that has been determined;
[12.2]
the substitution of a new claim under the guise of an amendment
to a
counter-claim in action proceedings that have been determined; and
[12.3]
the delivery of discovery affidavits and documents in support
of or
in connection with proceedings that have been determined.
The
instant proceedings
[13]
The respondents gave no heed to the notice, with the result that the
instant proceedings were
launched on 12 July 2021, for an order-
(a)
condoning the applicants’ failure to deliver a notice to remove
the causes of complaint within
10 days of 10 May 2021 and extending
the time limit accordingly;
(b)
setting aside the respondents’ notice to amend delivered on 10
May 2021;
(c)
setting aside the respondents’ discovery affidavit attested on
09 June 2021; and
(d)
directing the first and seconds respondents to pay the applicants’
costs on the attorney and client
scale.
The
issues
[14]
The issues that fall to be determined in these proceedings are -
[14.1]
whether the applicants’ have made out a case for the
grant of
condonation for the late delivery of the notice to remove causes of
complaint;
[14.2]
whether the respondents’-
[14.2.1]
notice to amend delivered on 10 May 2021; and
[14.2.2]
discovery affidavit attested on 9 June 2021, constitute irregular
proceedings;
and
[14.3]
what cost order should be made.
Condonation
[15]
In terms of rule 30 (2) (b), a party to a cause in which an irregular
step has been taken by
any other party must, within 10 days of
becoming aware of the step, by written notice, afford his opponent an
opportunity of removing
the cause of complaint within 10 days.
[16]
It has been held that the purpose of this rule is to prevent
unnecessary applications being brought
and to put a defaulting party
on notice as to the consequences of his default.
[6]
[17]
Rule 27 gives the court, on good cause shown, the power to condone
any non-compliance with the
Rules. “
Good
cause
”
confers on the court a wide discretion
[7]
which must, in principle, be exercised with regard also to the merits
of the matter seen as a whole.
[8]
[18]
The impugned notice to amend was delivered on 10 May 2021. That step
was immediately followed
by the delivery of an application to the
Constitutional Court, on 20 May 2021, and the delivery of a discovery
affidavit and copies
of the discovered documents, on 09 June 2021.
[19]
It is not in dispute that counsel’s advice was sought on 15
June 2021. Counsel advised
that the Constitutional Court was unlikely
to grant leave to appeal and that the applicants should rather await
the dismissal of
the application or a refusal to consider the
application
[20]
In my view, the advice given was sound and had the prospect of
resolving the issues without incurring
additional legal expenses.
[21]
When the respondents did not remove the causes of complaints, on 21
June 2021, the applicants
wrote to the Registrar of the
Constitutional Court seeking information in relation to the
developments in the matter. The Registrar
advised, on 06 July 2021,
that the matter was still pending and that no directions or orders
had been issued.
[22]
The notice to remove the causes of complaint is 16 days late. The
degree of delay is, in my view,
not unreasonable. The same goes for
the explanation proffered namely, an attempt to avoid costly
litigation.
[23]
I was not pointed to any prejudice the respondents will suffer as a
result of the grant of the
condonation sought. Nothing prevents them
from pursuing a claim against the applicants in a separate action.
[24]
Good cause for the delay has been shown. The application passes
muster. Therefore, the condonation
sought ought to be granted.
The
merits
[25]
A perusal of the relevant judgment reveals that Dukada AJ granted
judgment in favour of the applicants
upon being satisfied that the
deponent to the affidavit opposing the summary judgment application
was not creditworthy.
[26]
On no less than two occasions, the respondents’ counter-claim
was rejected as not constituting
a
bona fide
defence.
[27]
As far as I could have ascertained, the respondents’ contention
is that only the claim
of the applicants has been determined, and not
the counter-claim of the respondents. It was further urged upon me to
note that
there is support in law for the pursuit of the
counter-claim as an independent action.
[28]
In
Soil
Fumigation Services Lowveld CC v Chemfit Technical Products (Pty)
Ltd
[9]
the court held:
“
[11] With
regard to the court’s overriding discretion to refuse summary
judgment even where the defendant’s affidavit
does not measure
up to the requirements of rule 32 (3) (
b
), it has been said
that, in view of the extraordinary stringent nature of the summary
judgment remedy, that discretion may be exercised
in a defendant’s
favour if there is doubt as to whether the plaintiffs case is
unanswerable and there is a reasonable possibility
that the
defendant’s is good . . . The reason why the remedy of summary
judgment is referred to as ‘
stringent
’ and
‘
extraordinary
’ is because it effectively closes
the door of the Court on the defendant without affording an
opportunity to ventilate the
case by way of a trial. When the answer
raised in the opposing affidavit is in the nature of a counter-claim
instead of a plea,
the position is, however, somewhat different
.
Even where summary judgment has been granted for that part of the
claim that would be extinguished by the counter-claim, the defendant
can still pursue the counter-claim by issuing summons in a separate
action.”
(emphasis added)
[29]
In light of this clear and trite legal position, the respondents’
continued stance based
on the counter-claim as still extant and
remaining to be pursued in the main action is hard to comprehend.
[30]
Before concluding this judgment, it is necessary to comment, in
passing only, on an aspect that was,
in hindsight, regrettably not
pertinently raised with the parties at the hearing; the pleadings
relied on by the respondents
[10]
are self-evidently, in and by themselves, an irregular proceeding, in
as much as they have not been signed, either by counsel and
the
respondents’ attorney of record, or by the attorney, twice as
the attorney with the right of audience in the high court,
and as
attorney of record.
[11]
[31]
Where the attorney signs the pleading not as an individual but on
behalf of the firm representing
the litigant, it is appropriate for
the attorney to sign the pleading twice, once as an attorney
certified in terms of section
4 (2) of the Right of Appearance in
Court Act 62 of 1995 and then again in the usual format on behalf of
the firm of attorneys.
Conclusion
[32]
The applicants have also made out a good case for the grant of the
order they are seeking in
terms of rule 30 (1) of the Rules. The
steps taken by the respondents fall to be set aside as constituting
irregular proceedings.
[33]
The issue of costs remains to be considered.
Costs
[34]
Mr
Quinn
who, together with Ms
Young
appeared for the
applicants, argued with much vigour that the respondents should pay
costs on the punitive attorney and client scale,
such costs to
include those consequent upon the employment of two counsel.
[35]
The award of costs, including the costs associated with the
employment of counsel, is a matter
within the discretion of the
court.
[12]
Is
a punitive costs order warranted?
[36]
Costs on an attorney and client scale are to be awarded where there
is fraudulent, dishonest,
vexatious conduct and conduct that amounts
to an abuse of court process. In this regard, it was held, in
Plastic
Converters Association of South Africa on behalf of members v
National Union of Metalworkers of SA
[13]
:
“
[t]he scale of
attorney and client is an extraordinary one which should be reserved
for cases where it can be found that a litigant
conducted itself in a
clear and indubitably vexatious and reprehensible [manner]. Such an
award is exceptional and is intended
to be very punitive and
indicative of extreme opprobrium.”
[37]
In
Fisheries
Development Corp v Jorgensen and Another
[14]
“
vexatious”
was held to mean:
“
[F]rivolous,
improper: instituted without sufficient ground, to serve solely as an
annoyance to the defendant. Vexatious proceedings
no doubt include
proceedings which, although properly instituted, continued with the
sole purpose of causing annoyance to the defendant;
‘
abuse
’
connotes a misuse, an improper use, a use
mala
fides
,
a use for an ulterior motive.”
[15]
[38]
It is as well to refer to
In
Re
Alluvial Creek Ltd
[16]
where, in the context of a punitive costs order, Gardiner J remarked:
“
Now sometimes such
an order is given because of something in the conduct of a party
which the Court considers should be punished,
malice, misleading the
Court and things like that, but I think the order may also be granted
without any reflection upon the party
where the proceedings are
vexatious, by vexatious I mean where they have the effect of being
vexatious, although the intent may
not have been that they should be
vexatious. There are people who enter into litigation with the most
upright purpose and a most
firm belief in the justice of their cause,
and yet whose proceedings may be regarded as vexatious when they put
the other side
to unnecessary trouble and expense which the other
side ought not to bear.”
[39]
In
Riemhoogte
CC and others v Jacob Durr Trust and Others
[17]
the court found the respondents’ conduct had the effect of
being vexatious, although the court did not find the respondents’
conduct was vexatious or
mala
fide.
It
held that where a party proceeds from vexatious reckless and
malicious motives, such party will normally be ordered to pay the
wasted costs. Vexatious proceedings were held not to be limited to
the vexatious intent of a party; even though a party might not
have
had such intent, the consequences of his litigation may be vexatious.
The court marked its displeasure with the respondents’
conduct
in the proceedings by making a cost award on the attorney and client
scale.
[40]
I am satisfied that the conduct of the respondents can fairly be
described as vexatious. It is reprehensible
and cries out for
an award of a punitive costs order. This conduct was persisted in at
all twists and turns in proceedings preceding
the instant case.
Costs of two counsel
[41]
The factors that the court takes into consideration in deciding
whether costs of two counsel
should be allowed include the volume of
evidence; the complexity of facts or the law relating to such facts;
the importance of
the matter, and whether there are any difficulties
or other challenges present in respect of the legal principles or
their applications
to the facts of the matter.
[18]
[42]
This application happens to be one of no unusual difficulty; the
issues are of no great complexity.
The case revealed nothing out of
the ordinary and was disposed of on a fairly trite legal
principle.
[19]
[43]
I am, therefore, of the view that the employment of two counsel was
not justified.
Order
[44]
In all these circumstances, the order that I make is the following:
(a)
The applicants’ failure to deliver a notice calling upon the
respondents to remove causes of complaint
within 10 days of 10 May
2021 is condoned and the time limit extended accordingly.
(b)
The respondents’ discovery affidavit attested on 09 June 2021
and the documents subsequently delivered
pursuant to the affidavit
are hereby set aside as irregular proceedings.
(c)
The first and second respondents are directed to pay the costs of the
application, jointly and severally,
the one paying the other to be
absolved, on a scale as between attorney and client.
_____________________
S
M MBENENGE
JUDGE
PRESIDENT OF THE HIGH COURT
Applicants’
counsel
:
R Quinn SC
(with him,
C Young
)
Applicants’
attorneys
:
Yandiswa Sonamzi Attorneys
East London
C/o Fono Attorneys
Mthatha
Respondents’
counsel
:
Y Alli
Respondents’
attorneys :
G Nkomo Incorporated
Midrand
C/o Jerry Nomkusane
Attorneys
Mthatha
Date
matter heard
:
04 November 2021
Date
judgment delivered :
07
December 2021
[1]
The
first and seconds plaintiffs in the main action from which this
application arises.
[2]
The
first and second defendants in the action.
[3]
The
Rules
[4]
Per
Dukada AJ
[5]
SCA
[6]
Khunou
and Another v M Fihrer and Son (Pty) Ltd
1982 (3) SA 353
(W) at 360 H.
[7]
Du
Plooy v Anwes Motors (Edms) Bpk
1983 (4) SA 212
(O) at 216H – 217A.
[8]
Gumede
v Road Accident Fund
2007 (6) SA 304
(C) at 307 C - 308 A.
[9]
2004
(6) SA 29
(SCA) 35, paras E - F
[10]
The
respondents’ plea and counter-claim delivered on 09 January
2020 and the “
counter-claim
”
referred to in paragraph 9 above.
[11]
Fortune
v Fortune
1996 (2) SA 550
(C) at 551 H - I.
[12]
Maart
v Minister of Police
[2016] JOL 36662
(ECG) para 41.
[13]
[2016]
ZALAC 39
; [2016] 37 ILJ 2815 (LAC).
[14]
1979
(3) SA 1331(W)
at 1339 E – G.
[15]
Also
see
Marsh
v Odendaalsrus Cold Storage Ltd
1963 (2) SA 263
(W) at 270 C – F, where it was held that
vexatious proceedings include proceedings which put the other side
to unnecessary
trouble and expense. The proceedings did not need to
be reprehensible or malicious or misleading.
[16]
1929
CPD 532
at 535.
[17]
[2020]
JOL 47879
(ML) para 45.
[18]
Maart
(supra).
[19]
Cf
Fluxmans Incorporated v Levenson
[2017]
1 All SA 313
(SCA);
[2016] JOL 36970
(SCA);
2017 (2) SA 520
(SCA),
para 45.