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[2019] ZAGPPHC 214
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Amalgamated Metals Recycling (Pty) Ltd v Limpopo Scrap Metals CC and Another (64593/2017) [2019] ZAGPPHC 214 (17 May 2019)
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IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
(1)
REPORTABLE:
YES/
NO
(2)
OF
INTEREST TO OTHER JUDGES: YES/
NO
(3)
REVISED
Case
No.: 64593/2017
17/5/2019
In
the matter between:
AMALGAMATED
METALS RECYCLING (PTY) LTD
Applicant
and
LIMPOPO
SCRAP METALS CC
1
st
Respondent
JACOBUS
FREDERICK KRITZINGER
2
nd
Respondent
JUDGMENT
MNGQIBISA-THUSI,
J
[1]
The applicant seeks the following
relief:
1.1
that the respondents be ordered to pay
the sum of R1, 618, 336.46, jointly and severally, the one paying the
other to be absolved;
1.2
interest on the amount of R1, 618,
336.46 at the rate of 10.15% per annum from date of application to
date of final payment;
1.3
costs of the application jointly and
severally the one paying the other to be absolved.
[2]
In 2017, the applicant, Amalgamated
Metals Recycling (Pty) Ltd, had instituted proceedings against the
first respondent, Limpopo
Scrap Metals CC (under case number
49343/2013), for payment of the amount of R2, 424, 093.36 (inclusive
of interest). The applicant
alleged that the amount owed was loan
advances it had given to the first respondent over a period of time.
On the day the action
was set down for hearing (being 6 July 2017)
and before the matter could be heard, the applicant and the first
respondent concluded
a settlement agreement.
[3]
It is apposite to set out the terms of
the settlement agreement. The settlement agreement provides that:
"1.
Defendant to pay to the Plaintiff
an amount of R 800, 000.00 plus R 150, 000.00 as a contribution
towards the Plaintiff's costs
(R 950, 000.00, hereinafter referred to
as the "settlement amount") in full and final settlement of
all disputes between
the parties under this case number.
2.
The settlement amount shall be
extinguished by the Defendant through payment in cash or through the
delivery and supply of gas to
the value of R 50, 000.00 per month, on
the terms set out hereafter:
2.1
Should the Plaintiff need/or require
Oxygen, LPG gas and/or related products it must place an order for
such supply and delivery
with the Defendant or the defendant's
nominee. Plaintiff cannot however guarantee the need therefor on a
monthly basis;"
2.2
Should the order for any particular
month be less than R 50,000.00, or, if no order is placed, the
difference shall be paid by the
Defendant in cash, before the 7
th
day of the following month;
2.3
Should the monthly order exceed the
amount in paragraph 2.2, above, the Plaintiff shall pay the
difference to the Defendant or his
nominee on or before the 7
th
day of the following month;
2.4
The aforementioned gas supply shall
include delivery to an address as nominated by the Plaintiff from
time to time within the Gauteng
Province, and shall not exceed "unit
price currently" paid by the Plaintiff to its existing supplier
or as far as it
is regulated, at the prescribed price.
3.
3.1
In the event of any default by the
Defendant, the full amount claimed by Plaintiff under the above case
number for the sum of R1,
618,336.46, shall be repayable together
with interest thereon and costs.
3.2
Jacobus Frederick Kritzinger, ID [….],
by appending his signature hereto, personally binds himself as surety
and co-principal
debtor in solidum for any outstanding amount as set
out above.
4.
The parties agree that this order
be made an order of court".
[4]
The second respondent, Mr Jacobus
Frederick Kritzinger, is the sole member of the first respondent.
[5]
The settlement agreement was signed on
behalf of the first respondent by the second respondent.
[6]
On 7 March 2017, the settlement
agreement was made an order of court.
[7]
The applicant alleges that between April and July 2017 the first
respondent failed to make
payment in terms of the settlement
agreement and was therefore in breach of the agreement.
[8]
On 19 July 2017 the applicant sent a
letter of demand to the respondents' attorneys, Bosman Attorneys, for
payment in the amount
of R1, 618, 336.46, to which no response was
received.
[9]
The respondents have denied that they are in breach of the agreement.
[10] The
respondents have raised two points
in
limine,
namely,
that this court does not have jurisdiction to hear the matter. It is
the respondents' contention that since they are outside
the
jurisdiction of this court, the application should be dismissed.
Secondly, the respondents raised the issue of misjoinder by
alleging
that the second respondent should not have been cited as a respondent
as he was not party to the settlement agreement.
[11]
With regard to the first preliminary
point, it was submitted on behalf of the applicant the complaint is
baseless. It is the applicant's
contention that the cause of action
arose within this court's jurisdiction as the settlement agreement
was concluded in Pretoria
and that performance under the settlement
agreement has to be effected within this court's area of
jurisdiction.
[12]
Section 21(1) of the Superior Courts
Act
[1]
provides that:
"Persons over whom and
matters in relation to which Divisions have jurisdiction
(1)
A Division has jurisdiction over all
persons residing or being in, and in relation to all causes arising
.. . within, its area of
jurisdiction and all other matters of which
it may according to law take cognisance, ...
(2)
A Division also has jurisdiction over
any person residing or being outside its area of jurisdiction who is
joined as a party to
any cause in relation to which such court has
jurisdiction ... , if the said person resides or is within the area
of jurisdiction
of any other Division".
[13]
It is common cause that the settlement
agreement made an order of court on 7 March 2017, was entered into
within this court's area
of jurisdiction. The purpose of this
application is the enforcement of that court order. Therefore the
cause of action arose within
this court's jurisdiction and there is
no reason why the applicant should be non-suited on the basis that
this court does not have
jurisdiction.
[14]
With regard to the joinder of the second
respondent, there is no dispute that he bound himself as surety and
co-principal debtor
with the first respondent under the settlement
agreement. Nothing turns on the fact that the second respondent was
not party to
the original agreement pertaining to the loan advances
the applicant made to the first respondent. Once the settlement
agreement
was entered into all obligations and rights the parties had
with regard to the original agreement are extinguished as the parties
have reached a compromise. In
Eke v
Parsons
[2]
the court stated that:
"[31] The
effect of the second order is to change the status of the rights and
obligations between the parties.
Save for litigation that may be
consequent upon the nature of the particular order, the order brings
finality to the
lis
between the parties; the
lis
becomes
res Judicata
(literally, 'a matter judged'). It changes the
terms of a settlement agreement to an enforceable court order. The
type of enforcement
may be execution or contempt proceedings. Or it
may take any other form permitted by the nature of the order. That
form may possibly
be some litigation, the nature of which will be one
step removed from seeking committal for contempt; an example being a
mandamus.
[32]
Litigation antecedent to enforcement is not necessarily
objectionable. That is so because ordinarily
a settlement agreement
and that resultant settlement order will have disposed of the
underlying dispute. Generally, litigation
preceding enforcement will
relate to non compliance with the settlement order, and not the
merits of the original underlying
dispute. That means the court will
have been spared the need to determine that dispute, which -depending
on the nature of the litigation
- might have entailed many days of
contested hearing"
[3]
.
[15] As
indicated above, it is the applicant's contention that between April
and July 2017 the respondents
failed to comply with the terms of the
settlement agreement by paying the monthly instalment as per the
court order.
[16]
The respondents oppose the granting of
the main relief sought by the applicant on the ground that it is the
applicant, and not the
first respondent, that has not complied with
the terms of the settlement agreement. It was submitted on behalf of
the respondents
that the applicant breached the agreement by,
contrary to the terms of the agreement, ordering gas from other
suppliers other than
from the first respondent, as stipulated in
clause 2.1 of the settlement agreement. However, as correctly pointed
out by counsel
for the applicant, even though clause 2.1 of the
agreement envisaged the applicant either paying an instalment of R50,
000.00 per
month or supplying the applicant with an equivalent amount
of gas, if necessary or required, clause 2.2 provides that the
applicant
does not guarantee that it would need that amount of gas
per month. If no gas was ordered by the applicant during a particular
month, the first respondent was obliged to pay the prescribed monthly
instalment. It was further submitted that since prior to the
conclusion of the settlement agreement the applicant had replenished
its gas stock, it was not necessary to order gas it did not
need.
[17]
I do not read any obligation imposed on
the applicant to order gas from the first respondent each month even
if it does not require
it. In terms of the agreement, there is an
express disclaimer by the applicant, guaranteeing ordering gas each
month from the first
respondent.
[18]
It is further the contention of the
respondents that first respondent has complied with the terms of the
settlement agreement in
that, as envisaged in clause 2.1 of the
settlement agreement, the first respondent has, through an entity
known as Eco-Oxy, has
supplied gas to the applicant's proxy, an
entity known as lnsimbi Aluminium Alloys ("lnsimbi"), which
gas has not been
paid for. According to the respondents, lnsimbi is a
branch of the applicant.
[19]
The applicant has denied that lnsimbi is
its branch and submits that it is a totally separate entity. The
respondents have not shown
proof that lnsimbi was the applicant's
nominee to receive the alleged supplied gas. Even if it was proven
that lnsimbi is a branch
of the applicant, as appears from the
invoices attached to the answering affidavit relating to this
transaction, the gas supplied
to lnsimbi amounts to R6, 498.80 which
is far less than the agreed instalment of R50, 000.00. The
respondents have not shown that
they have paid the shortfall to the
applicant.
[20]
Further, the respondents deny that the applicant made any loan
advances to the first respondent. The
respondents allege that the
advances were made to an entity known as PRM, a company in Botswana.
The respondents do not, however,
provide any proof of any link, which
1s denied by the applicant, between the applicant and PRM.
[21]
The duplicating affidavit filed by the
respondents does not take the matter any further as the applicant has
attested to the fact
that before trial it had replenished its stock
and it was not necessary for it to order any gas from the first
respondent.
[22]
In their heads of argument the
respondents raised the issue that the application should be dismissed
because of the existence of
a dispute of fact which cannot be
resolved on paper. The respondents allege that it is in dispute
whether or not at any stage the
applicant could need of gas each
month to the value of R50, 000.00 for its operations.
[23]
Motion proceedings are decided on the
papers filed by the parties. In case where there is a factual dispute
that can only be resolved
through oral evidence,
[4]
action proceedings are appropriate unless the factual dispute is not
real and genuine.
[5]
In
Stellenbosch Farmers' Winery Ltd v
Stellenvale Winery (Pty) Ltd,
[6]
the court held that where there is a
dispute of facts final relief should only be granted in notice of
motion proceedings if the
facts as stated by the respondent together
with the admitted facts in the applicant's affidavit justify such an
order.
[24]
I am of the view that no dispute of fact
exists which cannot be resolved on the papers. In its replying
affidavit the applicant
does not deny that it uses gas but states
that it had sufficient stock of gas prior to the trial hence the
settlement agreement
provides that it does not guarantee the need for
gas on a monthly basis.
[25]
It is common cause that in terms of the
settlement agreement the first respondent had an obligation to pay a
monthly instalment
amount of R 50, 000.00 or supply the applicant
with an equivalent amount of gas, if needed. Further, it is not in
dispute that
the first respondent has failed to pay any of the
prescribed instalment. The first respondent is therefore in breach of
the agreement
and is liable to pay the full amount of its debt,
including interest in terms of clause 3.1 of the agreement.
[26]
Further, there is no dispute that the
second respondent bound himself as surety and co-principal debtor
together with the first
respondent. On failure by the first
respondent to meet its obligations in terms of the agreement, the
second respondent becomes
liable.
[27]
In the result the following order is
made:
1.
The respondents are ordered to pay the
sum of R1, 618, 336.46, jointly and severally, the one paying the
other to be absolved;
2.
The respondent are to pay interest on
the amount of R1, 618, 336.46 at the rate of 10.15% per annum from
date of application to
date of final payment;
3.
The respondents to pay the costs of the
application jointly and severally the one paying the other to be
absolved.
NP MNGQIBISA-THUSI
Judge
of the High Court
For Applicant Adv JC Viljoen
(instructed by Liebenberg Malan Liezel Horn Inc)
For Respondents Adv M Snyman
(instructed by Bosman Attorneys)
[1]
Act 10 of 2013.
[2]
2016 (3) SA 37 (CC) 2016 (3) SA 37 (CC).
[3]
See also
Ex parte: PJLG and another; In re: PJLG and another
r[2013]
4 All SA 41
(ECG) where the court stated that: "[14)
... Once the parties to a civil action have reached agreement in
relation to the
issues raised by the action, and elected not to seek
the relief claimed therein, the mandate of the court determine those
issues
and to grant the relief claimed by the respective parties, is
terminated. Any order which is then granted by the court is simply
made with a view of assisting the parties in resolving the disputes
and facilitating the enforcement of the terms of their agreement".
[4]
Plascon - Evans Paints Ltd v Van Riebeck Paints (Pty)
Ltd[1984]
2 All SA 366 (A).
[5]
Soffiantini v Mould
[1956] 4 All SA 171 (E).
[6]
1957 (4) SA 234
((C) at 235 E-G. See also
Joh-Air (Pty) Ltd v
Rudman
1980 (2) SA 420
(T) at 428- 429;
Santino Publishers CC
v Waylite Marketing CC
2010 (2) SA 53
(GSJ) at 56F-578.