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[2019] ZAGPPHC 212
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Hyprop Investments Limited v Superstrike Investments 56 (Pty) Ltd t/a Baby Boom (6828/2019) [2019] ZAGPPHC 212 (13 June 2019)
REPUBLIC OF SOUTH AFRICA
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: 6828/2019
13/6/2019
In
the matter between -
HYPROP
INVESTMENTS LIMITED
Plaintiff
and
SUPERSTRIKE
INVESTMENTS 56 (PTY) LTD
t/a
BABY
BOOM
Defendant
JUDGMENT
STRYDOM
AJ
[1]
The
plaintiff brought an application for summary judgment against the
defendant. The plaintiff's predecessor in title leased premises
to
the defendant in terms of a written lease agreement ("the lease
agreement").
[2]
In
terms of the particulars of claim, issued on 1 February 2019 and
served on the defendant on 8 February 2019, the defendant defaulted
in its payments of rental and other charges, for the period December
2018 to January 2019. It is alleged that the defendant is
indebted to
the plaintiff to the extent of R210,490.70 as set out in a schedule
attached to the particulars of claim marked as
annexure "HS".
This amount was due and payable on 1 January 2019.
[3]
In
terms of clause 4.2 read with clauses 19.1 and 19.1.1 of the lease
agreement, the defendant was obliged to pay rental and all
other
amounts payable monthly in advance on or before the first day of each
calendar month of the lease period. Should the defendant
fail to pay
any rental and other amounts then and in such event, the plaintiff
shall have the right, but not be obliged to, forthwith
cancel the
lease agreement. This is a so-called "forfeiture clause"
allowing the plaintiff to cancel the lease agreement
without placing
the defendant in
mora.
[4]
The
undisputed breach took on 1 January 2019 when payment was not made on
due date and the right to cancellation vested from this
day.
Considering that the plaintiff did not send a prior notice of
cancellation, the effective date of cancellation, according
to
plaintiff, would have been on 8 February 2019, when the defendant was
notified as per the particulars of claim that the plaintiff
"hereby
elects to cancel the lease agreement".
[5]
Pursuant
to the alleged cancellation, the plaintiff prayed for judgment
against the defendant as follows:
[5.1] Payment of an
amount of R210 490.70;
[5.2] Interest on the
said sum of R210 490.70 at the rate of 10.25% per annum a
tempore
morae;
[5.3] Confirmation of
the cancellation of the lease;
[5.4] Eviction of the
defendant and/or any other occupant from the leased premises;
[5.5] Plaintiffs
damages to be postponed
sine die;
[5.6] Costs of suit.
[6]
This matter was previously on the
unopposed court roll of 13 May 2019 but was postponed to this court's
roll for 5 June 2019. The
reason for the postponement was the fact
that the papers were not paginated and indexed and the parties failed
to file heads of
argument in respect of the now opposed application.
It should be noted that the defendant filed its opposing affidavit
during the
course of the morning of 7
May
2019, within the time period set for
the filing of an opposing affidavit but too late for pagination
before this application, along
with the other application files,
would have been sent to the judge hearing the unopposed motion roll
together with opposed summary
judgment applications. I will deal with
this issue later when I decide a reserved cost order.
[7]
The defendant filed its notice of
intention to defend on 11 March 2019 and the plaintiff filed its
summary judgment application
on 26 March 2019. The deponent to the
founding affidavit, Wayne Abegglen, signed plaintiff's affidavit on
18 March 2019. These
dates become important when the defendant's
defences are considered.
[8]
In the opposing affidavit, various
defences are raised. The first defence raised is one of payment of
the amount claimed which goes
hand in hand with the defence that the
plaintiff had not exercised its rights to cancel the agreement within
its terms, i.e.
"forthwith"
.
[9]
It is alleged that the defendant made a
payment on 31 January 2019 in an amount of R200 000, which
substantially lowered the amount
of R210 490.70 as per annexure "H8"
attached to the particulars of claim. It is then alleged that when
the summons was
served the amount claimed, in relation to the January
2019 rental, was no longer due and payable. When the founding
affidavit was
deposed to on 18 March 2019, a further payment was made
on 13 February 2019, and no outstanding debt existed. It was stated
that
the deponent to the founding affidavit could no longer verify
the cause of action and amount contained in the particulars of claim
(which was in any event wrong) as all outstanding amounts, including
the February 2019 rental (which were not claimed in the particulars
of claim), were paid.
[10]
It is common cause that when the 31
January 2019 payment was received, the lease agreement was still not
cancelled.
[11]
It was argued that the fact that no debt
existed when the founding affidavit was signed rendered this
affidavit fatally defective
as it verified a debt no longer in
existence. The defendant has shown that on the date of receipt of the
summons, the amount claimed
was substantially paid. The small
differences between the amount paid and alleged to be outstanding was
said to be related to inaccuracies
pertaining to electricity charges.
[12]
When the plaintiff caused the summons to
be served on the defendant, the amount claimed therein was incorrect
and when the affidavit
was deposed to, the confirmation of the amount
was incorrect.
[13]
On behalf of the defendant it was argued
that this conduct amounts to dishonesty and that the legal process
has been abused.
[14]
That the particulars of claim, which
refers to a December 2018 and January 2019 debt, and that the
affidavit, are wrong cannot be
disputed but whether it was dishonest
to verify the incorrect debt under oath is another question. It was
explained to defendant
according to correspondence that at the time
when the legal department of the plaintiff was instructed to sue the
defendant, the
position would have been as set out in the particulars
of claim. The court will accept that it must have taken some time to
prepare
these documents and it is understandable that if payments
were made subsequent to the instruction, this would not have been
reflected
in the particulars of claim. The affidavit confirmed what
the situation was when the particulars of claim were drafted. It is
unclear
whether the deponent to the affidavit had knowledge that
payments were made or was only verifying the particulars of claim as
it
stood.
[15]
The court, on the facts before court at
this stage, cannot conclude that the deponent to the founding
affidavit acted dishonestly.
This court must consider whether the
plaintiff's affidavit as it stands is in line with the prescripts of
the rule and whether
the defendant has indicated under oath that it
has a
bona fide
defence.
In the defendant's answering affidavit, the defendant requested the
court to find dishonesty and to dismiss the plaintiff's
action on the
basis that it is an abuse of process. As stated, this finding cannot
be made on the facts before the court. Moreover,
the rule does not
provide the court with an option to dismiss the plaintiff's claim.
[16]
What the court can accept at this stage
is that the defendant has put up a
bona
fide
defence insofar as the amount
claimed in the particulars of claim is concerned. The defendant has
shown that this amount has been
paid. The plaintiff did not persist
with its claim for outstanding rental, but persisted with its claim
for confirmation of the
cancellation of the lease agreement and the
eviction of the defendant.
[17]
The question whether the plaintiff
validly cancelled the lease agreement remains contentious. It became
common cause between the
parties that the defendant had to pay the
January 2019 rental on or before 1 January 2019. It was also not
disputed that if this
amount was not paid on due date and that the
plaintiff acquired the right to
"forthwith
cancel"
the lease agreement.
This election to cancel was only exercised when the summons was
served on 8 February 2019. That raised a question
whether the
plaintiff still had the contractual right to cancel the lease
agreement 38 days after the right vested. On behalf of
the defendant
it was argued that the meaning of
"
forthwith"
would be
"immediately''
or
"without delay or within
a
reasonable time"
in
the circumstances of the case. Without evidence it will be difficult
for this court to decide by when this right of cancellation
should
have been exercised. I agree with the argument on behalf of the
defendant that whether the plaintiff cancelled
"within
a
reasonable
time under the circumstances" ,
is
a question probably best suited to be determined at exception stage
or during trial. In some cases
"forthwith"
would mean within a few days but in
other cases, a period of 38 days may be reasonable. On behalf of the
plaintiff it was argued
that the decision to cancel the lease after
late payment remains an option, even though the plaintiff accepted
the rent, provided
that plaintiff expressly reserve its rights to
cancel the lease. This does not mean that the plaintiff should decide
immediately
after it became aware of the breach whether he would
prefer for the lease to continue or to come to an end. It was argued
that
an unreasonable delay in the plaintiff's decision implicitly
indicate his intention to waive his right to cancel, although it is
unlikely that such a waiver would ever be assumed.
[18]
On behalf of the defendant it was argued
that waiver does not come into consideration. The contractual
reference to "forthwith'
provides for immediate cancellation. If
this is not done, that right falls away.
[19]
The defendant alleged that the
cancellation of the plaintiff did not take place
"forthwith"
and alleged that the plaintiffs
attempted cancellation, 38 days after the breach, amounted to a
repudiation of the lease agreement
which was accepted by the
defendant on 1 April 2019. Clearly this has now become a disputed
issue which should be decided on exception
or at trial. Moreover, the
date of cancellation and extent of holding over damages, if any, are
inextricably linked. There is also
no indication that plaintiff,
after the defendant's breach, reserved itself the right to cancel the
lease agreement at a later
stage.
[20]
Summary judgment proceedings are
inappropriate for dealing with clearly arguable questions of law
which should properly be dealt
with on exception. See:
Hollandia
Reinsurance Company Ltd v Nedcor Bank Ltd
1993 (3) SA 574
(W) at 576
G -
576
I.
[21]
A further defence was raised relating to
a counterclaim. The defendant in its affidavit resisting summary
judgment set out a counterclaim
which amounts to a
bona
fide
defence that exceeds the amount
claimed by the plaintiff. This counterclaim is for the repayment of a
deposit in terms of the lease
and contractual damages associated with
the retrenchment of employees on the leased premises. It is trite
that if the counterclaim
exceeds the amount claimed in a summary
judgment it will be a basis to grant leave to defend. The veracity of
the counterclaim
is a matter to be determined at trial.
[22]
Accordingly, the court is of the view
that as far as the cancellation alleged by the plaintiff is
concerned, the defendant has put
up a bona fide defence to avoid such
an order on a summary judgment basis. The fact that the defendant, on
its version, cancelled
the lease agreement with effect from 1 April
2019, does not assist the plaintiff in its claim for eviction, also
not what defendant
later stated in correspondence. The plaintiff's
claim for eviction is premised on its cancellation of the agreement
on 8 February
2019 pursuant to the 1 January 2019 non-payment and
cannot be premised on the defendant's subsequent cancellation.
Accordingly,
the court is of the view that the defendant must be
granted leave to defend the matter.
[23]
This court must also consider the
reserved costs of the opposed summary judgment which was set down for
13 May 2019. The costs incurred
on that day were reserved. To
consider the appropriate costs order the court will have to consider
why the matter was not heard
by Nkosi AJ on this date and why he
decided to postpone the matter. I am of the view that the previous
court was best suited to
have dealt with the cost order as that court
formed a view why the matter had to be postponed. This was, however,
not done and
I will now have to rely on what I was told by counsel
what the reasons were. I was informed that the reason for the
postponement
was that the papers were not indexed and paginated and
that heads of argument on behalf of both parties were not submitted.
[24] In paragraph 13.23
of the consolidated practice directives manual dealing with summary
judgments the
onus is placed on the plaintiff to paginate and index
the application before it is served and filed. If a defendant files
an opposing
affidavit, as it did, such affidavit and annexures must
be paginated and updated and an updated index must be served and
filed.
This was not done and the reason advanced by the plaintiff for
not doing so was that the files had already gone to the judge.
[25] Sub-paragraph 4
determines as follows:
"The parties will be entitled to file
and
a
supervisor
will be obliged to receive and put of the file, opposing affidavits,
indices, practice notes and heads of argument in
spite of
a
summary judgment application having
been finally enrolled."
[26]
This would entail that even if a file
has been taken to a judge, the judge's registrar could be approached
to obtain the file to
further pagination and to file an updated index
and heads of argument. As the onus was on the plaintiff to do that,
and it failed
to do so, the plaintiff must be blamed for not having a
fully paginated and indexed set of papers before the judge.
[27]
It does not however end there. Both
parties were obligated to file heads of argument. Should the
defendant fail to file short heads
of argument the application should
not be postponed unless there are exceptional circumstances requiring
a postponement. On the
other hand, if the plaintiff failed to file
heads of argument, this will lead to a postponement. From this it can
be concluded,
that if the papers were properly paginated and indexed
and the plaintiff had filed heads of argument, this matter would in
all
likelihood have been heard by the court on 13 May 2019.
[28]
The awarding of costs is a discretionary
issue and considering the facts of this matter I am of the view that
the plaintiff should
be held responsible to pay the wasted costs
incurred as a result of the postponement on 13 May 2019.
[29]
The following order is made:
(1)
The application for summary
judgment is refused.
(2)
The defendant is granted leave to
defend.
(3)
Costs of the application will be
costs in the cause.
(4)
The wasted costs incurred on 13
May 2019, which was reserved for decision by this court, is to be
paid by the plaintiff.
R. STRYDOM
ACTING
JUDGE OF THE HIGH COURT GAUTENG DIVISION, PRETORIA
Date
of hearing: 5 May 2019
Date
delivered: 13 June
2019 at 10h00