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[2019] ZAWCHC 61
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Tswalu Kalahari Reserve (Pty) Limited v Cane Time Manufacturers CC (19533/2018) [2019] ZAWCHC 61 (28 May 2019)
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
CASE
NO:
19533/2018
In
the matter between:
TSWALU
KALAHARI RESERVE (PTY)
LIMITED
Plaintiff/Applicant
v
CANE
TIME MANUFACTURERS
CC
Defendant/Respondent
Coram:
Justice J I Cloete
Heard:
13 May 2019
Delivered:
28 May 2019
JUDGMENT
CLOETE
J
:
[1]
This opposed application for
summary judgment can be determined on the two points
in
limine
raised by the
defendant. The first is that the deponent to the affidavit filed in
support of the application, Mr Arnold Meyer,
lacked the requisite
knowledge for purposes of uniform rule 32(2). The second is that, in
any event, Mr Meyer could not have verified
a cause of action when
the pleading itself fails to disclose one and is excipiable.
[1]
[2]
The plaintiff (“Tswalu”) issued summons against the
defendant (“Cane Time”) for repayment of a deposit
of
R2 077 849.05. It is alleged in the particulars of claim
that during March 2018 Tswalu concluded an agreement with
Abelheim
Lee Duncan (Pty) Ltd (“ALD”) in which ALD undertook to
renovate Tswalu’s game lodge known as “The
Motse”.
[3]
The terms of the agreement allegedly included that ALD would provide
Tswalu with a cost estimate of R15 157 242 (which
Tswalu
subsequently approved) and that ALD required from Tswalu, upon such
approval, payment of a 50% deposit to enable ALD in
turn to pay
deposits to its suppliers to secure goods and services.
[4]
It is also alleged that the 50% deposit was duly paid by Tswalu to
ALD. However ALD breached the agreement in that it failed
to pay over
to its suppliers all of the deposits for which it had invoiced
Tswalu, and retained R3 149 189.34. This led
to Tswalu
cancelling its agreement with ALD on 13 June 2018.
[5]
Tswalu’s claim against Cane Time is pleaded as follows:
‘
12.
ALD had undertaken to supply certain imported Dedon woven outdoor
furniture as part of the FF & E
[2]
renovation
for The Motse, for which ALD placed an order with the defendant.
13.
No written agreement governed the ordering by ALD of the furniture
from the defendant, but the defendant issued a sales order
dated
12 April 2018 to ALD, a copy of which is annexed hereto marked
POC2.
14.
The defendant’s sales order sent to ALD, provided for payment
terms of a 50% deposit which was required on confirmation
of order
and the balance prior to despatch of the goods.
15.
ALD duly paid the defendant the sum of R2 077 849.05, being
the 50% deposit amount, from monies paid by the plaintiff
to ALD.
16.
On or about 13 June 2018, the plaintiff cancelled the contract with
ALD and required as part of the cancellation, that all monies
paid to
ALD including the deposit paid to the defendant be refunded to the
plaintiff.
17.
On or about 10 August 2018, the plaintiff, represented by its
chairman, Mr Arnold Meyer, and ALD, represented by its director,
Ivor
Abelheim, concluded at Johannesburg, a settlement agreement and a
cession agreement in terms of which:
17.1
The ALD agreement was confirmed as cancelled;
17.2
ALD was, in turn, to issue formal notices of cancellation to its
suppliers, including the defendant;
17.3
ALD would instruct its suppliers, including the defendant, to refund
the deposit paid by the plaintiff; and
17.4
The claim of ALD in and to the agreement with its suppliers,
including the defendant, was ceded to the plaintiff.
18.
A copy of the settlement agreement is annexed hereto marked POC3 and
a copy of the cession agreement is annexed hereto marked
POC4.
19.
On or about 20 July 2018, the defendant disputed the right of ALD to
cancel the supply agreement and the defendant’s Mr
Steve
Arelisky advised that he did not consent to the cancellation of the
contract on the part of the defendant and would retain
the deposit
paid. An email recording same is annexed hereto marked POC5.
20.
The express, alternatively implied, further alternatively tacit terms
of the cession agreement concluded between the plaintiff
and ALD,
provided:
20.1
The Cane Time claim was defined in clause 1.2.7 as the right of the
cedent, ALD, to the repayment of R2 077 849.05
arising from
the cancellation of the supply agreement entered into between Cane
Time and the cedent, ALD.
20.2
In terms of clause 2.1… the cedent, ALD, ceded and transferred
to and in favour of the cessionary, the plaintiff, as
an out and out
cession, all of the ceded rights which cession and transfer the
cessionary accepted subject to the warranties contained
in paragraph
4 thereof.
[3]
…
.
21.
Accordingly, arising from the payment of the deposit and the
cancellation of the agreement with ALD and the cession of ALD’s
claim to the plaintiff, the defendant is obliged to repay the 50%
deposit paid in the sum of R2 077 849.05 to the plaintiff…’
[6]
Having alleged in paragraph 13 of the particulars of claim that no
written agreement was concluded between ALD and Cane Time,
Tswalu
failed to plead the terms of the agreement upon which it relied,
other than the oblique reference to Cane Time’s sales
order,
annexure POC2 thereto. It also failed to plead ALD’s acceptance
of the terms of the unspecified agreement, save for
the allegation at
paragraph 15 that ALD duly paid over the deposit stipulated by Cane
Time in the sales order.
[7]
Having alleged in paragraph 17.2 that one of ALD’s obligations
in terms of the settlement agreement was to issue formal
notices of
cancellation to its suppliers (including Cane Time), Tswalu failed to
even allege that ALD had duly complied therewith,
let alone where and
in what manner such cancellation occurred, or on what grounds ALD (or
Tswalu as cessionary) is entitled to
repayment of the deposit upon
cancellation, notwithstanding that the Cane Time claim pleaded at
paragraph 20.1, and purportedly
ceded by ALD to Tswalu, was defined
in the cession agreement as ALD’s right to repayment ‘
arising
from the cancellation of the supply agreement between Cane Time and
ALD’.
[8]
Instead the opposite is pleaded at paragraph 19, namely that Cane
Time did not consent to cancellation and would retain the
deposit
paid if cancellation occurred. Annexure POC5, which is relied upon
for this averment, is dated 20 July 2018 and is
also an annexure
to the cession agreement. It is an email from Mr Abelheim of ALD
to Mr Arelisky of Cane Time which records
the latter’s
refusal to cancel and its retention of the deposit in the event of
cancellation, but continues ‘…
at this stage the
possibility exists that my company will have to cancel its order with
your company…’.
[9]
Paragraph 20.2 of the particulars of claim refers to clause 2.1 of
the cession agreement which records that the ceded rights
are
accepted by Tswalu subject to the warranties contained in clause 4
thereof. These warranties, provided by ALD to Tswalu, include:
9.1 In clause 4.1.2, that ALD has
not
cancelled the supply agreements (including the Cane Time agreement)
nor will it
cancel them; and
9.2 In clause 4.1.6, the specific,
allegedly “sole” terms of the agreement between ALD and
Cane Time, from which it
is clear that, according to ALD, there were
further terms than those pleaded at paragraph 13 of the particulars
of claim; and they
do not make reference to the basis upon which ALD
is entitled to repayment of the deposit in the event of cancellation
at its instance.
[10]
These aspects, which go directly to the averments necessary to
sustain a cause of action, appear to form the crux of the fourth
and
fifth grounds of complaint contained in Cane Time’s notice in
terms of uniform rules 23 and 30 served on Tswalu’s
attorneys
on 7 November 2018, a week before Tswalu applied for summary
judgment.
[11]
In
Onyx
Distributors CC v Jenta Couriers
[4]
Binns-Ward J dealt with the granting of summary judgment on an
excipiable pleading as follows:
‘
[8]
In a supplementary written submission, furnished with the leave of
the court, the defendant’s counsel submitted that the
aforementioned defect in the particulars of claim rendered the
pleading excipiable and argued that summary judgment could not be
given on an excipiable summons. He cited the following judgments in
support of that contention:
Ritz
v Katzeff
1950
(1) SA 584
(C);
Gulf
Steel (Pty) Ltd v Rack-Rite Bop (Pty) Ltd & Another
1998
(1) SA 679
(O) following
Northern
Cape Scrap and Metals (Edms) Bpk v Upington Radiators & Motor
Graveyard (Edms) Bpk
1974
(3) SA 788
(NC) and
Threeball
Construction (Pty) Ltd v Lipshits
1987
(2) SA 633
(W).
[9]
I should preface my consideration of this argument by recording that
it is evident from this court’s judgment in
Arend
& Another v Astra Furnishers (Pty) Ltd
1974
(1) SA 298
(C) at 314 that the
excipiability of a claim is a matter that properly falls to be
considered in the context of weighing a plaintiff’s
compliance
with rule 32(1) and (2). Once that much is acknowledged it is
axiomatic that summary judgment cannot be granted on a
claim that is
excipiable on the grounds that it is bad in law or does not disclose
a cause of action.’
[12]
In
Arend
and Other v Astra Furnishers (Pty) Ltd
[5]
it was held that:
‘
Where
the attack is upon the ground that the plaintiff’s particulars
of claim do not substantiate a valid cause of action,
then, in my
view, this is not strictly a defence and it does not fall within the
ambit of Rule 32(3)(b) regarding the defendant’s
obligation
fully to disclose his defence. It raises rather the question as to
whether plaintiff has complied with Rule 32(1) and
(2) relating to
the requirements of an application for summary judgment…’
[13]
As was held by Steyn J in
Ritz
v Katzeff
:
[6]
‘
This
is not the proper stage in the proceedings to adjudicate on the
merits of the exception, save perhaps for the purpose of determining
whether there is any substance whatsoever in the exception as taken.
For that purpose I have scrutinised this exception, and I
cannot say
that the exception by itself is without substance.’
[7]
[14]
Given what has been pointed out above, I am persuaded that the fourth
and fifth grounds of complaint contained in Cane Time’s
notice
in terms of rules 23 and 30 cannot be regarded as having no
substance. Of course, it will be up to the court hearing the
exception itself to make a definitive finding in this regard.
Accordingly, I am able to conclude that summary judgment must be
refused on this ground.
[15]
I have dealt with Cane Time’s
points
in limine
in reverse order because the first follows to a certain extent upon
the second. Turning now to the contention that Mr Meyer lacked
the
requisite knowledge for purposes of rule 32(2), in
Stamford
Sales & Distribution (Pty) Ltd v Metraclark (Pty) Ltd
[8]
the Supreme Court of Appeal summarised the degree of knowledge
required for purposes of the subrule as follows:
‘
[9]
As pointed out in
Maharaj
v Barclays National Bank Ltd
1976
(1) SA 418
(A) at 423G-H one of the aids to ensure that the claim of the
plaintiff is unimpeachable and that the defendant’s defence
is
bogus or bad in law is that the verifying affidavit should be deposed
to by the plaintiff “or by someone who has personal
knowledge
of the facts”. If however, “the affidavit fails to
measure up to these requirements, the defect may, nevertheless,
be
cured by reference to other documents relating to the proceedings
which are properly before the Court. . . The principle is
that, in
deciding whether or not to grant summary judgment, the Court looks at
the matter ‘at the end of the day’ on
all the documents
that are properly before it. . .”
[10]
This court in
Dean
Gillian Rees v Investec Bank Limited
(330/13)
[2014] ZASCA
38
(28
March 2014), in dealing with the issue of whether personal knowledge
of all of the facts forming the basis for the cause of
action, had to
be possessed by the deponent to the verifying affidavit, said the
following in para 15:
“
As stated in
Maharaj
, ‘undue
formalism in procedural matters is always to be eschewed’ and
must give way to commercial pragmatism. At the
end of the day,
whether or not to grant summary judgment is a
fact-based
enquiry
. Many summary judgment applications
are brought by financial institutions and large corporations.
First-hand knowledge of every
fact cannot and should not be required
of the official who deposes to the affidavit on behalf of such
financial institutions and
large corporations. To insist on
first-hand knowledge is not consistent with the principles espoused
in
Maharaj
.” (My
emphasis.)
In
my view, as long as there is direct knowledge of the material facts
underlying the cause of action, which may be gained by a
person who
has possession of all of the documentation, that is sufficient.
[11]
The enquiry, which is fact-based, considers the contents of the
verifying affidavit together with the other documents properly
before
the court. The object is to decide whether the positive affirmation
of the facts forming the basis for the cause of action,
by the
deponent to the verifying affidavit, is sufficiently reliable to
justify the grant of summary judgment. Those high court
decisions
which have required personal knowledge of all of the material facts
on the part of the deponent to the verifying affidavit
are
accordingly not in accordance with the principles laid down by this
court in
Maharaj
.
[12]
An insistence upon personal knowledge by a deponent to a verifying
affidavit of all of the material facts forming the basis
for the
cause of action, where the cessionary of a claim seeks summary
judgment against the debtor, in most cases would effectively
preclude
the grant of summary judgment. The consequences of this narrow
approach is illustrated by the decision in
Trekker
Investments (Pty) Ltd v Wimpy Bar
1977
(3) SA 447
(W)
.
It was held that it had to appear from the verifying affidavit that
the facts relating to the claim of the cedent against the
debtor were
within the knowledge of the deponent who was able to swear positively
thereto. The deponent in such a case was prima
facie making the
affidavit on behalf of a cessionary and there was nothing in the
affidavit to indicate that the deponent had any
connection with the
cedent, which presumably would have enabled him to acquire this
knowledge. To insist on personal knowledge
by the deponent to the
verifying affidavit on behalf of the cessionary of all of the
material facts of the claim of the cedent
against the debtor,
emphasises formalism in procedural matters at the expense of
commercial pragmatism.’
[16]
In his affidavit in support of the application Mr Meyer alleged that:
‘
1.
I am the Chairman of the Board of Directors of the plaintiff…
and the facts herein contained are within my own direct
personal
knowledge and are both true and correct.
2.
I am duly authorised to depose to this affidavit on behalf of the
plaintiff and applicant and am the signatory on behalf of the
plaintiff to both the agreements of settlement and cession which are
annexures to the plaintiff’s particulars of claim.
3.
I hereby verify both the plaintiff’s cause of action and the
amount claimed by the plaintiff in its summons and particulars
of
claim.
4.
I can and do swear positively to the facts set out in the plaintiff’s
summons and particulars of claim.
5.
The defendant which is the respondent in this summary judgment
application is indebted to the plaintiff and applicant in the
amount
and on the grounds set out in the summons and particulars of claim…’
[17]
It is evident from the cession agreement itself that the source of
Mr Meyer’s knowledge of Cane Time’s alleged
indebtedness to ALD is based squarely on warranties furnished by ALD
to Tswalu. If Mr Meyer had himself been in a position
to verify
the cause of action based on his personal knowledge, such warranties
would presumably not have been necessary. Nor would
it have been
necessary to include clause 3.1 of the cession agreement which
provides that:
‘
The
Cedent shall deliver to the Cessionary all documents and/or
instruments that evidence title, or otherwise relate, to the Ceded
Rights on the Signature Date or forthwith after any such documents
and/or instruments come into existence…’
[18]
One of the annexures to the cession agreement is an email from
Mr Abelheim to Mr Arelisky dated 28 June 2018 in which
ALD gave
Cane Time ‘…
our authority to disclose details of your
supply contract with us…’
to Tswalu. In
Stamford
the deponent to the verifying affidavit declared that she was in
possession of, and fully conversant with, the contents of the
file
pertaining to the cession, including proof of the cessionary’s
claim against the cedent.
[19]
However in the present matter, despite the obligation imposed upon
ALD in clause 3.1 of the cession agreement, and the authorisation
furnished by ALD to Cane Time in the email of 28 June 2018,
there is no mention in Mr Meyer’s affidavit that he
has
perused documents and/or instruments evidencing title, or otherwise
relating, to the ceded rights. It would have been a simple
matter for
him to have made this allegation if that were the case. Moreover,
nowhere in Tswalu’s particulars of claim is
it alleged that
Mr Meyer himself represented it in concluding the agreement with
ALD in March 2018.
[20]
Given the aforegoing, I am not persuaded that the contents of Mr
Meyer’s affidavit, taken together with the other documents
properly before the court, are such as to enable me to conclude that
his positive affirmation is sufficiently reliable to justify
the
grant of summary judgment. For this reason also, the application must
be refused.
[21]
Turning now to costs.
Mr Dickerson SC
, who appeared for Cane
Time, urged me to refuse the application with costs on a punitive
scale as envisaged in uniform rule 32(9).
He submitted that Tswalu
clearly knew that Cane Time relied on a contention which would
entitle it to leave to defend before the
application for summary
judgment was launched. On the other hand,
Ms Grenfell SC
, who
appeared for Tswalu, submitted that there was nothing compelling to
indicate that there was any “culpable” conduct
on
Tswalu’s part in launching and persisting with the application.
[22]
That may have been the case had Cane Time failed to deliver its
notice in terms of rules 23 and 30 before Tswalu launched the
application. It seems, however, that Tswalu was entirely undeterred
thereby and that the actual purpose behind this application
was to
force Cane Time to depose to a defence on affidavit for tactical
purposes. Not only was Cane Time forced to do so, but it
had to raise
defences to a pleaded case which I have already accepted may well
turn out to be lacking in the averments necessary
to sustain a cause
of action. In these circumstances, I believe that a punitive costs
order is indeed warranted.
[23]
The following order is made:
1. The application for summary
judgment is refused with costs.
2. Such costs shall be paid on the
scale as between attorney and client, including the costs of two
counsel where employed, as well
as any reserved costs orders.
_______________________
J I CLOETE
[1]
Complaints were also made that the pleading is in various respects
vague and embarrassing, but for present purposes, it is not
necessary to consider these.
[2]
In terms of paragraph 4.1 of the particulars of claim ‘
FF
& E’
refers to
the furniture, fixtures and effects.
[3]
The reference to ‘
paragraph
4’
is meant to be a
reference to clause 4 thereof.
[4]
(25277/09) [2011] ZAWCHC126 (3 February 2011).
[5]
Referred to by Binns-Ward J at para [9]
supra
– at 314A.
[6]
Referred to by Binns-Ward J at para [8] – at 584.
[7]
The same approach appears to have been followed in
Gulf
Steel
and
Threeball
Construction
referred to
by Binns-Ward J at para [8].
[8]
(676/2013)
[2014] ZASCA 79
(29 May 2014).