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[2017] ZAFSHC 60
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Changing Tides (Pty) Limited N.O. v Engelbrecht and Another (4078/2016) [2017] ZAFSHC 60 (20 April 2017)
SAFLII
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IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case
number: 4078/2016
In
the matter between:
CHANGING
TIDES (PTY) LIMITED N.O.
Applicant
and
NIEKIE
ENGELBRECHT
First
Respondent
[Identity number:
[7...]
SONETTE
ENGELBRECHT
Second Respondent
[Identity number:
[7...]
HEARD
ON:
9
FEBRUARY 2017
JUDGMENT
BY:
RAMPAI, J
DELIVERED
ON:
20 APRIL 2017
[1]
By agreement between the parties, the court, per Mbhele J, granted
the respondents, as the defendants, leave to defend the action
instituted by the applicant, as the plaintiff. The question of
costs was reserved for later adjudication. This judgment
concerns that sole issue.
[2]
The historical background will help to elucidate the issue.
2.1 On 3 August
2016 the applicant caused the summons to be issued against the
respondent;
2.2 On 9 September
2016 the sheriff served the summons;
2.3 On 20 September
2016 the respondents filed notice of intention to defend the action;
2.4 On 29 September
2016 the applicant applied for summary judgment.
[3]
The application was initially unopposed.
3.1 On 20 October
2016 the matter was on the unopposed court roll. Bokwa AJ
postponed it for a week. The costs
were for the respondents’
account.
3.2 On 27 October
2016 the matter was again on the unopposed court roll.
Molutsoane AJ postponed it for a week.
The costs stood over.
3.3 On 3 November
2016 the matter appeared on the unopposed court roll yet again.
Tsatsi AJ postponed it for six weeks.
The costs were to be
costs in cause. The respondents were ordered to file their
opposing affidavit before or on 25 November
2016.
3.4 On 25 November
2016 the respondents’ opposing affidavit was filed.
3.5 On 9 December
2016 the respondents’ heads of argument were filed. The
applicant had not filed its heads by
then in accordance with the
rules.
[4]
The application was now on the contested terrain. The events of
that phase are also significant. On 15 December
2016 the
application for summary judgment was on the opposed court roll.
Mbhele J was seized with the matter. The applicants’
heads of argument were still outstanding. By agreement between
the parties, the following order was made:
“
1.
The defendants are granted leave to defend the main action;
2.
Costs in respect of 15 December 2016 to stand over for adjudication
on 9 February 2017;
3.
Costs of the application to stand over for adjudication on 9 February
2017.
4.
Plaintiff/applicant to file heads of argument on/before 27 January
2017;
5.
Defendants/respondents to file supplementary heads of argument
on/before 3 February 2017.”
The
matter was then postponed for 56 days to 9 February 2017.
[5]
The application remained on the opposed court roll for the sole
purpose of having the unresolved issue of costs adjudicated.
5.1
On 27 January 2017 the applicants’ outstanding heads of
argument were ultimately filed in accordance with the court
order.
5.2
On 27 January 2017 the respondents’ supplementary heads of
argument were filed. They were filed seven days
before the
deadline, 3 February 2017, according to the court order.
5.3
On 3 February 2017 the first respondent filed his practice note.
5.4
On 8 February 2017 the applicants’ supplementary heads of
argument together with its practice note were filed.
[6]
On 9 February 2017 I was seized with the matter. Only the first
respondent was before me although leave to defend had
been granted to
both. Therefore, I shall say no more about the second
respondent. Having heard argument for and against
the awarding
of costs in favour of the applicant, I reserved judgment. This
completes my synopsis of the historical background
of the
application. Ms Olivier, counsel for the respondent, submitted
that the applicant had presented an incorrect exposition
of the
factual background. I do not wish to labour the argument save
to say there was substance in the critique.
[7]
The sole issue that I am called upon to adjudicate is whether I
should make a cost order adverse to the applicant.
[8]
Mr Hendriks, counsel for the applicant, submitted, that although the
allegations made by the respondent were just enough to
satisfy the
requirements of Rule 32(3) with regard to the nature and the grounds
of the defence raised, there still remained one
great difficulty.
The opposing affidavit, counsel contended, lacked particularity
regarding all material facts relied upon.
In his opinion, the
respondent’s opposing affidavit fell short of what the rule
required to enable the court to assess their
bona fides
.
[9]
The applicant decided on 15 December 2016 not to procede with its
application for summary judgment. It is important to
note that
the applicant took such a decision 20 days after the respondent had
filed his opposing affidavit. On 15 December
2017 Mbhele J
granted the respondents leave to defend the action. She did so
with the consent of the applicant. This
was a material
consideration.
[10]
The applicant proferred no sound explanation as to why it persisted
for so long with its determination to obtain summary judgment
against
the respondent. It cannot be that the applicant became aware of
the merits of the respondent’s
prima facie
defence for
the very first time on 15 December 2016. It is not unreasonable
to say that, by the exercise of reasonable diligence,
the applicant
should, within seven days after the respondent had served his
opposing affidavit, have become aware of the substantive
merits of
his opposition.
[11]
As regards the postponed of 15 December 2016, the circumstances were
simple and straight forward. The application was
supposed to be
finalised on 15 December 2016 by Mbhele J but it was not.
Although leave to defend was granted to the respondent
on that day,
the application was postponed to deal with reserved costs of three
previous postponements. I have to mention
that the applicants’
heads of argument were not filed in accordance with the rules.
As on 15 December 2016 they were
still outstanding. Whereas the
respondent was ready to argue on that day the applicant was not.
Because of the applicant’s
state of unreadiness the application
had to be postponed yet again. Mbhele J ordered that it be
argued on 9 February 2017;
that the applicant’s heads of
argument be filed by no later than 27 January 2017; that the
respondent’s supplementary
heads of argument be filed by no
later than 3 February 2017 and that the costs of that day be
adjudicated on 9 February 2017.
[12]
In the light of those circumstances, it is clear and obvious that the
postponement of 15 December 2016 was the necessary consequence
of the
applicant’s unpreparedness. I would, therefore, award the
wasted costs occasioned by such postponement in favour
of the
respondent.
[13]
As regards the postponement of the application on 3 November 2015 the
order by Tsatsi AJ becomes relevant. The application
was
removed from the unopposed roll of the day; it was postponed to
the opposed roll of 15 December 2016; the respondent
was called
upon to file his opposing affidavit before 26 November 2016 and the
cost of the postponement were reserved as cost in
cause.
[14]
The aforesaid order was precipitated by the respondent’s notice
of intention to oppose filed 4 days earlier, on 29 October
2016 to be
precise. The order was obviously sought and obtained by mutual
agreement between the parties even though that
was not apparent on
the face of the order itself.
[15]
It has to be accepted, therefore, that the parties agreed beforehand
that the cost of the postponement be reserved in favour
of the party
that would emerge successful as far as the application for summary
judgment was concerned. Put differently,
the parties
contemplated that the outcome of the contested application would
naturally and automatically determine which party
would be entitled
to the cost of the postponement.
[16]
The cost reserved on 3 November 2016 have to follow success.
Seeing that the respondent ultimately emerged victorious
on 15
November 2016, he is entitled to reap the fruit of his success.
The fruit of the postponement reserved as cost in cause
on the day in
question ripened six weeks later when the respondent was granted
leave to defend the action.
[17]
It was certainly the outcome of the application and not the action
which was within the common contemplation of the parties
at the time
the cost of the postponement were reserved as cost in cause.
Ordinarily the legal phrase “cost in cause”
is used in
connection with interlocutory proceedings where main proceedings
remain on course irrespective of the outcome of such
interlocutory
proceedings. In this instance, the main proceedings were not on
course. The applicant did not want the
matter to proceed that
far. The respondent wanted that avenue to be opened. The
applicant wanted that avenue to remain
shut.
[18]
Neither Mr Hendriks nor Ms Olivier submitted that the cost of the
postponement were reserved as cost in the cause of the action.
I merely ventured to debate with myself in order to clarify the
point. It has to be accepted, therefore, that the parties
envisaged that the outcome of the application would determine which
party was liable to bear and pay the cost of the postponement
of 3
November 2016.
[19]
In arriving at this conclusion, I am also fortified by the order made
on 15 December 2016. On that day the respondent
was granted
leave to defend the action. In such a scenario, it is customary
to reserve the costs of an application for summary
judgment as cost
in cause. But that was not the case here. Here the parties
expressly elected to have the cost of the application
adjudicated up
front. Mostly important, they specifically mentioned the cost
relative to the postponement of 15 December
2016. They said
nothing about those of previous postponement. It was
understandable. They had already agreed
about those cost six
weeks earlier.
[20]
In the light of those considerations, I am inclined to award the cost
of the postponement of 3 November 2016 to the respondent.
[21]
As regards the postponement of 20 October 2016 the order by Bokwa AJ
becomes relevant. He postponed the application for
a week but
reserved no cost. According to the order, the cost occasioned
by the postponement are supposed to be borne and
paid by the
respondent.
[22]
The aforesaid remains in force. I have no jurisdiction to
reconsider it let alone to set it aside. Therefore, the
respondent is liable to pay the applicant’s cost in terms of
the order in question.
[23]
As regards the postponement of 27 October 2016, the order by
Molutsoane AJ in the motion court becomes relevant. The
application was postponed for a week. The cost of the
postponement stood over.
[24]
At the time, there was nothing filed to indicate that the respondent
intended to oppose the application for summary judgment.
However, the application was not heard on 27 October 2016 but was
simply postponed to 3 November 2016. Still it remained
on the
unopposed roll. On 3 November 2015 it became clear that the
respondent intended opposing the application. The
deadline for
the filing of the opposing affidavit was then fixed.
[25]
As earlier pointed out, the application was filed on 29 September
2016 and the opposing affidavit on 25 November 2016, some
57 days
later. In the respondent’s heads of argument that period
of almost two months was underplayed.
“
The
gist of the First Respondent’s contentions are that the
Affidavit Resisting Summary Judgement had been filed
25
November 2016
just short of
three
(3) weeks
prior to the date scheduled for the hearing of the opposed motion.”
The
contention creates the impression that the first date scheduled for
the hearing of the application was 15 December 2016 and
that the
respondent’s opposing affidavit was filed almost three weeks
before such an important date.
[26]
The contention was, however, not consistent with the respondent’s
own averment. At par 3.2 the respondent averred:
“
The
application for summary judgment was to be heard by the above
Honourable Court on
03
November 2016
.”
Now
according to respondent’s own say-so, on 27 October 2016
Molutsoane AJ postponed the application for summary judgment
to 3
November 2016 for argument. The application could not be argued
on 3 November 2016 primarily because the respondent
had failed to
file the opposing affidavit in terms of the rule.
[27]
The respondent subsequently explained his failure some 22 days
later. He said:
“
Up
until date on which the application was to be heard my attorney of
record, on my behalf, attempted to negotiate with the Applicant
in
order to limit litigation costs and to avoid unnecessary costs and so
as to not waste the courts time, said negotiations however
on the day
the matter was to heard failed and was my attorney of record informed
that the Applicant will be persisting in (sic)
the Application for
summary judgment on
03
November 2016
;
At
which stage my attor
ney
of record instructed counsel and proceeded to oppose the application
at court on the day, however an agreement was reached between
the
parties and as is evident from the Court order dated
03
November 2016
,
and was it ordered that the matter be postponed to the opposed roll
on
15
December 2016
and that
I
file my opposing affidavit on/before
25
November 2016
”.
The
postponement of the application on 3 November 2016 for 42 days was,
in my view, occasioned by the respondent’s exclusive
neglect to
play the game according to the rules of procedure. It was not
his case that the parties had, by mutual agreement,
consented to
relax the operation of the rules in order to entertain the alleged
negotiations. It would, therefore, appear
that the respondent
did so on his own accord. However noble his intentions were, he
did so at his own peril.
[28]
I repeat that the application was filed on 29 September 2016.
Molutsoane AJ was seized with the application 28 days later,
on 27
October 2016. Instead of immediately filing the opposing
affidavit to resist the grant of summary judgment, the respondent
disobeyed the rule and embarked on some negotiations with the
intention of limiting litigation cost. Had he filed his
opposing
affidavit in accordance with the rule, the chances were that
the application would probably not even have been placed on the
unopposed
roll on 27 October 2016. In which event it would
probably have been enrolled on the opposed roll and argued on 27
October
2016. I have demonstrated that there were inordinate
delays concerning the hearing of this summary judgment application.
For this particular one, the respondent was certainly to blame.
[29]
Given the circumstances which prevailed for 27 days prior to the
postponement of 27 October 2016, I am of the firm view that
the
reserved cost of that postponement have to be borne and paid by the
respondent.
[30]
As regards the general cost of summary judgment application, two
dates are relevant. The first was 29 September 2016,
being the
date on which these summary proceedings were initiated. The
second was 9 February 2017, being the date on which
the issue of cost
was argued. This then is the remaining aspect of the issue I am
called upon to adjudicate.
[31]
In his opposing affidavit the respondent denied the applicant’s
allegations that he had no
bona
fide
defence to the applicant’s action; that he entered
appearance to defend for the sole purpose of delaying the action
and
that it would serve no practically useful purpose to let him defend
the action. The respondent did not deny the applicant’s
claim as such. Although he admitted his indebtedness to the
applicant, he averred that he was declared to be over-indebted;
that a debt restructuring order “anx oa1”, was granted by
the local district court on 11 March 2010 and that the applicant
unsuccessfully applied to have such order rescinded as fully set out
in the court order, “anx oa2”, dated 24 July 2015;
that he continued to comply with the debt restructuring order and
that the applicant was aware, all along, that he was not in arrears
as alleged in the applicant’s summons.
[32]
The respondent’s defence was certainly based on facts by virtue
of which material facts alleged by the applicant were
disputed.
Moreover, new facts constituting a defence are alleged. Where,
as in this case, the court faces such a factual
conflict, the court
neither attempts to decide the issues nor attempts to determine
whether or not there was a balance of probabilities
in favour of the
one party or the other. All that the court has to enquire into
is, firstly, whether the defendant has ‘fully’
disclosed
the nature and grounds of his defence as well as the material facts
upon which it is grounded, and secondly, whether
on the facts so
disclosed the defendant appears to have, as to either the whole or
part of the claim, a defence which is
bona
fide
and good in law.
Tesven
CC & Another v South African Bank of Athens
2000 (1) SA 268
(SCA) pars [19] and [22].
[33]
The principle is that if the court is satisfied on those cardinal
indicators, it has to refuse summary judgment. In the
instant
matter I do not have to embark on such arduous enquiry. This is
so because the applicant implicitly conceded on 15
December 2016 that
summary judgment could not, on the facts, be granted. The
respondent has already been granted leave to
defend with the express
consent of the applicant. Consequent it was no longer open to
the applicant to contend that the respondent’s
opposing
affidavit fell short of what the rule required. By consenting
to the grant of leave to defend, the applicant implicitly
admitted
that the respondent’s
bona
fides
were beyond reproach.
[34]
The question which now arises is whether the applicant with all the
knowledge it had of the respondent’s defence and
the material
facts upon which it is grounded, should or should not have applied
for summary judgment. It seems to me that
there was nothing
new, about the respondent’s defence and the material facts upon
which it is grounded, which applicant now
knows which it did not know
before it brought this summary judgment application. Its change
of heart on 15 December 2016
tends to strengthen this view.
Such backtracking was belated. I am of the view that the
question has to be answered
in the negative. With the knowledge
the applicant had or ought to have had, the applicant should not even
have thought of
bringing such an application at all as was done on 29
September 2016.
[35]
It will be readily appreciated that there was a causal correlation
between the launch of the summary judgment application on
29
September 2016 and the rendering of argument on 9 February 2017.
The argument was the necessary consequence of the ill-conceived
launch. It follows, as a matter of logic, that if I am correct,
the applicant has to be held liable for the respondent’s
cost
in respect of both dates.
[36]
Usually the winner takes it all. However, there was no outright
winner in this contest for cost. On the facts,
none of the
parties was the sole cause of the wasted cost occasioned by the
postponements. Consequently it would not be fair,
just and
equitable for any of them to be held exclusively liable for the
payment of the entire cost of the application and its
postponements.
[37]
Accordingly I make the following order.
37.1
The reserved costs of the following postponements shall be borne and
paid by the respondent:
(a)
Thursday 20 October 2016
(b)
Thursday 27 October 2016
37.2
The cost of the postponement reserved on the following dates shall be
borne and paid by the applicant.
(a)
Thursday 3 November 2016 and
(b)
Thursday 15 December 2016.
37.3
The general cost of the summary judgment application, relative to 29
September 2016 and 9 February 2017,
shall be borne and paid by the
applicant.
____________
MH
RAMPAI, J
On
behalf of applicant:
Adv. CJ Hendriks
Instructed
by:
Strauss Daly Inc
Bloemfontein
On
behalf of 1
st
respondent: Adv. I Olivier
Instructed
by:
Shardelow Smith
Bloemfontein