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[2017] ZAKZPHC 69
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Leira Investments CC t/a Auto Stop Service Station v Osmans Taj Mahal Brands CC (AR666/16) [2017] ZAKZPHC 69 (17 November 2017)
IN THE HIGH COURT
OF SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
Case
No: AR666/16
In
the matter between:
LEIRA
INVESTMENTS CC
t/a
APPELLANT
AUTO
STOP SERVICE STATION
and
OSMANS TAJ MAHAL
BRANDS CC
RESPONDENT
JUDGMENT
Delivered
on
17
November 2017
POYO
DLWATI J:
[1]
The question to be answered in this appeal is whether the learned
magistrate erred in finding that the appellant’s claim
against
the respondent for the fuel products sold and supplied to the
respondent was
res
judicata
as the parties had previously obtained a court order by consent
between them subsequent to them having agreed to settle the matter.
[2]
The background to the matter is that the appellant, also the
plaintiff in the court
a
quo
,
was the supplier of fuel products in the Durban region. The
respondent, also the defendant in the court
a
quo
,
was one of the appellant’s customers with their relationship
dating back to 2004. During September 2013, the appellant instituted
an action against the respondent under case no 44207/13 for payment
of the sum of R85 139.30 arising from fuel products sold and
supplied
to the respondent. It is common cause between the parties that on the
date of trial of that matter, being 23 April 2014,
the parties
entered into settlement negotiations and ultimately a settlement was
reached.
[3]
As a result of such settlement the legal representatives of the
parties approached the learned magistrate presiding over the
trial
and sought an order by consent. An order in the following terms was
granted by the learned magistrate:
‘
It
is agreed by Advocate A Moodley instructed by Ayoub Kadwa &
Company and Mr R Naidoo that the matter has been settled.
That
the defendant to pay the plaintiff an amount of R24 438 plus costs in
agreed sum of R5000. Payment to be made on or before
12 May 2014. The
settlement is hereby made an order of court in terms of Rule 27(4) of
the Magistrates Court Rules.
’
[4]
Subsequent to the settlement, various exchange of correspondence
ensued between the appellant’s and the respondent’s
legal
representatives about the balance of the appellant’s claim.
Nothing turned on the correspondence and on 4 September
2014 the
appellant issued summons against the respondent for payment of the
sum of R53 133.40 for fuel products sold and supplied
to the
respondent. In its particulars of claim at paragraph 5.2 and 5.3, the
appellant averred as follows:
‘
5.2
On 23 April 2014, and under case number 44207/13, in terms of a
consent order, the defendant was ordered to pay the plaintiff
the sum
of R24 438.60 together with costs in the agreed sum of R5000 on or
before 12 May 2014.
5.3
The said sum of R24 438.80 is excluded from the figures referred to
in Annexure “A” hereto. A copy of the court
order issued
by the Durban Magistrate Court on 23 April 2014 is annexed hereto
marked “B”.’
[5]
The respondent defended the action. It raised a special plea of
res
judicata
on the basis that the same matter had been settled before Ms Mnyandu,
the Magistrate who presided over the matter on 23 April 2014,
after
the settlement agreement entered into by the parties was made an
order of court. It further alleged that as the respondent
had
effected payment in terms of that settlement agreement, the
appellant’s claim had been extinguished or alternatively
compromised and therefore the appellant had no further right to claim
any amount from the respondent or to institute another claim
for the
same amount that had been claimed under case number 44207/2013.
[6]
The appellant replicated and averred that the amount of R53 133.40
claimed in the current action was specifically excluded from
the
amounts claimed under case no. 44207/2013. It further averred that
each amount of fuel product purchased by the respondent
from the
appellant constituted a separate and distinct transaction between the
parties. It therefore denied that the claim was
res
judicata
.
The matter was set down and it was agreed that the court would only
deal with the special plea.
[7]
It was agreed between the parties that the respondent bore the onus
during the hearing of the special plea. No witnesses were
called on
behalf of the respondent. The respondent’s legal representative
advised the court that he had hoped to call Adv
Moodley, who had
dealt with the matter when it was previously settled, to testify on
behalf of the respondent but she had advised
him that she was not
available. As a result only argument was presented on behalf of the
respondent.
[8]
On the other hand, Mr Rajan Naidoo, the attorney that represented the
appellant previously when the settlement was reached,
testified on
behalf of the appellant. His evidence, in summary, was that on the
date of trial for case no. 44207/2013, being 23
April 2014, the
appellant had failed to discover timeously various fuel slips that
pertained to the computation of that claim.
It was then agreed
between himself and Advocate Moodley representing the respondent that
the appellant would only pursue its claim
based on the undisputed
vouchers that appeared on the initial discovery affidavit and on
those vouchers which were discovered late
but the respondent had not
been prejudiced by such late discovery.
[9]
He testified that it was also agreed between him and Advocate Moodley
that after going through the exercise of identifying those
agreed
vouchers, which appear at pages 37A to 37E of the record, all the
disputed amounts which made up the balance of that claim
would form
part of a separate and new action that could be launched by the
appellant if no settlement was reached by the parties.
He added that
the respondent’s attorney who had briefed Advocate Moodley when
these discussions were held was also present
in court.
[10]
It was only after those discussions that the learned magistrate was
approached and advised that the matter had been settled.
The terms of
the settlement were recorded as reflected in the order of 23 April
2014 referred to in paragraph 3
supra.
It was for these reasons, so he testified, that the previous
settlement did not relate to the whole sum of R85 139.30. He
testified
that it was for those reasons that he sent the letter dated
9 May 2014 to the respondent’s attorney, which was shortly
after
the settlement had been reached, advising them that they must
advise him of their dates of availability with the respondent so as
to consult and review documents pertaining to the balance of the
appellant’s claim. In response to that letter, he testified,
the respondent’s attorney in his letter dated 13 May 2014
requested copies of the documents pertaining to the balance of
the
appellant’s claim in order to do a reconciliation prior to the
meeting with the appellant’s legal representatives.
[11]
Mr Naidoo’s evidence was that this meeting had been agreed upon
during the settlement negotiations so that if parties
agreed on the
amounts and vouchers, then there would be no need for a new action to
be launched. However, because there was no
settlement reached for the
outstanding amount, this action had to be launched as contemplated.
Under cross-examination, he conceded
that there was nothing in the
court order that indicated that the settlement was a partial
settlement of that claim. In his view,
he testified, the matter was
not partially settled as it was settled on certain terms. When asked
if it was open to the appellant
to again set down for trial the
matter under case no. 44207/2013 in view of the fact that there was
an outstanding amount, his
view was that it was not, as that was not
part of the settlement agreed to.
[12]
His evidence was that the appellant’s claim at that stage was
reduced by R24 438 hence the matter could not be set down
again for
trial. He also conceded that the word ‘reduced’ did not
appear on the consent order. His explanation was
that in his
experience as an attorney for 19 years, it was not the norm that the
magistrate would record all details of the settlement,
but only the
gist of the agreement would be recorded. He further conceded that
some of the amounts in the current claim had appeared
in the previous
claim but explained that these were the unsettled ones. After
argument, the learned magistrate upheld the special
plea hence this
appeal.
[13]
The argument on behalf of the appellant by Mr
Moosa
on
appeal was that as each fuel slip was a different transaction, the
learned magistrate erred in finding that the appellant’s
claim
was
res
judicata
as those transactions claimed were never adjudicated upon. It was for
those reasons that the appellant’s legal representatives
sent
the respondent’s legal representatives the letter of 9 May 2014
and hence the response requesting for copies of documents
prior to
the meeting. It was argued that those letters were clear indications
that the appellant’s claim was not entirely
settled and the
respondent’s response was an acknowledgment of that assertion.
[14]
It was further submitted that Mr Naidoo’s evidence was not
challenged during cross-examination and was not rebutted either.
On
the other hand, Mr
Vawda
,
on behalf of the respondent, submitted that as no notice was filed to
withdraw some of the claims by the appellant in terms of
Rule 27 (5),
the claim remained
res
judicata
as it was settled in terms of the court order. It was further
submitted that the consent order did not make any reference to the
settlement negotiations and to what was agreed in those negotiations.
For that reason, the parties were bound by the consent order
as the
appellant had never questioned the correctness of that order. Mr
Vawda
therefore supported the learned magistrate’s judgment.
[15]
The underlying rationale of the doctrine of
res
judicata
is to give effect to the finality of judgments. Where a cause of
action has been litigated to finality between the same parties
on a
previous occasion, a subsequent attempt by one party to proceed
against the other party on the same cause of action should
not be
permitted. It is an attempt to limit needless litigation and ensure
certainty on matters that have been decided by the courts.
[1]
In
Hyprop
Investments Ltd and others v NSC Carriers and Forwarding CC and
others
[2]
the
court held that the strict requirements for a plea of
res
judicata
should not be understood literally in all circumstances and applied
as an inflexible or immutable rule. With all this in mind,
was the
appellant’s claim
res
judicata
?
[16]
Mr
Moosa
conceded that the court order of 23 April 2014 was binding on the
parties. He submitted, however, that the various transactions
(the
undiscovered fuel slips) were never adjudicated upon and therefore
cannot be
res
judicata
.
These were reflected on pages 37A to 37 D of the record where some
amounts were ticked and others not. Furthermore, Mr Naidoo’s
evidence was never challenged in this regard. I agree with Mr
Moosa
that as no witness testified on behalf of the respondent, Mr Naidoo’s
evidence in this regard and about the prior agreement
before
obtaining the court order remains unchallenged as it was not
rebutted.
[3]
If those claims
were never adjudicated upon, then they can never be said to be
res
judicata
if
one applies the above principles.
[17]
Furthermore, it was common cause between the parties before the court
a
quo
that each transaction of sale of a fuel product by the respondent to
the appellant was a separate cause of action. In my view,
that was so
because each amount had to be proved in order to support the
appellant’s right to judgment.
[4]
In that event, the amounts that were not ticked on pages 37 A-D of
the record, as per Mr Naidoo’s evidence, remained
unadjudicated.
Those causes of action have not been brought to
finality and cannot be said to be
res
judicata.
For these reasons the appeal ought to succeed.
[18]
On the issue on whether there was a prior agreement before the court
order was obtained, my view is that the failure by the
respondent to
call Advocate Moodley or the attorney that represented the respondent
previously leads one to draw an inference that
the only reason they
were not called or they refused to testify was because they would
have agreed with Mr Naidoo’s evidence.
This, therefore, means
that whilst the appellant’s claim, in the absence of the oral
agreement, and on the strength of the
consent order only, might have
been
res
judicata
,
this, however was not the case because of the reasons advanced above
and because of the agreement reached between the parties’
legal
representatives before the consent order was taken.
[19]
That there was an agreement is supported by the appellant’s
letter of 9 May 2014 to the respondent’s attorney calling
for a
meeting to sort out or resolve the balance of the appellant’s
claim. The respondent’s legal representative did
not at that
stage dismiss the appellant’s legal representative’s call
for a meeting as he ought to have done so if
there was no prior
agreement. He agreed to a meeting and called for documents because
this was as per their agreement as testified
to by Mr Naidoo.
[20]
On the issue as to whether those claims had been withdrawn by the
appellant in terms of Rule 27 (5) of the Magistrate’s
Court
Rules, my view is that the evidence does not support this submission
as it was not Mr Naidoo’s
evidence
that the claims had been withdrawn.
[21]
In my view, therefore, the learned magistrate erred in finding that
the Appellant’s claim was
res
judicata
in the face of Mr Naidoo’s unchallenged evidence about a prior
agreement. Furthermore, as held in
Molaudzi
supra
,
[5]
there can be no legitimacy in a legal system where final judgments,
which
would
result in substantial hardship or injustice, are allowed to stand
merely for the sake of rigidly adhering to the principles
of
res
judicata.
Order
[21]
Accordingly, I make the following order:
‘
the
appeal is upheld with costs’.
________________
POYO
DLWATI J
I
agree and it is so ordered
________________
MADONDO
DJP
APPEARANCES
Date
of Hearing: 08 September2017
Date
of Judgment: 17 November 2017
Counsel
for Appellant: Mr Moosa
Instructed
by: Naidoo & Co Inc
c/o
Vathers Attorneys
Counsel
for Respondent : Mr Vawda
Instructed
by : Omar Attorneys
c/o
Bhamjee Attorneys
[1]
See
Molaudzi
v S
2015 (8)
BCLR 904
(CC) para 16
[2]
Hyprop Investments Ltd and
others v NSC Carriers and Forwarding CC and others
2014 (5) SA 406
(SCA) para 14
[3]
President of the Republic of South Africa and
others v South African Rugby Football Union and others
2000 (1) SA 1
(CC) para 61.
[4]
See
Evins
v Shield Insurance Co Ltd
1980 (2) SA 815
(A) at 838E-G
[5]
See para 37