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[2016] ZAECMHC 15
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MHB Construction CC v Alvopoint CC (2778/15) [2016] ZAECMHC 15 (12 April 2016)
IN THE HIGH COURT OF
SOUTH AFRICA
(EASTERN CAPE LOCAL
DIVISION, MTHATHA)
CASE
NO: 2778/15
In
the matter between:
MHB
CONSTRUCTION
CC
Plaintiff
and
ALVOPOINT
CC
Defendant
JUDGMENT
MBENENGE
J:
[1] On 13 July 2015 the
defendant acknowledged (in writing) being indebted to the plaintiff
in the capital sum of R441 452.30,
together with interest
thereon, at the plaintiff’s bank’s prime overdraft
interest rate calculated from September until
date of full and final
payment.
[2] The defendant
undertook, in terms of clause 4 of the acknowledgment of debt, to pay
the capital sum, together with interest
thereon, in six monthly
instalments with effect from 31 July 2015. The only amount paid
by the defendant to the plaintiff
pursuant to its undertaking was the
sum of R76 978.24, on or about 3 August 2015. Demand
notwithstanding, the defendant
failed to pay the remaining
instalments to the plaintiff, rendering the full balance of the debt,
including interest, in terms
of clause 9 of the acknowledgement of
debt, becoming due and payable.
[3] The instant
provisional sentence proceedings wherein the plaintiff seeks judgment
against the defendant in the sum of R367 867.92,
together with
interest thereon as aforesaid, were thereupon resorted to.
[4]
Pursuant to Rule 8(5) of the Uniform Rules of Court the defendant
delivered an opposing affidavit wherein it points, firstly,
to the
existence of a counter-claim against the plaintiff in the sum of
R1 232 590.80 arising from a business relationship
between
the parties relating to remedial construction work the plaintiff
allegedly did during the year 2014 and which gave rise
to a dispute
that in turn culminated in the launch of previous pending provisional
sentence proceedings, before this court, against
the defendant under
case number 1219/2015.
[1]
[5] In executing the
acknowledgment of debt and the relevant memorandum of agreement, so
the defendant’s case goes, the true
and proper intention of the
defendant was merely to delimit the extent of its liabilities on the
plaintiff’s claim instituted
against it under case number
1219/2015, and it was not the true and proper intention of the
defendant to abandon or waive the counterclaim
it has against the
plaintiff amounting to R1 232 590.80. The defendant
also threatens to bring proceedings for
the appropriate rectification
of the acknowledgment of debt so as to reflect the true common
intention of the contracting parties.
[6] In the second place,
because case no 1219/2015 is still pending, having not been disposed
of, the provisional sentence proceedings
are hit by
lis alibi
pendens
.
[7] At the hearing of
this matter the defence founded on
lis alibi
pendens
was not persisted in. It therefore remains for this court to
consider whether the defence grounded on the existence of the
alleged
counter-claim against the plaintiff passes muster.
[8]
Much as it is permissible for a defendant to raise a liquid or
illiquid counterclaim as a defence,
[2]
it is only in exceptional circumstances, and where a defendant
raising a counter-claim has established, on the affidavits filed
in
the provisional sentence proceedings, that the probabilities of
success are substantially in its favour, will a court postpone
provisional sentence proceedings pending the outcome of the
defendant’s counterclaim.
[9]
In the
Pretorius
case,
[3]
Henochsberg J put it
thus:
“…
provisional
sentence may be granted notwithstanding the fact that the defendant
has a counterclaim exceeding the amount of plaintiff’s
claim,
before the latter is decided and that the question as to whether
provisional sentence will or will not be granted depends
upon the
answer to the question as to whether the probabilities of success on
the counterclaim favour the defendant or not.”
[10] Let me now turn to
consider whether the defendant has provided any factual foundation
regarding the basis of the alleged counter-claim
or its proposed
prospects of success.
[11] The defendant has
contented itself with merely saying:
“
The
summons and the defendant’s opposing affidavit under Case No.
1219/2015 are both voluminous and
I
crave leave to have them admitted also in these proceedings by way of
this reference theret
o; they are
relevant also in this matter and the parties respective stances in
this matter are largely articulated those pleadings.
The court
file in the matter will be made available to this court at the
hearing of the instant proceedings and the plaintiff has
those
pleadings
. I reiterate and draw
particular attention to the contents of the defendant’s
opposing affidavit delivered under Case
No 1219/2015 where the
defendant contests the capital amount aimed by alleging payments made
amounting “to not less than
R564 680,87” and claims
the existence of a counterclaim available to the defendant amounting
to some R1 232 590,
80.”
(Emphasis
added.)
[12] In the light of the
excerpt quoted above, I was urged to consider the papers in case no
1219/2015 with which I was provided
and find that the counterclaim
enjoys prospects of success. In my view, that approach has no
legal basis.
[13]
In effect the defendant expects the Court to draw inferences or
conclusions from facts set out in a matter that is not serving
before
me. Not even an annexure to an affidavit is an integral part of
the affidavit.
[4]
[14] It was incumbent on
the defendant to pertinently make out a case for the counter-claim
contended for in the instant matter
so as to afford its adversary the
opportunity to refute the allegations in reply.
[15]
The following remarks by Joffe J in
Swissborough
Diamond Mines v Government of the RSA
[5]
setting out the law relating to the content of affidavits generally,
are apposite:
“
Regard
being had to the function of affidavits, it is not open to an
applicant or a respondent to merely annex to its affidavits
documentation and to request the court to have regard to it.
What is required is the identification of the portions thereof
on
which reliance is placed and an indication of the case which is
sought to be made out on the strength thereof.
[6]
[16] The above quoted
remarks were made in the context of affidavits in motion
proceedings. There is no reason why the principle
should not be
applied to provisional sentence proceedings, in so far as parties to
such proceedings do depose to and deliver affidavits.
[17] By merely referring
to papers in related proceedings and craving leave “
to have
them admitted also in these proceedings by way of this reference
thereto
” the defendant failed to discharge the evidentiary
burden resting on it to establish the existence of a counter-claim
that
enjoys prospects of success.
[18] In the result, the
following order is made:
(a)
Provisional sentence in the sum of R367 867.92, together with
interest thereon at the
plaintiff’s bank’s prime
overdraft interest rate, calculated from 1 September 2015 to date of
full and final payment,
is entered in favour of the plaintiff.
(b)
The defendant shall pay costs of the action incurred to date.
___________________________
S
M MBENENGE
JUDGE
OF THE HIGH COURT
Counsel
for the plaintiff
: Mr A C
Moorhouse
Instructed
by
Norton Rose Fulbright South Africa
JOHANNESBURG
C/O
Smith Tabata Inc
34
Stanford Terrance
MTHATHA
Counsel
for the defendant
: Mr J L
Hobbs
Instructed
by
Graham Mpeto & Associates
26
Madeira Street
MTHATHA
Date
heard
: 24
March 2016
Judgement
delivered
: 12
April 2016
[1]
In
the pending proceedings the plaintiff claims an amount of
R1 045 710.70 based on certain engineer certificates
[2]
Pretorius
v Weedon
1961 (3) SA 702
(N) at 711;
BOttico
Maccantca Italian v Photogrammetric Engineering (Pty) Ltd
1965 (2) SA 276
(D);
Durlop
South Africa Ltd v Orkaz (Pty) Ltd
1975 (l) SA 912 (W);
Lesotho
Diamond Works (1973) (Pty) Ltd v Lurie
1975 (2) SA 142
(O) at 145H;
Kanderssen
(Pty) Ltd v Medical Property Holdings Ltd
1977
(3) SA 445
(W);
Mao-Theia
v Neto
1981 (3) SA 829
(C);
Reichenberg
v Rontgen
1983 (3) SA 745
(W) at 750H;
HVD
Investments (Pty) Ltd v Neffke
1984 (2) SA 368
(W) at 372A.
[3]
Supra.
[4]
Port
Nolloth Municipality v Xhalisa & Others
1991 (3) SA (CPD) at 111.
[5]
1999
(2) SA 279 (T).
[6]
Ibid
at
324 F-G.