About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: North Gauteng High Court, Pretoria
SAFLII
>>
Databases
>>
South Africa: North Gauteng High Court, Pretoria
>>
2016
>>
[2016] ZAGPPHC 308
|
|
Agua Capital (Pty) Ltd v Corlink Twenty Five (Pty) Ltd and Others (77107/2014) [2016] ZAGPPHC 308 (1 March 2016)
IN THE HIGH COURT
OF SOUTH AFRICA
(GAUTENG DIVISION,
PRETORIA)
CASE NO: 77107/2014
DATE: 1 MARCH 2016
In the matter
between
AGUA CAPITAL (PTY)
LTD
.....................................................................................................
Plaintiff
And
CORLINK TWENTY FIVE
(PTY)
LTD
......................................................................
First
Defendant
PETRUS VAN
EEDEN
...............................................................................................
Second
Defendant
GREENBRIDGE GROUP
(PTY)
LTD
.......................................................................
Third
Defendant
JUDGMENT
[1] This is an
exception by the third defendant to the plaintiffs particulars of
claim on the basis that they are vague and embarrassing.
The third
defendant also seeks security for costs against the plaintiff.
[2] The plaintiff is a
company with limited liability with Registration No 2012/069018/07,
registered in terms of the provisions
of the Companies Act 71 of 2008
(“the Act”). The plaintiffs address for purposes of this
action is care of MacRobert
Inc of MacRobert Building, corner Justice
Mahomed and Jan Shoba Streets, Brooklyn, Pretoria, Gauteng Province.
[3] The third defendant
is a company with limited liability with Registration No
2001/0266354/07, registered in terms of the Act.
The third
defendant’s address for purposes of this action is care of
Coetzee Attorneys, 679 Koedoeberg Road, Faerie Glen,
Pretoria,
Gauteng Province.
EXCEPTION
[4] In paragraphs 21-24
of the plaintiffs particulars of claim, the plaintiff alleges the
following:
“21. The first
defendant breached the first loan agreement by failing to pay the sum
of R2,262,557.00 on 28 February 2014
and breached the second loan
agreement by failing to pay the outstanding amounts in the sum of
R2,192,738.00 on or before 31 May
2014.
22. The third defendant
was aware of the abovementioned cessions at all relevant times and of
the aforementioned breaches as the
time they occurred (sic).
23. In breach of the
first and second cession agreements, the Third Defendant made the
following payments to the First Defendant
in terms of Safex
agreements referred to in paragraphs 18.1 and 18.2 above:
23.1 On 13 March 2014
the sum of: R500,000.00
23.2 On 19 March 2014,
the sum of: R800,000.00
23.3 On 28 March 2014,
the sum of: R250,000.00
23.4 On 28 March 2014
the sum of: R77.821.30
23.4 On 28 March 2014,
the sum of: R299,518.58
TOTAL R1,927,339.88
In the circumstances
the Third Defendant was/is obligated to pay the sum of R1,927,339.88
to the Plaintiff, which it failed to do.”
[5] The complaint is
that the plaintiff has failed to allege how the third defendant came
to know about the purported cessions and
that the plaintiff does not
allege when the third defendant was made aware of the above mentioned
cessions. The excipient's further
complaint is that it is not pleaded
who represented the third defendant when the third defendant was made
aware of the purported
agreements of cession. Thus, the third
defendant cannot meaningfully plead due to lack of particularity.
[6] The plaintiff,
furthermore, fails to plead how, where and when and who on behalf of
the third defendant was made aware of the
breaches of the two loan
agreements allegedly committed by the first defendant. In the result,
the third defendant states that
the only part that remotely attempts
to found a cause of action against the third defendant is the
following:
“the third
defendant was aware of the abovementioned cessions at all relevant
times and of the aforementioned breaches as
the time they occurred
(sic)."
[7] The
respondent’s/plaintiff’s counter argument to the above is
that the third defendant’s/excipient’s
complaints are
questions of evidence. As to who, when and where the third defendant
became aware of the cessions and the breaches
in question are not
material facts. According to the plaintiff, what constitutes a
material fact is the third defendant’s
knowledge of the
cessions and the first defendant’s breaches of the loan
agreements.
[8] Rule 23(1) reads as
follows:
“Where any
pleading is vague and embarrassing or lacks averments which are
necessary to sustain an action or defence, as the
case may be, the
opposing party may, within the period allowed for filing any
subsequent pleading, deliver an exception thereto
and may set the
matter down for hearing in terms of paragraph (f) of subrule (5) of
rule (6): provided that where a party intends
to take exception that
a pleading is vague and embarrassing he shall within the period
allowed as aforesaid by notice afford his
opponent an opportunity of
removing the cause of complaint within 15 days: provided further that
the party excepting shall within
10 days from the one which a reply
to such notice is received or from the date on which such reply is
due deliver his exception
[9] In Jowell v
Bramwell-Jones
1998 (1) SA 836
(W) at 899 G, it was held that an
exception to a pleading on the grounds that it is vague and
embarrassing is not to be directed
at a particular paragraph within
the cause of action; it goes to the whole cause of action which must
be demonstrated to be vague
and embarrassing.
[10] In terms of Rule
18(4) of the Uniform Rules of Court,
"every pleading
shall contain a clear and concise statement of the material facts
upon which the pleader relies for his claim,...
with sufficient
particularity to enable the opposite party to reply thereto”.
(own underlining)
[11] In casu the
following is stated at page 24 at paragraph 18 titled “THE
PLAINTIFF’S CLAIM AS AGAINST THE THIRD DEFENDANT,
“18.1 That on 18
December 2013 and at Pretoria, the First Defendant represented by Mr
Van Eeden and the Third Defendant represented
concluded a written
agreement in terms of which the First Defendant sold to the Third
Defendant 475 metric tons soya beans at a
price of R5,280.00 per
metric ton, which soya beans had to be delivered from 1 May to 30 May
2014. A copy of this agreement which
is numbered E74345 is annexed as
'AS’.
18.2 On 24 January 2014
and at Pretoria, the First Defendant and the Third Defendant (as
represented above) concluded a further
written agreement in terms of
which the First Defendant sold to the Third Defendant 375 metric tons
of soya beans at a price of
R6,100.00 per metric ton, which soya
beans had to be delivered from 1 February to 28 February 2014. A copy
of this agreement which
is numbered E7452 is attached as ‘A6’.”
[12] From paragraph 19
to 21 of the amended particulars of claim, in relation to the claim
against the third defendant, the contents
of the paragraphs are
almost entirely about the plaintiff and the first defendant's cession
agreements. The contents are also about
the first defendant’s
breaches. There is no mention of the third defendant’s
involvement in the cessions in any of
the said paragraphs and/or even
in the contracts between the first defendant and the plaintiff. At
page 80, paragraph 14, titled
uCession and Assignment”, the
following is stated:
“14.1 The lender
may cede or assign any or all of its rights in terms of this
Agreement to a third party or third parties,
without notice of such
cession or assignment being given to the borrower.
14.2 To the extent that
any cession or assignment by the Lender results in a splitting of
claims, the Borrower hereby consents to
such splitting.
14.3 The Borrower shall
not pledge, assign, transfer, make over, hypothecate or in any way
alienate or Encumber all or any of its
rights, benefits, interest
and/or obligations under this Agreement to any person without the
prior written consent of the Lender”
[13] The above are the
only statements relating to the cession in the entire pleadings
except for the following statement:
“The third
defendant was aware of the abovementioned cessions at all relevant
times and of the aforementioned breaches as
the time they occurred
(sic)".
[14] Having carefully
considered the pleadings, I agree they contain a statement to the
effect that the third defendant was aware
of the cessions and the
breaches at the time they occurred. However, the material facts upon
which the pleader relies for his claim
are not pleaded with
sufficient particularity to enable the third defendant to reply
thereto. In my view, there is no intelligible
link regarding the
cession, pleaded against the third defendant leading to it owing the
plaintiff. To assist the third to plead.
It is apparent that the
material fact relied upon is that the third defendant was aware of
the cession. Upon reading the whole
claim against the third defendant
as well as reading the claims against the two other defendants, the
alleged basis of awareness
should at least have been pleaded.
[15] I find that the
particulars of claim are vague and embarrassing to the extent of
causing prejudice to the third defendant.
COSTS
[16] The third
defendant has argued for costs with costs of senior counsel. It is
trite law that costs follow the result. In casu,
save for the factor
of the claim amount, I do not understand on which other basis such
costs should include the costs of a senior
counsel. The nature of the
subject matter of this exception was not complex or one which
required the special skills of senior
counsel. In my view, any
practising legal practitioner should have been able to argue this
matter. Accordingly, I decline to exercise
my discretion in this
regard.
SECURITY FOR COSTS
[17] For purposes of
the application for security for costs, the applicant’s/third
defendant’s address is its principal
place of business situated
at 878 Rubenstein Drive, Morelata Park, Pretoria, Gauteng. The
applicant conducts business as an agricultural
commodity trader.
[18] The respondent is
the plaintiff in the main action and its address remains the same as
in paragraph 2 above.
[19] It is common cause
between the parties that, on or about 18 December 2013 and 25 January
2014, the applicant and Corlink, a
private profit company conducting
operations in the farming industry, entered into four pre-season
agreements. The agreements were
in respect of which Corlink would
sell to the applicant certain quantities of yellow maize and soya
beans from its then anticipated
crop. The applicant would procure the
crop pursuant to its enterprise as a commodity trader (“the
sale agreements”).
[20] The sale
agreements were pre-season agreements in terms of which the applicant
would purchase from Corlink certain quantities
of Corlink’s
anticipated crop. The respondent subsequently served a winding- up
application in terms of section 45 of the
Companies Act of 1973. The
said winding up application pursued payment by the applicant in the
sum of R4,353,397.
[21] The parties later
exchanged correspondence regarding the undertaking by the respondent
to desist with the winding up application.
As the said undertaking
was not forthcoming, the applicant instituted an urgent application.
Upon service of the urgent application,
the respondent proceeded with
the action to recover the amount alleged in the winding up
application.
[22] The applicant is
calling upon the respondent to furnish security for costs based on
the following grounds:
22.1 the respondent
does not possess any unencumbered immovable property;
22.2 the respondent
does not own sufficient movable property to satisfy a costs order
that may be made against the respondent;
22.3 the respondent’s
income is insufficient to satisfy any costs order that may be made
against the respondent;
22.4 there is reason to
believe that the respondent or, in the event of it being wound up,
the liquidator of the respondent, will
be unable to pay the costs of
the applicant if the applicant is successful in its defence to the
action.
[23] Rule 47(3) of the
Uniform Rules of the High Court provides:
“If the party
from whom security is demanded contests his liability to give
security or if he fails or refuses to furnish
security in the amount
demanded or the amount fixed by the registrar within ten days of the
demand or the registrar’s decision,
the other party may apply
to court on notice for an order that such security be given and that
the proceedings be stayed until
such order is complied with”
[24] The onus is on the
party seeking security to persuade a court that security should be
ordered. As was the situation under s13
in the past, a court, in the
exercise of its discretion, will have regard to: the nature of the
claim; the financial position of
the company at the stage of the
application for security; and its probable financial position should
it lose the action. The distinction
to be drawn between the common
law and that which prevailed in terms of s13 is described thus by
Brand JA in MTN Service Provider
(Pty) Ltd v Afro Cali (Pty) Ltd
2007
(6) SA 620
(SCA) paragraphs 15-16:
“Against an
insolvent natural person, who is an incola, so it has been held,
security will only be granted if his or her action
can be found to be
reckless and vexatious (see Ecker v Dean 1938AD 102 at 110). The
reason for this limitation, so it was explained
in Ecker (at 111), is
that the court‘s power to order security against an incola is
derived from its inherent jurisdiction
to prevent abuse of its own
process in certain circumstances. And this jurisdiction, said Solomon
JA in Western Assurance Co v
Caldwell’s Trustee
1918 AD 262
at
274, is a power which ... ought to be sparingly exercised and only in
very exceptional circumstances. (See also eg Ramsamy NO
v Maarman NO
2002 (6) SA 159
(C) 173F-I). In the exercise of its discretion under
s13 of the Companies Act, on the other hand, there is no reason why
the court
should order security only in the exceptional case. On the
contrary, as was stated in Shepstone & Wylie (supra) 10451-J,
since
the section presents the court with an unfettered discretion,
there is no reason to lean towards either granting or refusing a
security order. It follows, in my view, that although bona fides of
the company’s claim is a consideration that may legitimately
be
taken into account in the exercise of the court's discretion, as one
of many factors, mere bona fides in itself cannot serve
as a basis to
refuse security when applied under s13.u
[25] Boost Sports
Africa (Pty) Ltd v South African Breweries (Pty) Ltd (20156/2014)
[2015] ZASCA 93
(1 June 2015) states that, in terms of common law,
the inability by an incola to satisfy a potential costs order is
insufficient
to justify an order of security. Something more is
required. In conclusion, it was found at paragraph [16] of the Boost
decision
that:
“Absent s13,
there can no longer be any legitimate basis for differentiating
between an incola company and an incola natural
person. And as our
Superior Courts have a residual discretion in a matter such as this
arising from the inherent power to regulate
their own proceedings, it
must follow that the former can at common law be compelled to furnish
security for costs. Accordingly,
even though there may be poor
prospects of recovering costs, a court, in its discretion, should
only on order furnishing of security
for costs by an incola company
it is satisfied that the quantum claimed in the main action (or
application) is vexatious or reckless
or otherwise amounts to an
abuse" (own underlining)
[26] The applicant, in
its founding affidavit, did not state that the respondent’s
action is vexatious. The issue of vexatious
action was only raised in
the replying affidavit. It is trite that a party to an application
falls or stands by his/her/its own
affidavit.
[27] It is common cause
that the respondent is an incola. Furthermore, the applicant did not
adduce any evidence in respect of the
respondent’s probable
financial position except for bald statements. The applicant has not
discharged onus. Something more
is required. In the result the
applicant’s application must fail. This application could have
been prevented, particularly
on the backdrop of the tacit law
regarding security for costs. I fully agree with the respondent that
the applicant’s action
must be visited with punitive costs.
ORDER
[28] The third's
defendant’s exception is upheld with costs excluding costs of
senior counsel.
[29] The application
for security for costs is dismissed with costs between an attorney
and own client.
MALI AJ
ACTING JUDGE OF THE
HIGH COURT
APPEARANCES:
For the Third
Defendant/ Applicant : Adv A G South
Instructed by:
MacRobert Incorporated
For the Plaintiff/
Respondent : Adv MC Erasmus SC
Instructed by:
Coetzee Attorneys
Date of hearing : 13
October 2015
Date of Judgment :
01 March 2016