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[2016] ZAGPPHC 116
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Load'em Sand & Stone CC v Roshcom (Pty) Ltd (23859/2014) [2016] ZAGPPHC 116 (24 March 2016)
IN THE HIGH COURT OF
SOUTH AFRICA
(GAUTENG DIVISION,
PRETORIA)
CASE NO: 23859/2014
DATE: 24/3/2016
Reportable
Of interest to other
judges
Revised
In the matter between:
LOAD’EM SAND &
STONE
CC
Plaintiff
and
ROSHCOM (PTY)
LTD
Defendant
JUDGMENT
Baqwa J
[1] The plaintiff is a
closed corporation trading under the name and style of Load’em
Sand & Stone CC and the defendant
is a company trading as Roshcon
(Pty) Limited.
[2] On 24 March 2014 the
plaintiff issued summons claiming the sum of R1 002 457.54 against
the defendant being an amount owed in
respect of river sand sold and
delivered by it to the defendant at the latter’s special
instance, during the period 18 October
2010 to 31 March 2011.
[3] The plaintiff
subsequently applied for summary judgment but this application was
later withdrawn and the defendant was granted
leave to defend.
[4] The defendant filed a
plea to the defendants’ claim and at the same time filed a
special plea in which it also relies
on set-off as a defence to the
plaintiff’s claim.
[5] In the present
application the defendant seeks an order in terms of which the
proceedings are stayed pending the final resolution
by way of
arbitration.
The Law
[6] The special plea is
based on the provisions of Section 6 of the Arbitration Act 42 of
1965 (“
The
Arbitration Act
&rdquo
;) in which the
following is stated:
“
(1) If any
party to an arbitration agreement commences any legal proceedings in
any Court (including any inferior Court) against
any other party to
the agreement, in respect of any matter agreed to be referred to
arbitration, any party to such legal proceedings
may at any time
after entering appearance but before delivering any pleadings or
taking any other steps in the proceedings, apply
to that Court for a
stay of such proceedings.
(2) If on any such
application the Court is satisfied that there is no sufficient reason
why the dispute should not be referred
to arbitration in accordance
with the agreement, the Court may make an order staying such
proceedings subject to such terms and
conditions as it may consider
just.
”
[7] There are two
contracts in question in the present application and for ease of
reference I propose to refer to them as the River
Sand Contract and
the G7 Material Contract. The River Sand Contract as already stated
is the one that gives rise to the plaintiff’s
claim whereas the
G7 contract is the one in regard to which the defendant claims to
have overpaid the plaintiff which results in
the set-off special
plea.
[8] The defendant does
not deny the contract and unequivocally admits the plaintiff’s
claim in its plea as follows:
“
12. The
defendant admits portions of this order not paid were as a result of
offsetting same against payments made on disputed deliveries
of
material at Komati
”
[9] It is trite law that
arbitration is a mechanism for resolving disputes and that no purpose
can be served by arbitration of a
claim that is not disputed. This
much is clear from the judgment of Didcott J (as he then was) in the
case of
Parekh v Shah Jehan Cinemas (Pty) Ltd and Others
1980
(1) SA 301 (D) at 304 E – G where he stated as follows at
Marginal letter E “
A disputed claim is sent to arbitration
so that the dispute which it involves may be determined.
”
[10] The question that
arises therefore is if the plaintiff’s claim is not disputed,
why should it be sent for arbitration.
[11] This view is
endorsed further by Plewman JA in
Telecall (Pty) Ltd v Logan
2000
(2) SA 782 (SCA) at para 12 when he states:
“
[12] I conclude
that before there can be a reference to arbitration a dispute, which
is capable of proper formulation at the time
when an arbitrator is to
be appointed, must exist and there cannot be an arbitration and
therefore no appointment of an arbitrator
can be made in the absence
of such a dispute. It also follows that some care must be exercised
in one’s use of the word “dispute”.
If for example
the word is used in a context which shows or indicates that what is
intended is merely an expression of dissatisfaction
not founded upon
competing contentions no arbitration can be entered upon.
”
[12] In the special plea
the defendant makes reference to the arbitration clause and then
states “
A dispute concerning the liability of the defendant
has arisen.
”
It then contends that the
plaintiff should submit the dispute to arbitration without setting
out the terms of the dispute in the
special plea. This does not
accord with the law as set out in the case of
PCL
Consulting (Pty) Ltd t/a Phillips Consulting SA v Tresso Trading 119
(Pty) Ltd
2009
(4) SA 68 (SCA) at para 7 where Cloete JA stated as follows:
“
In the present
proceedings, the defendant has simply pointed out that the lease
contains an arbitration clause in wide terms. That
is not sufficient.
The defendant was obliged to go further and set out the terms of the
dispute.
”
[13] It would therefore
appear that the defendant merely alleges a dispute but omits to
formulate same thus failing to make out
a case for a referral as such
referral would be
in vacuo
.
[14] The issue of set-off
is pleaded as follows with reference to the G7 contract:
14.1 The Komati contract
of June 2010 related to G7 material.
14.2 The order was for
77m
2
(should read m
3
)
of G7 material.
14.3 The plaintiff
allegedly delivered only 71m
2
(should read m
3
)
of G7 material.
14.4 The defendant
overpaid the plaintiff by an amount of R1 002 457.54 being
the amount claimed from the defendant.
14.5 The plaintiff
invoiced the defendant for the deliveries of G7 material at Komati.
14.6 The defendant
disputed the quantities of G7 material delivered relative to the
invoices submitted.
14.7 The plaintiff
breached the agreement by delivering only 71m
2
of the
quantities and not 77m
2
as ordered.
[15] The defendant states
that its indebtedness to the plaintiff, which is admitted, is
extinguished by setting off the unpaid River
Sand invoices against
the overpayment of the G7 material.
[16] The essentials for
set off are set out in Amler’s Precedents of Pleadings (eighth
edition) P344 as follows:
16.1 The indebtedness of
the plaintiff to the defendant
Porterstraat
69 Eiendomme (Pty) Ltd v PA Venter Worcester Pty Ltd
2000 (4) SA 598 (C)
16.2 That the plaintiff’s
debt to the defendant is due and legally payable;
Mohamed
v Nagdee
[1952]
2 All SA 121 (A), 1952 (1) SA 410 (A)
Schnehage
v Bezuidenhout
[1977]
1 All SA 408 (O), 1977 (1) SA 362 (O)
16.3 That both debts are
liquidated (a debt is liquidated) if:
16.3.1)
it is based on a liquid document
16.3.2)
it is admitted
16.3.3)
its money value has been ascertained; or
16.3.4)
it is capable of prompt ascertainment;
Fatti’s
Engineering Co (Pty) Ltd v Vendick Spares (Pty) Ltd
[1962] 1 All SA 578 (T),
1962
16.3.5)
The parties are indebted to each other in the same capacity.
Road
Accident Fund v Myhill NO
2013
(5) SA 426 SCA
Capricorn
Beach Home Owners Association v HES Potgieter t/a Nilands and Another
[2013] ZASCA 116, 2014
(1) SA 46 (SCA)
[17] As is evident from
the requirements of a set-off, it is necessary for the two parties to
be mutually indebted to each other
and that both debts are liquidated
and fully due.
[18]
In casu
the
defendant has not set out a liquidated claim. Further, it is not
clear from the defendant’s narration of its set-off
how the
amount of the debt is calculated. No figures in support of such a
calculation are provided. It is also not clear what the
status of the
short deliveries alleged is
inter partes
. In light of these
omissions it cannot be said that the debt alleged by the defendant is
a liquidated debt and whether it is due.
[19]
In casu
, the
debt will only come into existence once it is found (by a court or by
agreement) as a fact that the quantities delivered are
at variance
with the amounts paid. The debt cannot be said to be in existence
before this determination is made. The claim can
therefore not be
said to be liquidated or easily ascertainable.
[20] The defendant’s
counsel sought to distinguish the application of the Shah Jehan
Judgment by Didcott J (as he then was)
(
supra
) from the
present case by submitting that that case dealt with a counter claim
involving a claim for damages which was therefore
an illiquid claim.
I have found that similarly in this application the G7 contract
remains unresolved regarding short deliveries
and to that extent
therefore it remains illiquid and can therefore not be brought to
bear on an admitted liquid claim simply by
pulling in the arbitration
clause to block the claim.
[21] It is trite that in
matters such as the present application a party stands or falls on
the basis of the papers presented before
the court and that a party
must make out a case for the relief sought. The defendant has failed
to define the dispute that it makes
reference to and it seeks to set
off a debt that is not liquidated. The arbitration clause with regard
to which the defendant seeks
to stay the present proceedings is
simply not applicable.
[22] On a conspectus of
all the facts and the submissions by counsel, I am not satisfied that
the applicant has succeeded in making
out a case for the relief
sought.
[23] In the result, I
make the following order:
The special plea is
dismissed with costs.
___________________________
S. A. M. BAQWA
JUDGE OF THE HIGH
COURT OF SOUTH AFRICA
GAUTENG DIVISION,
PRETORIA
Heard on
:
23 March 2016
Delivered on
:
24 March 2016
For the Plaintiff:
Advocate E. P. van
Rensburg
Instructed by:
Van Zyl Le Roux Inc.
For the Defendant:
Advocate M. Chauke
Instructed by:
Bowman Gilfillan Inc.