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[2016] ZAGPPHC 745
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Canyon Coal (Pty) v Calwed Construction CC (24643/2016) [2016] ZAGPPHC 745 (28 August 2016)
REPUBLIC
OF SOUTH
AFRICA
IN
THE HIGH COURT OF SOUTH
AFRICA,
NORTH
GAUTENG DIVISION,
PRETORIA
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
CASE
NO: 24643/15
DATE:
2/8/2016
In
the matter between:
CANYON
COAL
(PTY)
….............
Applicant
and
CALWELD
CONSTRUCTRION
CC
….............
Respondent
J
U D G M E N T
MSIMEKI
J,
INTRODUCTION
[1]
The applicant, in this application, seeks an order as follows:
"1.
That the application be dealt with as
a
matter of urgency
within the meaning if Rule 6(12) of the Uniform Rules of Court and
that the Rules in relation to forms and service
be dispense (sic)
with to the extent that this Honourable Court deems meet.
2.
The Respondent is ordered to release immediately
the
Applicant's screening and crushing
plant.
3.
That the Applicant is entitled to collect from the
Respondent's premises situated at 17 Celsius Street
Middelburg, the
plant referred to in paragraph 2. 1
above.
4.1
It is noted that the Applicant has paid into the
Trust Account
of its Attorney of Record the amount of R750 985.18.
4.2
The said amount of R750 985.18 shall remain in an interest
bearing Trust account under control of the Applicant's Attorney of
Record,
and shall
so
remain invested and held separately as
a
potential earmarked fund from which the Respondent
may
possibly execute, subject to the following
conditions:
The
Respondent is to institute an action against
the
Applicant within 30 days from date of this
order.
The
said amount referred to above shall be held in
the
Trust Account of the Applicant's attorney until finalization of
the
action,
if
the
Respondent
institutes
an
action
as contemplated in paragraph 4.2.1
above, and subject
to the condition that the
respondent pursues the action with due diligence.
4.2.3
The obligation of the Applicant's its (sic) attorney
to maintain the said amount in the Attorney's Trust
account shall lapses (sic) and seize (sic) to exist if any
one of
the following events occurred:
(sic)
4.2.3.1
If the action contemplated above is not instituted within 30
days from
the granting of this order.
4.2.3.2
If the Respondent receives
payment from HHIL of
the outstanding
amount which may possibly be due to
the Respondent.
4.2.3.3
If
the
aforementioned
amount substituted with any other form (sic) security to which
the parties
may agree, or which this court may order.
4.2.3.4
If the action is not diligently
pursued by the
Respondent. It is noted that if the action is not diligently
prosecuted the Applicant may approach
the Court for
suitable direction for
the release of the said amount.
5.
Cost of the application on an attorney and client scale
6.
Further and/or alternative relief."
BACKGROUND
[2]
In brief, applicant in this application, seeks an order, that the
lien that the respondent claims to have and exercise over
the
screening and crushing plant which belongs to the applicant, be
substituted with an alternative form of security. The applicant
concluded a verbal agreement with a company called HHIL, Trading and
Supplies (Pty) LTD (HHIL). HHIL, in terms of the agreement,
had to
service and repair the screening and crushing plant. ("the
plant"). The company provided the applicant with a
quotation for
the work which is annexure "B" to the founding affidavit,
for an amount of R627 256 67.The applicant accepted
the quotation and
issued a purchase order which is annexure "C" to the
founding affidavit. HHIL concluded another contract
with the
respondent in terms of which the respondent was to do the work which
HHIL had agreed to do for the applicant. This appears
from Mr Bradley
Hammond's founding affidavit (Hammond). The work was to be done at
the respondent's premises. The applicant's representatives,
in
December 2014, inspected the plant. Hammond contends that the
presence of the plant at the respondent's place did not worry
the
applicant which had been under the impression that a relationship
existed between HHIL and the respondent. HHIL issued a tax
invoice
number Canyon/065 dated 30 November 2014 and this is annexure "D"
to the founding affidavit. In terms of the
invoice the applicant was
to pay R627 256 67. The applicant paid R659 435 45 electronically on
15 January 2015. Proof of electronic
Payment appears on Annexure "E"
to the founding affidavit. It appears that HHIL never paid the
respondent for the work
that it did. This resulted in correspondence
between the parties and their attorneys. Ultimately, the problem
culminated in this
application which is opposed.
[3]
The applicant, after paying the amount to HHIL, arranged to have the
plant returned. Before the plant could be removed, the
applicant
received a letter which was addressed to HHIL by the respondent's
attorneys. The letter is marked "F" and annexed
to the
founding affidavit. It is important to note that the letter is not
addressed to the applicant. The letter informs HHIL that
it owes the
respondent R 750 985 18. Part and parcel of the indebtedness,
according to the letter, relates to "an amount"
in respect
of the costs of repairing a crusher machine belonging to Hakhono
Mine. This is the plant referred to above. The letter
threatened an
action against HHIL unless it paid the demanded amount
"by
close of business on Thursday, 1gfh March
2015".
Paragraph 5 of the letter states that their client intended
selling the plant to defray expenses and to recoup the indebtedness.
[4]
The applicant, through its attorneys, addressed a letter to the
respondent's attorney, demanding an undertaking that the plant
would
not be sold. The letter dated 23 March 2015 is annexure "G"
to the founding affidavit. The letter further informed
the
respondent's attorneys that the applicant intended removing the plant
from the respondent's premises. The respondent's attorney,
on 25
March 2015 wrote to the applicant's attorneys informing them that
their client had "no immediate plans or intention
to sell the
crusher" and that they would keep the applicant's attorneys
timeously informed should their "client's plans
and/or
intentions alter in any manner". The respondents attorneys
further advised that the applicant would not be permitted
to remove
the plant "unless and until the costs incurred by their client
in effecting repairs to the plant, and the storage
costs incurred to
date and further incurred on a daily basis were paid in full".
The respondent's attorneys held the view
that the respondent had the
right of retention over the plant. The letter, regarding the
undertaking, did not satisfy the applicant's
attorneys.
[5]
The applicant, through its attorneys, in a letter to the respondent's
attorneys, did not admit the respondent's right of retention.
However, it tendered substituted security in paragraph 5 of the
letter dated 30 March 2015. The letter is annexure "I"
to
the founding affidavit. The applicant tendered security in an amount
which was more that the amount that the respondent demanded
from
HHIL, by almost R120 000. The applicant regarded the tender as more
than adequate. On 31 March 2015, the respondent's attorneys
rejected
the tender and reiterated that the respondent did have a lien over
the plant.
[6]
I must mention that the application started as an urgent application.
The respondent, in its answering affidavit, stated that
it knew that
it could not sell the plant. It only sated that it, indeed, would
sell the plant merely to "galvanise" the
applicant into
action. The applicant contends that urgency having been removed, the
matter was removed from the urgent roll and
then placed on the
opposed motion roll for adjudication.
[7]
Advocate F Vaccaro (Mr Vaccaro), for the respondent, submitted that
the respondent's right regarding urgency had been reserved
and that
the issue of urgency had to be argued before the court dealt with the
merits of the case. Advocate G. J Scheepers (Mr
Scheepers), for the
applicant, on the other had, submitted that the issue of urgency
would be relevant only insofar as the question
of costs was
concerned.
[8]
Mr Vaccaro also submitted that the applicant had not delivered its
replying affidavit within the time prescribed by the Uniform
Rules of
Court. The argument which Mr Vaccaro mounted in this respect, was
such that at the end, the Court found that accepting
the replying
affidavit would be in the interest of justice. The Court made such
ruling.
[9]
The other submission that Mr Vaccaro made was that HHIL ought to have
been joined as a party in the application. Mr Scheepers
disagreed.
The court, according to Mr Vaccarro, ought to dismiss the application
as HHIL had not been joined.
THE
ISSUES
[10]
The issues to be determined are:
1.
Whether the respondent could still argue the issue of urgency after
the matter was placed on the opposed motion roll.
2.
Whether the court could still entertain the issue of urgency and
strike the matter from the roll instead of dealing with the
merits.
3.
Whether the applicant should have joined HHIL to the proceedings and
also whether the non-joinder should result in the dismissal
of the
application.
4.
Whether an agreement was concluded between the applicant and the
respondent.
5.
Whether the respondent could successfully resist releasing the plant
to the applicant based on the lien which it claims to have
over the
plant.
COMMON
CAUSE FACTS
[11]
These are that:
1.
The applicant is the owner of the plant;
2.
The respondent is in possession of the plant;
3.
The respondent claims payment for work done on the plant;
4.
The amount said to be due for the work done is an amount of R750 985
18;
5.
The Respondent demanded payment of the amount of R750 985 18 from
HHIL and not the applicant;
6
HHIL invoiced the applicant;
7.
The applicant paid HHIL the amount of R 659 435 45.
[12]
According to Mr Scheepers, the issues to be determined are:
1.
Whether the respondent has a lien on the plant enforceable against
the applicant.
2.
Whether the applicant is entitled to an order substituting the
alleged security held by the respondent.
[13]
The respondent concedes that it concluded an agreement with HHIL.
However, it contends that there is an implied agreement between
it
and the applicant arising from the fact that the applicant knew from
the outset that the respondent was "contracted"
to HHIL to
attend to the repair and service of its plant and that the
applicant's representatives even attended at the respondent's
premises to inspect the work performed by the respondent without any
objection to the presence of the plant and the fact that the
respondent was to do the work.
[14]
The respondent did not write to the applicant about the amount that
it demanded from HHIL, possibly because the express agreement
to
repair and service the plant had been between HHIL and the
respondent. What emerges from the evidence is that the plant is a
very valuable equipment worth millions of rands. The applicant,
because of this, should have enquired from HHIL as to how far it
had
gone with the repair and service of the plant. No doubt, the
applicant would have wanted to see the progress itself. The
applicant,
therefore, must have known that the respondent and not
HHIL was doing the work. Indeed, the applicant inspected the plant
while
it was in the respondent's possession.
[15]
The applicant, upon being told that the respondent was not prepared
to release the plant unless it was paid for the work that
it had
done, should have immediately gone to HHIL and complained about this
given the fact that it had already paid HHIL for the
work. It was
incumbent upon the applicant to there and then demand repayment of
the money in order to go and pay the respondent
so that the plant
could be released to it. The court is not told anything about this.
The applicant, instead, expects the respondent
to release the plant
because it has paid HHIL for the work done. Much more than this
should have been told by the applicant.
[16]
This then takes us to the relevance of joining HHIL to the
proceedings. It was, on behalf of the respondent, submitted that
the
money that the applicant paid HHIL might not have had anything to do
with the repairing and the servicing of the plant. This,
because the
amount that the applicant was invoiced for is different from the
amount that the applicant paid HHIL. Without a proper
explanation by
the applicant the submission seems to have merit.
[17]
One would have expected to hear more about the money that the
applicant allegedly paid HHIL. Nothing other than that the applicant
paid HHIL an amount of R659 435.45 is explained. Nothing is said
about the different amounts.
[18]
HHIL, clearly did not pay the respondent. The plant would have been
released had the respondent received payment. The Court,
had HHIL
been joined to the proceedings, would have been in a better position
to adjudicate the matter.HHIL, in my view, should
have been joined to
the proceedings.
[19]
The applicant inspected the plant and, being satisfied with the work
that was done, paid the money to HHIL. Neither the applicant
nor HHIL
complained about the work, the price for the work and the storage
fees.
[20]
The respondent, in my view, did the work that it was expected to do.
It was also entitled to charge for the work and to receive
payment
therefor.
[21]
It must be borne in mind that the plant was lawfully transported to
the respondent for the work to be done. The plant was safely
and
lawfully in the possession of the respondent. No one complained or
objected to the fact that the plant was in the possession
of the
respondent. There is no evidence to show that the applicant was not
aware that the plant was in the respondents possession.
All applicant
contends is that there was no agreement between it and the
respondent. However, impliedly, the applicant was aware
of what was
happening. It never objected to the arrangement. The applicant never
stopped the respondent from proceeding with the
work that it was
aware the respondent was doing. It was also very clear to the
applicant that the respondent would have to be paid.
It was also
obvious that the applicant would have to pay for the work. Whoever
did the work would have to be paid by the applicant
unless evidence
revealed other terms of the agreement. The respondent has done the
work and, in my view, is lawfully retaining
the plant until it is
paid.
[22]
It is equally true that unless the parties agreed otherwise, the
plant would not be released unless, the work was paid for.
It is not
clear whether the applicant, aware of the fact that the respondent
was doing the work, enquired whether the respondent
would be paid by
it or by HHIL. One would have expected the applicant to have made
such enquiries. The Court is told nothing about
this. Surely, the
applicant and HHIL must have discussed this. The respondent could not
be expected to do the work for free. It
is significant that nothing
is said about this.
[23]
Mr Vaccaro, for the respondent, submitted that the applicant ought to
have paid the respondent before the plant was released
even if it
meant paying without prejudice or under protest. Having regard to the
work which the respondent did and that neither
the applicant nor HHIL
complained about the work, the price for the work and their storage
fees, the submission has merit. Why
should the respondent have to
wait when it has performed in terms of the agreement. The applicant
has to pay to get the plant released
to it. It is, in my view, its
responsibility to pay the respondent and then look to HHIL for
repayment.
[24]
The respondent appears to have done a perfect job but has had to wait
for a long time before payment for the job is made. The
work was done
in October 2014 and to date no payment therefor has been received.
The respondent is armed with the lien which, if
substituted, may
result in the respondent having to wait even much longer before
payment is received while the plant has been repaired
and serviced.
[25]
Mr Scheepers submitted that the applicant, for purposes of this
application, does not attack the existence if a lien enforceable
against the applicant. The respondent, in my view, will severely be
prejudiced should the court order that the security held by
the
applicant be substituted with an alternative form of security which
has already been rejected by the respondent or any form
of security.
The security tendered has been rejected by the respondent on the
basis that it has done work with which both the applicant
and HHIL
are satisfied. Both have never complained about the work, the price
for the work as well as the storage fees.
[26]
Had the respondent been paid, the plant would long have been
released. All the applicant needs to do is to pay the respondent
and
then claim repayment from HHIL. The respondent, in my
view
,
does not have to be forced to sue either the applicant, or HHIL
or both when the work has clearly been done to the satisfaction of
both HHIL and the applicant.
[27]
The respondent, should it relinquish the debtor/creditor lien it has
over the plant, which entitles it to retain the plant
until it is
fully paid by the applicant, being the person that needs the plant
released to it, will suffer immense irreparable
harm and prejudice.
[28]
The respondent, as correctly submitted on its behalf by its counsel,
is, indeed, an innocent party which has fully performed
what it had
contracted to do. There appears to be no grounds in the circumstances
of this case for the Court to exercise its discretion
in favour of
substituting the possession which the respondent lawfully has with
the conditional form of security tendered by the
applicant or any
other. The delay that may follow the substitution is too ghastly to
contemplate. The application, in my view,
should fail.
[29]
Regarding the issue of urgency, Mr Scheepers submitted that the
matter was urgent. The urgency appeared to be stemming from
the fact
that the respondent had threatened to sell the plant to defray
expenses and to recoup the indebtedness. The letter which
was
addressed to the applicant's attorneys disclosed that the respondent
was not intending to sell the plant and that in the event
that it
changed its mind, the applicant would be notified timeously. This, in
my view, conveyed a clear message. However, the respondent
in its
answering affidavit further explained what the message conveyed. The
answering affidavit restated the message namely, that
the plant could
not have been legally sold.
[30]
I pointed out earlier in this judgment that the matter would have
been adjudicated with much ease had HHIL been joined to the
application. This was not done. The result has been lack of
information which would have been useful to the Court. Only the
applicant,
which knew the truth of the matter, knows why this vital
information was not disclosed to the Court.
[31]
All the aspects that I referred to above are a clear indication that
the application should fail.
[32]
The matter was clearly not urgent. The matter was removed from the
urgent roll and placed on the opposed motion roll. Urgency,
consequently, and in the process fell away. The facts of the matter
clearly reveal that the matter was not urgent. This aspect
as far as
I see it is only relevant to the issue of costs. The respondent, in
my view, given the facts of this case, is, indeed
entitled to the
costs on a punitive scale.
[33]
The following order, in the result, is made:
The
application is dismissed with costs on the scale as between attorney
and client.
_____________________
M.W.
MSIMEKI
JUDGE
OF THE HIGH COURT
GAUTEN
G DIVISION OF THE HIGH COURT