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[2015] ZAGPPHC 61
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FFA Assets (Pty) Ltd v Enspire Aviation (Pty) Ltd and Another (53672/14) [2015] ZAGPPHC 61 (19 January 2015)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
CASE NO. 53672/14
DATE: 19 JANUARY
2015
NOT REPORTABLE
NOT OF INTEREST TO
OTHER JUDGES
In the matter
between:
FFA
ASSETS (PTY)
LTD
...............................................................................................
P
LAINTIFF
and
ENSPIRE
AVIATION (PTY)
LTD
....................................................................
1
s
t
DEFENDANT
PAUL
MOSELY
MOSES
..................................................................................
2
nd
DEFENDANT
JUDGMENT
DE JAGER. AJ:
[1]
This is an application for summary judgment against both defendants.
The plaintiff instituted action against the first and second
defendants for payment in the amount of R2,013,096.57, together with
interest and costs, being the balance allegedly due and payable,
pursuant to a so-called
“
settlement
agreement"
entered
into between the parties on 19 September 2013.
[2] The settlement
agreement relied upon by the plaintiff, emanates from various
preceding contracts concluded between the plaintiff
and the first
and/or second defendants in relation to the sale of an aircraft and
aircraft spares.
The pleadings:
[3] The particulars
of claim incorporate two claims. Claim 1 is based on contract, and
directed against both the first and second
defendants jointly and
severally. Claim 2 is formulated as an alternative claim and is
directed against the second defendant only.
The cause of action
relied upon in claim 2 is that of personal liability of the second
defendant in his capacity as director of
the first defendant.
[4] Both defendants
entered appearance to defend the action, whereafter the plaintiff
launched the present application.
[5] At the inception
of the argument, Mr Stevens, on behalf of the plaintiff, announced
that the plaintiff was not proceeding with
claim 2 for purposes of
the application for summary judgment. I should mention that, in my
view, the relief sought in claim 2,
is in any event not susceptible
of summary judgment, seeing that the declaration of personal
liability of a director of a company
(which requires a separate
investigation), falls beyond the ambit of Rule 32 of the Uniform
Rules of this Court.
[6] The result is
that the plaintiff only relied on claim 1, i.e. payment pursuant to
the alleged settlement agreement concluded
between the parties.
[7]
The plaintiff alleges that the plaintiff entered into a partly
written and partly oral agreement with the first and second
defendants on 19 September 2013. The written part of the agreement is
contained in annexure “POC1” to the particulars
of claim,
with the heading
“
Acknowledgement
of Debt and Settlement Agreement”.
[8]
Ex facie
the
document, it would appear that the agreement was entered into between
the plaintiff and both defendants. It, however, seems
that the
document was signed by the second defendant in his representative
capacity only, as Chief Executive Officer of the first
defendant. It
is unclear whether the second defendant also signed the document in
his personal capacity. I shall again refer to
this issue shortly.
[9] The plaintiff
then proceeds to set out the alleged oral terms of the settlement
agreement. These terms are set out in paragraphs
5.1 to 5.4 of the
particulars of claim. Of importance is the allegation that the
parties agreed that the second defendant would
become a co-debtor
with the first defendant, in respect of the amount due and payable to
the plaintiff.
[10] It was also a
term of the agreement that the debt amount would be reduced by the
sum of payments made to the credit of the
plaintiff in respect of the
purchase price of a helicopter. The plaintiff alleges that it was
agreed that the exact amount to be
deducted in this regard was to be
calculated in due course.
[11] It was
allegedly also part of the oral agreement that the plaintiff would
purchase a set of main rotor blades for a particular
helicopter at a
purchase price of R350,000.00. The rotor blades have not been
delivered and the purchase price has not been paid.
The plaintiff
tenders payment of the purchase price against delivery of the rotor
blades in the particulars of claim under claim
2. Seeing that the
plaintiff does not presently rely on claim 2, this part of the oral
agreement is irrelevant for purposes of
the summary judgment
proceedings.
[12]
In paragraph 6.1 of the particulars of claim the plaintiff alleges
that the exact sum to be deducted in respect of payment
of the
purchase price of the helicopter referred to
supra,
was
calculated to be R973.973.00. In the same paragraph, the plaintiff
also alleges that the plaintiff made payment to the credit
of the
first defendant to Absa Bank in the amount of R175,100.00 after
conclusion of the settlement agreement, which should be
subtracted
from the payments made to the credit of the plaintiff in respect of
the purchase price of the helicopter. During argument
(and from the
papers) it appeared that the accuracy of and/or the fact whether the
amount had been paid to Absa Bank, were in dispute.
In order to
eliminate this dispute and the effect it might have on the
quantification and liquidity of the plaintiffs claim, the
plaintiff
formally abandoned the amount of R175,100.00, reducing the claim
amount to R1,837,996.57.
[13]
In the affidavit resisting summary judgment, deposed to by the second
defendant on behalf of both defendants, no fewer than
six points
in
limine
are
raised, mostly of a technical nature. I intend to deal with these
points
seriatim.
Before
I do so, I regard it practical to dispose of the position of the
second defendant at this stage.
Defence raised by
second defendant:
[14]
The points
in
limine
contained
in the affidavit resisting summary judgment, are raised on behalf of
both defendants. The second defendant, however, proceeded
to raise
further defences regarding the merits of the claims against him.
[15]
Firstly (essentially also being the subject matter of the sixth point
in limine),
the
second defendant disputes the validity of him being bound as a surety
for the obligations of the first defendant in terms of
the settlement
agreement. The plaintiff, however, contended that it is not the
plaintiffs case that the second defendant is liable
as surety, but
indeed as a co-debtor, wherefore the law of suretyship would be
inapplicable. On a reading of the particulars of
claim and the
supporting documentary evidence, I am inclined to agree that the
second defendant is not cited as a surety, but rather
as a second
contracting party and co-debtor. Be that as it may.
[16]
The second defendant further states that he signed the settlement
agreement merely as a representative for and on behalf of
the first
defendant. As far as this contention is not supported by the contents
of annexure “POC1” itself, it was argued
by Ms Balmelli
on behalf of the defendants, that the evidence presented by the
second defendant, sustains a defence based on rectification
of the
settlement agreement,
alternatively
,
error
by
the second defendant in signing the document as formulated. The
defence therefore boils down to a denial by the second defendant
that
he ever intended to be bound to the terms of the settlement agreement
in his personal capacity. As alluded to earlier, the
contents of
annexure “POC1” itself are ambiguous in this regard and
do not provide a clear answer to whether the second
defendant became
a party to the settlement agreement or not. This issue should be
resolved with the benefit of tested
viva
voce
evidence
at trial in due course.
[17] The second
defendant also presented evidence in opposition to claim 2, i.e. to
him being declared personally liable for the
debts of the first
defendant. (This issue has of course become irrelevant for purposes
of this application seeing that the plaintiff
does not persist with
the claim at this stage. I, however, regard the evidence to be
significant.) The second defendant denies
having acted recklessly or
with the intent to defraud creditors of the first defendant. [See
paragraphs 38 to 44 of the affidavit
resisting summary judgment.] The
second defendant explains that when he signed the settlement
agreement on behalf of the first
defendant, he was confident that a
transaction between a company in which the first defendant is a
shareholder, and the Department
of Defence, would realize. In
paragraph 43 of the affidavit resisting summary judgment, the second
defendant concludes as follows:
"43
Consequently at the time of concluding the settlement agreement I was
confident that the first respondent would be able
to comply with the
settlement agreement. ”
[18] The argument is
therefore that the second defendant never acted recklessly nor
intended to defraud the first defendant’s
creditors.
[19]
In passing I should mention that I find it unfortunate that the
second defendant failed to expressly disclose what the fate
of the
transaction with the Department of Defence was. Having regard to the
gist of the evidence and the passage quoted above,
it is reasonable
to infer that the transaction did not realize as expected, resulting
in the first respondent being unable to perform
in terms of the
settlement agreement. This inference of course has bearing on the
bona fides
of
the first defendant’s defence in these proceedings, which will
be dealt with
infra.
[20]
In the circumstances I
am
satisfied
that the second defendant disclosed a
bona
fide
defence.
Wherefore I intend to grant the second defendant leave to defend the
action.
Defence
raised by the first defendant (points
in
limine):
[21] This brings me
to the defences raised on behalf of the first defendant.
[22]
In the
first point
in limine
the
defendants contend that the verifying affidavit in support of summary
judgment is materially defective as the deponent thereto
failed to
verify each cause of action on which the plaintiff relies for its
claim. The plaintiff also did not identify or verify
a specific cause
of action, in that the deponent only states:
“
4.
I
verify the facts as set out in the particulars of claim and the cause
of action.
’’
[23] The relevant
portion of the text of Rule 32(2) reads as follows:
",..
together with an
affidavit made by himself or by any other person who can swear
positively to the facts verifying the cause of action
and the amount,
if any, claimed.
...”
[24]
The wording of the rule itself, does not require the plaintiff to
verify all the causes of action separately. The exception
is where
mutually destructive causes of action are formulated against a
defendant, which would compel the plaintiff to elect which
cause of
action the plaintiff relies on for purposes of the summary judgment
application. I deal with this scenario in the discussion
of the
second point
in
limine infra.
[25] In this case
the first defendant is faced with only one cause of action. It should
be noted that an affidavit resisting summary
judgment was filed on
behalf of both defendants. Therein both defendants deal with their
defences in respect of the respective
causes of action.
[26]
I therefore regard this point to be overly technical and without
merit. The first point
in
limine
is
dismissed.
[27]
The
second point
in
limine
raises
an objection to the fact that the plaintiff ostensibly verifies two
mutually destructive causes of action, in the absence
of a pertinent
election of either.
[28]
It is in order for a plaintiff to verify a cause of action based on
alternative claims that are not mutually destructive. [See
Diesel
Power Plant Hire CC v Master
Diggers
(Pty) Ltd
1992 (2)
SA 295
(W) at 297 C - E.]
In
the present case only claim 1, based on a contractual cause of
action, is directed at the first defendant. The alternative claim
formulated in claim 2, is pleaded as an alternative basis
for
the
second
defendant’s liability towards the plaintiff. The point
in
limine
under
discussion might therefore very well have been raised successfully on
behalf of the second defendant. As against the first
defendant,
however, the point cannot be upheld seeing that the singular cause of
action against the first defendant is straight
forward and clearly
formulated in claim 1. !t cannot be argued that the plaintiff
verified two mutually destructive causes of action
against the first
defendant. It is therefore not required of the deponent, to elect
which cause of action he verifies in relation
to the first defendant.
[29]
The authorities are clear that a plaintiff cannot verify alternative
claims that are mutually destructive, i.e. where the
facta
probanda
relied
upon in the alternative claims, constitute mutually destructive
versions. I am not convinced that the
facta
probanda
of
claim 2 in support of the second defendant's personal liability as a
director of the first defendant, are exclusive of the
facta
probanda
that
would support the second defendant’s alleged contractual
liability as formulated in claim 1. So even if it is correct
that the
plaintiff verified both causes of action, it should not render the
affidavit fatally flawed. However, such dual verification
would in
any event only apply to the second defendant against whom both causes
of action are directed.
[30]
In
Standard Bank
of South Africa Limited v Roestof
2004
(2) SA 492
W at 496 F - H,
it
was held that if the papers are not technically correct due to some
obvious and manifest error which causes no prejudice to the
defendant, it is difficult to justify an approach that refuses the
application for summary judgment, especially in cases where
a reading
of the defendants’ affidavit opposing summary judgment makes it
clear beyond doubt that the defendants know and
appreciate the
plaintiff’s case against them.
[31]
The following passages by Blieden J in the aforesaid matter
at
497 - 498
are
apposite:
“
There
can be no doubt, as has been said in numerous cases, that summary
judgment is a harsh remedy which closes the door to the
defendant
proceeding further with his defence. However, it is an important
means of preventing defendants who can demonstrate no
bona fide
defence or furnish security from taking advantage of the unavoidable
delays resulting from a matter going to trial by
utilizing the
stratagem of entering an appearance to defend. While appreciating the
difficulties which any defendant is presented
with on receipt o
f
an application for summary judgment, there seems to be no reason for
an affidavit made in terms of Rule 32 to be more strictly
construed
than any other affidavit. If a defendant has difficulty in dealing
with the pleadings because they are not technically
correct for one
or other reason, this should be stated in his affidavit filed in
terms of Rule 32(3)(b) as a justification for
his inability to
present an affidavit disclosing
'fully
the nature and grounds of the defence and the material facts relied
upon therefore. ’ However, if there is no doubt
as to what the
plaintiff's case is, even though there may be some manifest errors in
the vjay it has been presented, which is the
position in the present
case, it seems to me to be an exercise in futility to non-suit the
plaintiff after the defendant has filed
an affidavit in terms of Rule
32(3)(b) in which he demonstrates his appreciation of the plaintiff's
case and sets out what he perceived
to be an ansv/er to it as
required by the Rule...
The papers as a
whole must be looked at in order for a Court to come to a conclusion
as to whether leave to defend should be granted
to a defendant or
not. The function of a Court should not be to protect dishonest
defendants because a plaintiff’s pleadings
are less than
perfect. Each case must be judged on its own facts...
In the present
case, as with the first objection in limine, the defendant has not,
nor has he claimed to have, suffered any prejudice
as a result of the
plaintiff’s manifest error. To rely on the technical errors in
the summons and the plaintiff’s Rule
32 affidavit and at this
stage deny the plaintiff summary judgment, if it is otherwise
entitled to such an order, would, in my
view, result in a legal
nonsense.’’
[See
also
Charsley v
AVBOB (Beqrafnisdiens) Bpk
1975
(1) SA 891
E at 893 C - D ]
[32]
Nowhere in the affidavit resisting summary judgment, is it contended
on behalf of the first defendant that the first defendant
has been
prejudiced or that it had any difficulty in dealing with the
pleadings as a result of the technical inaccuracies contained
therein. On the contrary, it is patently clear from the affidavit
resisting summary judgment that both defendants fully appreciate
the
nature and extent of the proceedings they are opposing and were
indeed able to deal with the allegations, in opposing same.
This
point
in limine
is
therefore dismissed.
[33]
The
third point
in
limine
relates
to the possible excipiability of claim 2 against the second
defendant. This point requires no further determination, seeing
that
I intend to grant the second defendant leave to defend the action for
the reasons stated earlier.
[34]
The
fourth point
in
limine
raises
the issue that the relief sought in claim 2 of the particulars of
claim (against the second defendant), is not susceptible
of summary
judgment. As already stated I am inclined to agree. Similarly it does
not require further determination, seeing that
I intend to grant the
second defendant leave to defend the action.
[35]
In the fifth point
in
limine
the
defendants contend that the particulars of claim in respect of claim
1 are excipiable in that same are vague and embarrassing.
[36]
Firstly the defendants submit that paragraph 5 of the particulars of
claim is flawed in that the plaintiff alleges that the
agreement was
concluded with the
"defendant
”
without
specifying which defendant. It is, however, clear from the remainder
of the terms and conditions of the agreement relied
upon by the
plaintiff, that the settlement agreement was reached with both
defendants, on the plaintiff’s version. This is
indeed one of
the contentious issues between the parties, to which the second
defendant has responded extensively.
[37] It is clear
that this typographical error in paragraph 5 of the particulars of
claim, in no way prevents the defendants from
pleading to the
allegations. In this regard I refer to paragraph 35 of the affidavit
resisting summary judgment wherein the defendants
record their
version regarding the conclusion of the settlement agreement as
follows:
“
35
I acknowledge the fact that I signed the settlement agreement being
‘POC1’ annexed to the plaintiff's claim as a
duly
authorised representative acting for and on behalf of the first
defendant
.
However, I deny
for the reasons aforesaid that I am personally liable to the
plaintiff in my personal capacity for the amount claimed
in terms of
the settlement agreement and I reiterate what is stated above in this
regard. ”
[38] It is therefore
obvious that the defendants fully comprehend the allegations in
respect of the conclusion of the contract and
the parties thereto,
and are indeed able to express their stance and defence to such
allegations.
[39] I therefore
find that the defendants are not frustrated in pleading to the
allegations in paragraph 5 of the particulars of
claim.
[40] Secondly the
defendants complain about the fact that it is not stated in paragraph
5.2 of the particulars of claim, with whom,
where and when the
agreement (that the second defendant would become a co-debtor) was
concluded. The absence of these particulars,
does not prevent the
defendants from pleading to the allegation. All that is required from
the defendants, specifically the second
defendant, is to admit or
deny the conclusion of such an agreement. The conclusion or not of
such an agreement, is certainly within
the knowledge of the second
defendant and he is no doubt able to react and plead to the
allegation as it stands. He has in fact
already done so in paragraph
35 of his affidavit quoted above.
[41]
Even if the particulars of claim lack absolute clarity, but still
convey beyond any doubt the nature of the plaintiffs claim,
textual
criticism of the summons and the verifying affidavit, will not
compensate for the defendant’s failure to disclose
a defence on
the merits. [See
Caxton
Ltd v Barriqo
1960
(4) SA 1
(T) at 4 A;
Nedcor
Bank Ltd v Hennop & Another
2003
(3) SA 622
(T) at 627 E - H.]
This
point
in limine
is
therefore rejected.
[42]
I have already touched upon the issues raised in the
sixth
point
in limine.
These
relate exclusively to the defence raised by the second defendant and
therefore do not require further consideration at this
stage.
Defences raised
by first defendant on merits:
[43] This concludes
the technical defences raised. The only evidence I could find in
opposition to the merits of the claim against
the first defendant, is
contained in paragraphs 36 and 37 of the affidavit resisting summary
judgment. In paragraph 36 the deponent
states as follows on behalf of
the first defendant:
“
36
I deny that the
first defendant is indebted to the plaintiff in the amount of
R2,013,096.57 and no proof of the amounts ... averred
in the
particulars of claim has been provided.”
The
bear denial quoted above, does not even attempt to provide a
bona
fide
defence
to the claim. It is not required of a plaintiff to provide evidence
in support of the claim formulated in the particulars
of claim at the
stage of summary judgment proceedings. It is indeed for the
defendants to raise a
bona
fide
defence
with sufficient particularity, and which would be sustainable in law
if found to be correct. If the first defendant honestly
doubted the
accuracy of any calculation, it should at least have provided the
basis thereof. I accept that the figures were probably
conveyed to
the first defendant prior to litigation and that the first defendant
had ample opportunity to consider and debate the
accuracy therefore.
Why not take the Court into its confidence by illustrating where the
[44]
As was said by Colman J in
Breytenbach
v Fiat SA (Edms) Bpk
1976
(2) SA 226
Tat 228 A-B:
‘
'All
that is required is that the defendant’s defence be not set out
so boldly, vaguely or laconically that the Court with
due regard to
all the circumstances receives the impression that the defendant has
or may have dishonestly sought to avoid the
dangers inherent in the
presentation of a further or clearer version of the defence which he
claims to have.”
[45]
This is indeed the position in the present case. The first
defendant’s version
“
lacks
the forthrightness as well as the particularity that a candid
disclosure of the defence should embody”.
[
Breytenbach
-case
supra
at
231 A.]
[46] In paragraph 37
the following evidence is tendered on behalf of the first defendant:
“
37
I further specifically deny that the plaintiff is entitled to take
into account any alleged payment of R175,100.00 as I have
no
knowledge of such a payment and no proof has been provided that such
a payment has been made.”
[47] This denial and
the resultant dispute in respect of the said amount, have fallen by
the wayside as a result of the plaintiff’s
abandonment of such
an amount to be taken into account when calculating the indebtedness.
[48] The first
defendant says nothing more on the merits of the claim.
[49]
I therefore conclude that the first defendant presented no
bona
fide
defence
to the merits of the plaintiff’s claim. Keeping in mind the
inference drawn from the contents of paragraph 43 of the
affidavit
resisting summary judgment mentioned earlier, it would rather suggest
that the first defendant is simply financially
unable to perform in
terms of the settlement agreement, due to circumstances beyond the
contractual relationship between the parties.
This, however, is no
defence to the plaintiff s claim.
[50] In the premises
the plaintiff is entitled to summary judgment against the first
defendant.
[51] In the result
the following order is made:
[51.1] Summary
judgment is granted against the first defendant in favour of the
plaintiff in the following terms:
[51.1.1] The first
defendant is ordered to pay the plaintiff the amount of
R1,837,996.57;
[51.1.2]
The first defendant is ordered to pay interest to the plaintiff on
the amount of R1,837,996.57, at the applicable
mora
interest
rate from time to time per annum, calculated from 16 October 2013 to
date of final payment;
[51.1.3] The first
defendant is ordered to pay the plaintiffs costs of suit in respect
of the claim against the first defendant.
[51.2] The second
defendant is granted leave to defend the action;
[51.3] The costs of
the summary judgment application in respect of the second defendant,
are costs in the cause.
N.F. DE JAGER AJ
ACTING JUDGE OF
THE HIGH COURT: PRETORIA