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[2014] ZAGPPHC 253
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Born Free Investments 128 (Pty) Ltd v Makulu Plastics And Packaging CC (71816/13) [2014] ZAGPPHC 253 (2 April 2014)
SAFLII
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Certain
personal/private details of parties or witnesses have been
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IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
CASE
NO: 71816/13
DATE:
2/4/2014
In
the matter between
BORN
FREE INVESTMENTS 128 (PTY)
LTD Applicant
vs
MAKULU
PLASTICS & PACKAGING
CC Respondent
JUDGMENT
BAM
J
1.
On 26 November 2013 the applicant instituted action against the
respondent by way of motion procedure, applying for:
(i) an order declaring
that any lease agreement the parties may have entered into on
the terms of a draft lease agreement,
(Attached as “FA 11”
to the applicant’s founding affidavit), (apparently drafted on
19 November 2009), or on
the terms and conditions in paragraphs 4 to
4.10 of the respondent’s particulars of claim filed under case
number 32512/2011
in the South Gauteng High Court (“FA 14.2”),
has been cancelled on 9 October 2013; and
(ii) that the respondent
be evicted from the applicant’s immovable property at 23 Derick
Road, Spartan, Kempton Park.
2.
In the application lodged by the respondent in the South Gauteng High
Court under case number 32512/2011, where the applicant
was cited as
the first respondent, the respondent applied for an order against the
third respondent in that matter, the Ehkhurleni
Metropolitan
Municipality, to secure the supply of electricity services to the
premises situated at […….]. That application
was
apparently disposed of by a full bench of the South Gauteng High
Court. With regard to the existence of a lease agreement at
the time,
the said court ruled that such agreement indeed existed at the
relevant time.
3.
Further litigation between the parties followed. The respondent
issued summons in the Johannesburg court under case number 32512/2011
praying for a declaratory order that the parties entered into a lease
agreement for 5 years calculated from 1 October 2009. The
applicant
defended the case and filed its plea, and a counter claim for the
cancellation of the lease and eviction of the respondent
from the
premises in question. The latter document was signed on 12 December
2011 and served on the respondent’s attorneys
on 20 December
2011. The pleadings have closed and the matter is pending. It appears
that a trial date has been allocated.
4.
From a list reflecting rental payments made by the respondent,
attached to the applicant’s founding affidavit as annexure
FA17, it appears that the respondent regularly, on a monthly basis,
made payments to the applicant from March 2010 until August
2013. It
is alleged by the applicant that respondent has defaulted with the
payments since September 2013.
5.
On 9 October 2013 the applicant’s attorneys addressed a letter
to the respondent pointing out,
inter alia,
the respondent’s
alleged failure to effect payment for the rent for September and
October 2013. The respondent’s attorneys,
in a letter dated 12
September 2013, addressed to the applicant’s attorneys,
recorded that the respondent elected to “
henceforth”
pay the rent directly to Nedbank. The reason for this was
explained by the respondent to be that Nedbank threatened to take
possession
of certain machines, used by the respondent on the
premises, on account of the parties involved, including the
applicant, failed
to pay the lease of the machines. For that reason
the monthly rental was diverted to Nedbank. The applicant’s
attorneys were
not amenable to accept the explanation and on 9
October 2013 informed the respondent’s attorneys that the
applicant has elected
to cancel the alleged written and/or oral
agreements between the parties.
6.
The present application was served on the respondent’s
registered office on 29 November 2013. On 4 December 2013 the
respondent’s
Notice to Oppose was filed. Due to the fact that
the respondent failed to file its answering affidavit timeously, the
application
was enrolled on the unopposed roll of 11 February 2014.
On the same date the respondent’s answering affidavit was
filed,
however without any condonation application. The matter was
postponed
sine die.
Apparently the parties agreed that the
respondent’s attorney would file, within a few days, a
condonation application explaining
the late filing of the answering
affidavit. That did not happen.
7.
The matter was subsequently enrolled on the opposed motion roll for
the week commencing on 24 March 2014. Due to the fact that
the
respondent did not file an application for condonation for the late
filing of the answering affidavit, nor its Practice Note
and Heads of
Argument, timeously, the matter was stood down until 25 March.
8.
On 25 March the respondent applied for condonation, firstly for the
late filing of the answering affidavit, and secondly for
the late
filing of the practice note and heads of argument.
9.
The two condonation applications were opposed by the applicant on the
basis that no good cause was shown by the respondent for
its delay in
that no reasonable explanation was advanced for the respondent’s
failure to comply with the Rules of Court and
the Practice Rules,
secondly, that the respondent failed to satisfy the Court that it has
a
bona fide
defense, and thirdly, that the respondent failed
to show that the applicant will not be prejudiced.
10.
In the case of
Laerskool Generaal Hendrik Schoeman v Bastian
Financial Services (Pty) Ltd
2012(2)SA 637 (CC), at 640H-I, in
respect of the first requirement of condonation applications, it was
re-stated that an applicant
for condonation must give full
explanation for the delay and that the explanation must be
reasonable.
11.
Pertaining the question whether there is a reasonable explanation for
the non-compliance with the Rules of Court, the following
facts have
to be taken into account.
(i) The main application
was served on the respondent on 28 November 2013.
(ii) The Respondent’s
Notice to Oppose was served on 4 December 2013.
(iii) The answering
affidavit had to be filed by 30 December 2013;
(iv) The answering
affidavit was served on the applicant’s attorneys on 5 February
2014 and filed with the Registrar on 11
February 2014;
(v) On 11 February 2014
the matter was on the unopposed motion court roll and on that day
postponed
sine die
;
(vi) On 12 February 2014,
the applicant’s attorneys addressed an Email to the
Respondent’s attorneys stating, amongst
others, that the
respondent’s attorney undertook to file the condonation
application in respect of the late filing of the
answering affidavit
within 2 days after the postponement date, that the respondent did
not pay the rent for January and February
2014, and that the 24
th
March 2014 was allocated by the Registrar or the hearing of the
matter;
(vii) On 3 March 2014 the
applicant served the Notice of Set Down, the applicant’s
Practice Note and the applicant’s
Heads of Argument on the
respondent’s correspondent, Docex;
(viii) For an unexplained
reason only the Notice of Set Down reached the respondent’s
attorney’s offices on 10 March
2014;
(ix) On 17 March 2014 the
respondent’s attorney enquired from the applicant’s
attorneys whether the applicant intended
to file a replying affidavit
as well as heads of argument
12.
The explanation advanced on behalf of the respondent for not
complying with the Court Rules in regards to the late filing of
the
answering affidavit and the respondent’s failure to file heads
of argument is justifiably criticized by Mr du Preez SC,
appearing
for the applicant. To some extent the explanation is rather vague and
the reasons flimsy. For instance, the reason advanced
by the
applicant’s attorneys that they experienced a very busy time in
December and that they were involved in other matters,
cannot be a
reasonable explanation. The explanation that the respondent’s
attorneys only became aware of the date of hearing
on 10 March 2014
must be considered against the fact that the applicant’s
attorneys informed the respondent’s attorneys
already on 12
February of the date of hearing.
13.
However, pertaining to the second requirement, concerning a
bona
fide
defense, it appears from the applicant’s founding
affidavit that the issue whether a valid lase contract was at any
stage
concluded between the parties, and on what basis the respondent
still occupies the premises, was the basis of an ongoing dispute
since about 2009. This was a crucial question in two cases, of which
one is still pending in the Southern Gauteng High Court. I
have
referred to the two matters herein before.
14.
Although the present application for the respondent’s eviction
is based on the allegation that the respondent failed to
pay any rent
for September and October 2013, and December 2012, the issue about a
lease agreement between the parties is still
part of the disputed
facts.
15.
In my view, although the requirement of a
bona fide
defense
was perhaps not adequately addressed by the respondents in the
condonation applications, it appears from the applicant’s
founding papers that it cannot be said that the averments pertaining
to a defense concerning the existence of a lease agreement
and the
payment, or failure to pay the rent, do not constitute a
bona
fide
defense.
16.
The issue of prejudice to the applicant must be considered against
the background of the dispute about the existence of a lease
agreement between the parties and the allegations in respect of the
payment of the lease amount.
17.
If the reasonableness of the explanation would have been the only
consideration, the respondent would have been in trouble.
However, in
exercising my discretion in regards to the question whether the
condonation applications should be granted or not,
the issue in
regards to the existence of a
bona fide
defense tilted the
scales in favour of the respondent. The condonation applications were
accordingly granted.
18.
Although the applicant applied for an order declaring that the lease
agreement, if any, was cancelled in September 2013, the
basis for the
eviction is the allegation made by the applicant that the respondent
failed to pay any rent for September and October
2013.
19.
The existence of a lease agreement between the parties, if any, and
the terms thereof, was at all relevant times integrated
aspects, as
it was in the preceding and pending litigation between the parties.
However, in this application it is clear that the
applicant’s
case for the eviction is based on
new
grounds being the
alleged failure of the respondent to pay the lease for a period after
the closing of the pleadings in the South
Gauteng case.
20.
Accordingly, I agree with the submission made by Mr du Preez that the
respondent’s contention that the South Gauteng case
creates the
situation of
lis alibi pendens,
is without substance.
21.
The issue of the respondent’s alleged failure to pay the lease
amount for September and October 2013 to the applicant
is clearly the
crux in this application. In this regard Mr Verster, appearing on
behalf of the respondent, referred to the elaborated
and detailed
explanation advanced by the respondent in its answering affidavit.
The explanation involves action instituted by Nedbank
against the
applicant, the respondent and a party referred to as PSA for the
possession of certain machinery used by the respondent
on the
premises in question which the respondent allegedly leased from the
applicant.
22.
It was common cause that the respondent on a monthly basis did pay
certain amounts in respect of the lease of the premises and
the
machinery to the applicant from 2010 to August 2013 although the
computation and calculation of the amounts were in dispute.
It is
however common cause that the applicant accepted the amounts paid by
the respondent.
23.
Pertaining to the rental amounts the respondent alleged it paid to
Nedbank, it is the applicant’s contention that the
respondent
was not entitled to pay any rental amount due to the applicant to
Nedbank. In this regard the applicants argument included
the
following:
(i) The judgment in
favour of Nedbank that prompted the respondent to pay the money to
Nedbank was already abandoned at the time
the alleged payments were
made to Nedbank;
(ii) The payments were
not made on behalf of and for the benefit of the applicant;
(iii) The payments were
not made before the 3
rd
of each month and thus In breach
of any alleged lease agreement.
24.
The applicant further disputed the allegations made by the respondent
about the machinery issue and the threats by, and the
litigation
instituted by Nedbank, that caused the respondent to pay certain
rental amounts to Nedbank and not to the applicant.
25.
During argument Mr du Preez made a calculation he submitted was based
on the figures pertaining to the monthly lease paid by
the
respondent, as it is reflected in statements drawn up by the
applicant. According to Mr du Preez the respondent was in arrears
in
the amount of R127 000. In this regard it seems that Mr Du Preez
calculation differs materially from the averments made
by the
applicant in its founding papers where reference is made, in the
notice of motion, to two months’ rental arrears.
26.
Mr Verster, appearing on behalf of the respondent, on the other hand,
submitted that the respondent overpaid the applicant in
the excess of
an amount of R400 000. In this regard Mr Verster based his
calculations on, amongst others, rental increase
over the time on
which the parties did not agree.
27.
The issues pertaining to the question why the respondent did not pay
certain rental amounts to the applicant but instead to
Nedbank, the
calculation of any amounts due to, or by the applicant, and the terms
of the lease agreement, in my view, cannot be
resolved on the papers.
It appears that, for instance, that the calculation of the rental
due, and paid by the respondent, calls
for actuarial calculations,
which is lacking.
28.
The applicant was clearly well aware of the fact that factual
disputes would be the course of the day in this application. The
applicant, in its founding papers referred to the material disputes
between the parties emanating from the litigation in South
Gauteng.
Despite the anticipated disputes the applicant elected to approach
this court by way of motion proceedings, at its own
risk.
29.
Despite the fact that the parties did not suggest it, I have
considered to refer the matter to evidence, or trial, but decided
against such order mainly in view of the pending action in South
Gauteng between the parties. In my view it will be expedient,
and in
the interests of justice, and both parties, if the issues between the
parties be consolidated and ventilated in the said
pending action
where the parties surely will adduce oral evidence.
30.
I have requested Mr Verster to address me on the question whether
penalty costs should not be considered against the respondent
for its
failure to file its condonation application and heads of argument
timeously. In this regard I re-state that the condonation
applications were granted mainly because of the fact that the
respondent appeared to have a
bona fide
defense.
Mr
Verster said he would abide the court’s decision I that regard.
31.
In my view the respondent’s attorneys’ handling of the
matter is actually unacceptable. I have already alluded to
the rather
flimsy explanation advanced by the respondent in that regard. It
appears that the respondent should bear the wasted
costs caused by
the condonation applications.
32.
Accordingly I make the following order.
1.
The application is struck off with costs.
2.
The respondent is ordered to pay the applicant’s costs in
regards to the arguing of the condonation
applications on 25 March
2014.
A
J BAM
JUDGE
OF THE HIGH COURT
28
March 2014