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[2012] ZAECMHC 11
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Laman (Pty) Ltd v Afropulse 497 (Pty) Ltd (2223/1) [2012] ZAECMHC 11 (8 August 2012)
IN THE HIGH COURT OF SOUTH AFRICA
EASTERN CAPE HIGH COURT: MTHATHA
CASE NO: 2223/1
Heard on: 25/06/12
Delivered on: 08/08/12
In the matter between:
LAMAN (PTY) LTD
….............................................................................
Applicant
and
AFROPULSE 497 (PTY) LTD
…...........................................................
Respondent
_____________________________________________________________
JUDGMENT: APPLICATION FOR LEAVE TO APPEAL
____________________________________________________________
NHLANGULELA J:
[1] On 26 January 2012 I granted summary judgment
against the applicant to pay the respondent a sum of R783 624.00,
being a
refund arising from payment for certain building blocks which
had not been delivered. The applicant now applies for leave to appeal
that judgment.
[2] The grounds of appeal are set out in the notice of
application for leave to appeal. Briefly stated, the grounds are that
I erred
in failing to appreciate that:
(a) the contents of paragraph 2 of the plaintiff’s
affidavit in support of the summary judgment application failed to
establish
that the deponent had personal knowledge of the facts.
(b) the deponent failed to establish in the affidavit
that he could swear positively to the facts verifying the cause of
action.
(c) the dispute raised by the applicant in the opposing
affidavit that the respondent was not Profit Partners could only have
been
resolved in a trial, not in the application for summary
judgment.
(d) the question of discovery of documents does not
arise in summary judgment proceedings and that, in any event, it was
not incumbent
upon the defendant to produce all the evidence in
support of its defences as raised in the opposing affidavit.
(e) the test for summary judgment is not whether the
defence raised by the defendant was: “not inherently and
seriously convincing.”
(f) the particulars of claim are excipiable in that they
are vague and embarrassing to the extent that:
(i) paragraph 3 of the particulars of claim refers to
annexure “A” as being a written agreement of sale of
building
blocks whereas that annexure is a copy of the credit
application form.
(ii) the Standard Conditions of Sale (annexed to the
particulars of claim) was not referred to, pleaded or explained, and
yet the
respondent relied upon it in its application for summary
judgment.
(iii) for the respondent to make a case for the
applicant’s repudiation of the agreement, it was necessary for
it to plead
that the adjustment to the prices which the applicant
made was not agreed to by the parties.
(iv) the pleading by the respondent in paragraph 4 of
the particulars of claim that it completed a credit application form,
marked
as annexure “B”, was erroneous because annexure
“B” is annexed to the particulars of claim as being the
Standard Conditions of Sale.
(v) the respondent failed to properly plead and show how
it arrived at the amount of R783 624,00 as claimed in the particulars
of
claim.
(vi) the Memorandum and a schedule of deliveries which
the respondent put up in the particulars of claim and relied on in
the application
for summary judgment as being part of a written
agreement of sale (annexure “A”) and/or the Standard
Conditions of
Sale (annexure “B”) could not have been
part of those instruments because they were not marked and not
referred to
in the particulars of claim.
[3] In my understanding of the grounds for leave the
attack against the judgment is simply that the finding that the
provisions
of Rule 32 (2) of the rules of this Court were satisfied
by the respondent is wrong. Further, the applicant for leave says
that
the Court erred in finding that the contents of the opposing
affidavit raises no
bona fide
defence
.
[4] Subrule 13 (2) has been construed by the courts to
mean that:
(a) The affidavit in support of an application for
summary judgment should be made by the applicant herself/himself or
by any other
person who can swear positively to the facts;
(b) it must be an affidavit verifying the cause of
action and the amount, if any, claimed, and
(c) it must contain a statement by the deponent that in
her/his opinion
there is no
bona fide
defence to the action and
that the intention to defend has been delivered solely for the
purpose of delay.
These are the jurisdictional factors which an applicant
for summary judgment must meet in order to succeed. In my judgment I
found
that the respondent met all of them. It would certainly not
have met them if the applicant had presented a defence(s) which is
valid. I would agree with the applicant that the term: “not
inherently and seriously convincing” is not the test used
to
measure success or failure of the application for summary judgment.
[5] At this stage the Court is being called upon to
decide the application for leave. The test that is applicable at this
stage
of the proceedings has been stated to be whether reasonable
prospects of success on appeal exist. See the cases of
Capital
Building Society v De Jager And Others, De Jager And Another v
Capital Building Society
1964 (1) SA 247
(A);
S v Magadla
2010(2) SACR 316 (ECM) at 318-319, paras. [5] and [6]. Further, it
must be shown that the amount in dispute is not trifling; the
matter
is of substantial importance to one or both of the parties concerned;
and that a practical effect or result can be achieved
by the appeal.
See:
Herbestein And Van Winsen, The Civil Practice of the High
Court,
Volume 2 at page 1212. The latter requirements are common
cause. The former necessitates debate in this matter.
[6] On grounds (a) and (b) in paragraph 2 above,
Mr
Quinlan,
counsel for the applicant for leave, submitted that Mr
Booyens’ deposition in the affidavit for summary judgment on
behalf
of the respondent shows that he had no personal knowledge of
the facts stated therein in that he acquired knowledge of the matter
from accounting records and, for that reason, he was disqualified
from deposing to the affidavit on behalf of the respondent as
he
could not swear positively to the facts giving rise to the claim as
envisaged in Rule 32 (2).
Mr Quinlan’s
submission is
predicated on the statement by Mr Booyens which is encapsulated in
paragraph 2 of the particulars of claim.
For this submission he relies on the case of
Shackleton
Credit Management v Microzone Trading 88 CC
2010 (5) SA 112
(KZN)
at 115F, para. [7] where following is stated:
“The requirement that the founding affidavit be deposed to by
the applicant or some other person who can swear positively
to the
facts precludes the affidavit being deposed to by someone whose
knowledge of those facts is purely a matter of hearsay.
Thus a person
who deposes to such an affidavit on the basis that their information
comes from another source, whether another person
or from documents,
is not a person who can swear positively to the facts giving rise to
the claim. It is for that reason that the
application for summary
judgment in Raphael & Co v Standard Produce Co (Pty) Ltd [1951(4)
SA 244 (C)] was held to be defective.
The deponent to the affidavit
was the applicant's Cape Town attorney and the court said (at 245D):
'There is nothing from the circumstances of his making of this
affidavit which can lead the Court to the conclusion that it is
within his knowledge. The ordinary presumption would be that they are
facts which have come within his knowledge through his acting
for the
applicants in this matter.'
An affidavit by an attorney based on information given to the
attorney by the client does not comply with the rule because the
attorney is not in a position to swear positively to the facts. Such
an affidavit is nothing more than an affidavit of information
and
belief, containing inadmissible hearsay. An application founded on
such an affidavit is as a result defective.”
[7] Indeed if it was so that Mr Booyens’ knowledge
of the matter was based solely on the documents whose existence did
not
involve him, his statement in paragraph 2 would be, purely and
simply, an inadmissible hearsay. But
Mr De La Harpe
contended
that a focus on paragraph 2 to the exclusion of the statements by Mr
Booyens in paragraphs 1, 3 and 4 of the affidavit
is not an approach
that is prescribed in Rule 32 (2). He argued that the entire
affidavit of Mr Booyens should be considered, and
that if read
properly it will reveal that Mr Booyens had personal knowledge of the
facts that gave rise to the cause of action
on which the application
for summary judgment was based.
[8] I quote hereinbelow the contents of paragraphs 1, 2,
3 and 4 of the affidavit of Mr Booyens that was filed towards the
application
for summary judgment:
“1. I am an adult male businessman and the managing director of
the Applicant. I am, by virtue of my aforementioned capacity
and by
virtue of a resolution passed by the Applicant at East London on the
1
st
November 2011, authorized to depose to this Affidavit.
A copy of the aforementioned resolution is annexed to this affidavit
marked
“JBB1”.
2. I have the Applicant’s accounting records which relate to
the Respondent’s indebtedness to the Applicant to which
this
matter relates under my direct control and supervision;
3. The facts deposed to herein are within my personal knowledge and
are both true and correct.
4. I do hereby swear positively to the facts verifying the cause of
action as stated in the Summons, particulars of claim and annexures
thereto and verify in particular that the Respondent is indebted to
the Applicant in the sum of R783 624.00 together with
interest
thereon and legal costs as stated in the Summons, particulars of
claim and annexures thereto.”
[9] The reading of Mr Booyens’ affidavit is plain.
He is a managing director of the respondent, he is duly authorized to
represent
the respondent in the matter and that he has personal
knowledge of the facts verifying the cause of action as stated in the
summons,
particulars of claim and annexures thereto. He states
further in a language that brookes of no extra- ordinary
interpretation that
he has knowledge that the applicant is indebted
to the respondent in the specified sum of R783 624.00. The
annexures to his
affidavit are the Memorandum (setting out the terms
of the agreement of sale), Application for Credit Facilities,
Standard Conditions
of Sale, letter by the applicant committing
itself to deliver building blocks, a letter by the respondent asking
for an invoice
in order to effect payment of R1 526 323.66 and a
schedule of deliveries. In all these annexures there is a name of Mr
Booyens
imprinted on them, and he is cited therein as a contracting
party who represented the respondent during negotiations and making
of the contract. Consequently, Mr Booyens very obviously deposed to
facts on affidavit which emanated from his personal knowledge.
[10] It appears from the case of
Maharaj v Barclays
National Bank Ltd
1976(1) SA 18 (A) at 423D-E; and
Standard
Bank of S.A. Ltd v Secatsa Investments (Pty) Ltd
1999(4) SA 229
(C) at 235A-B that where the plaintiff is a corporate entity the
deponent may well legitimately rely on his/her personal
knowledge of
at least certain of the relevant facts and his/her ability to swear
positively to such facts on record in the company’s
possession.
What the annexures show is that Mr Booyens is not just a
representative director of the respondent, but he was also
involved
in the negotiations leading up to the making of the agreement of sale
and delivery of the building blocks.
[11] The case of
Shackleton, supra,
is
distinguishable from the present matter on the facts. There an
attorney who had no knowledge of the affairs of a company
(
Shackleton)
, his client, deposed to an affidavit placing
reliance on the documents of the company. The connection of the
attorney to the application
for summary judgment was only the
documents of the company which were given to him during consultations
for the purpose of making
an affidavit in support of the application
for summary judgment. He was never involved in the making of the
documents. He testified
on matters in the document which were foreign
to him. The court held that such an attorney could not swear
positively to the facts
as such facts were based on documents which
fell outside his personal knowledge. For that reason an application
for summary judgment
was refused; and rightly so in my view.
[12] Consequently, it cannot be said that the finding I
made that the affidavit by Mr Booyens complied with the provisions of
Rule
32 (2) is wrong.
[13] The grounds of appeal which are stated in paragraph
(c) and (d) above are equally without merit. I remain
unpersuaded
that the opposing affidavit filed by the applicant complies with the
provisions of Rule 32(3)(b). The applicant did not disclose
fully the
nature and grounds and material facts on which its defence was based.
I reiterate the reasons that I gave in the main
judgment. Save to
state that it was disingenuous of the applicant to deny knowledge
that Profit Partners were the names of the
respondent, not more
requires to be said.
[14] It appears very clearly in the Memorandum, annexure
“A”, that the parties concluded an agreement of sale
based
on fixed prices of,
inter alia,
the building blocks. It
is common cause that the supply of blocks, which were already priced,
stopped at the time when both parties
agreed to cancel their
agreement. In the circumstances, the issue of a different price of
blocks ruling at the time of despatch
could not arise; hence the
claim for the refund of R783 624.00 for blocks paid for but not
delivered. Put differently the
dispute sought to be raised by the
applicant that the correctness of the amount claimed required to be
assessed against some ruling
prices has no basis. The alternative
defence that the amount paid and/or the delivery of a correct number
of blocks ordered was
exhausted was yet again inappropriate if one
has regard to the schedule, annexure “C”, put up by the
respondent reflecting
a detailed account of short deliveries of
blocks for which the claim was made. In my view, a mere reference to
documents in the
opposing affidavit for use later on at the trial was
not a full disclosure as required in Rule 32(3)(b). An honest
litigant would
have told the Court on affidavit, without any
documents for that matter, the number of blocks delivered, the price
paid for them
and when exactly the alleged delivery and payment were
exhausted.
[15] I can do no better than quoting the words of
Coleman J in
Breitenbach v Fiat SA (Edms)(Bpk)
1976(2) SA 226
(T) concerning the consequences of non disclosure in the opposing
affidavit. The learned Judge said at 228-229:
“Another provision of the sub-rule which causes difficulty, is
the requirement that in the defendant's affidavit the nature
and the
grounds of his defence, and the material facts relied upon therefor,
are to be disclosed 'fully'. A literal reading of
that requirement
would impose upon a defendant the duty of setting out in his
affidavit the full details of all the evidence which
he proposes to
rely upon in resisting the plaintiff's claim at the trial. It is
inconceivable, however, that the draftsman of the
Rule intended to
place that burden upon a defendant. I respectfully agree, subject to
one addition, with the suggestion by MILLER,
J., in
Shepstone v.
Shepstone
,
1974 (2) SA 462
(N) at pp. 466-467, that the word
'fully' should not be given its literal meaning in Rule 32(3), and
that no more is called for
than this: that the statement of material
facts be sufficiently full to persuade the Court that what the
defendant has alleged,
if it is proved at the trial, will constitute
a defence to the plaintiff's claim. What I would add, however, is
that if the defence
is averred in a manner which appears in all the
circumstances to be needlessly bald, vague or sketchy, that will
constitute material
for the Court to consider in relation to the
requirement of bona fides. I would refer, in that regard, to the
decision in Herb
Dyers (Pty.) Ltd. v. Mahomed and Another,
1965 (1)
SA 31
(T), and to the dictum of WATERMEYER, A.J., as he then was, in
Chambers F v. Jonker,
1952 (4) SA 635
(C) at p. 638…
What I have set out in that regard is not a demand for, or an
encouragement to present, lengthy and prolix affidavits in summary
judgment cases. All that is required is that the defendant's defence
be not set out so baldly, 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 fuller or clearer version of the
defence which he claims to have.”
[16] The lesson to be derived from the case of
Breitenbach, supra,
is that the defendant resisting an
application for summary judgment is required to set out on affidavit
a defence(s) that is not
bald, vague, sketchy or laconical giving the
Court the impression that he/she has something to hide which would
frustrate the plaintiff
in achieving resolution of a dispute with
necessary expedition. The applicant filed an opposing affidavit
heedlessly of the warning
as issued in the case of
Breitenbach
.
And I rightly rejected the invitation to circumvent the application
by willy nilly referring the matter to trial on a mere hope
that some
documents will present a defence to the respondent’s claim at
the trial in due cause.
[17] I proceed to deal with the ground that the
particulars of claim were excipiable. I still do not agree. In my
view
Mr Quinlan’s
submission that the reading of the
particulars of claim together with documents annexed thereto led to
the cause of action being
vague and embarrassing has no substance. I
say so for the following reasons:
(1) There are two sets of indexed and paginated papers
which were placed before me during the hearing of the application for
summary
judgment. One set comprises the original bundle of pleadings.
The second set has the annexures paginated in a mixed up sequence,
albeit created out of the original papers.
(2) Attached to the original particulars of claim are: a
Memorandum, annexure “A”, on which the terms of the sale
agreement
are set out. Following annexure “A” there are
two papers: one is a document written on the letterheads of the
applicant
and signed by Mr Van Wyk of the applicant and Mr Booyens.
It is not marked and contains an undertaking by the applicant that it
will deliver certain goods on the next day. The second document is a
fax transmission made by Mr Booyens and addressed to the applicant
asking for a tax invoice so that payment of R1 526 323.66 could
be made. A document marked annexure “B” is entitled:
Application For Credit Facilities. This is made on a letterhead of
the applicant. It shows that the respondent applied for credit
facilities of the applicant, and was granted the same on the strength
of this document. The document incorporates a deed of suretyship,
a
second section, made by Mr Booyens for the due payment of debts
arising from the agreement of sale. There is also incorporated
in
annexure “B” a third section entitled: Standard
Conditions of Sale. Mr Booyens signed all these documents on behalf
of the respondent.
(3) The Memo (annexure “A”) refers to
annexures “A” and “B” that were required to
be completed
by Mr Booyens.
(4) In annexure “B”, reference is made,
below the section on suretyship, to the Standard Conditions of Sale
that must
be initialed by Mr Booyens.
(5) It seems to me that the Suretyship Agreement and
Standard Conditions of Sale are the sections of annexure “B”.
They
are not separate documents from that annexure.
(6) Annexure “B” is referred to in paragraph
4 of the particulars of claim, and by association a reference is made
to
the Suretyship agreement and Standard Conditions of Sale.
(7) Annexure “C”, is the Schedule on
deliveries of building blocks. It is referred to in paragraph 7 of
the particulars
of claim.
(8) It is, therefore, not correct that the Memorandum
was not referred to, pleaded or explained by the respondent in the
particulars
of claim as contended for on behalf of the applicant. The
cause of confusion of the annexures attached to the copy of the
particulars
of claim seems to me to have been caused by bad
pagination.
[18] The ground that the claim amount of R783 624.00
was not properly pleaded has no merit. The particulars of claim and
the
annexures thereto support the amount claimed.
[19] I was convinced during the hearing of the
application for summary judgment, just as at the present stage, that
the net effect
of the opposing affidavit is that the applicant did
not disclose the nature and grounds of the defences raised, and the
material
facts upon which the defences were based. It was obligatory
for the applicant to bring its opposing affidavit within the purview
of Rule 32(3)(b) as is shown in the following cases:
Central News
Agency v Cilliers
1971(4) SA 351 (NC) at 353;
Caltex Oil SA
Ltd v Webb And Another
1965(2) SA 914 (D) at 916; and
Soil
Fumigation Services Lowveld CC v Chemfit Technical Products (Pty) Ltd
2004(6) SA 29 (SCA) at para. 25. The applicant failed to discharge
this obligation. As a result there was no room for exercising
discretion in favour of the applicant in terms of Rule 32(5).
[20] I am not persuaded that the application for leave
carries any prospects of success on appeal. The application must
fail. The
costs will follow such a result.
[21] In the result the following order is made:
1. The application for leave to appeal is refused.
2. The applicant for leave to pay costs of the application.
______________________________
Z.M.
NHLANGULELA
JUDGE
OF THE HIGH COURT
Counsel for the applicant : Adv. P.D. Quinlan
Instructed by : V. Gwebindlala & Associates
MTHATHA.
Counsel for the respondent : Adv. D.H. De La Harpe
Instructed by : Drake Flemmer & Orsmond Inc
c/o JF Heunis & Associates
MTHATHA.