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[2010] ZAFSHC 176
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Iveco South Africa (Pty) Ltd v Botha (5972/2008) [2010] ZAFSHC 176 (3 February 2010)
FREE
STATE
HIGH
COURT, BLOEMFONTEIN
REPUBLIC
OF
SOUTH AFRICA
Case
No. : 5972/2008
In
the matter between:-
IVECO
SOUTH AFRICA (PTY) LTD
Plaintiff/Applicant
and
DIRK
SAMUEL
BOTHA
Defendant/Respondent
HEARD
ON:
2
FEBRUARY 2010
JUDGMENT
BY:
MOOLLA,
AJ
DELIVERED
ON:
3
FEBRUARY 2010
[1]
The matter which serves before me is an application in terms of Rule
33(4) by the plaintiff/applicant for what is commonly referred
to as
the separation of issues. The defendant/respondent opposed the
application.
[2]
Rule 33(4) reads as follows:
“
If,
in any pending action, it appears to the court
mero
motu
that there is a question of law or fact which may conveniently be
decided either before any evidence is led or separately from
any
other question, the court may make an order directing the disposal of
such question in such manner as it may deem fit and may
order that
all further proceedings be stayed until such question has been
disposes of, and the court shall on the application of
any party make
such order unless it appears that the questions cannot conveniently
be decided separately.”
[3]
The context of the application is an action instituted by the
plaintiff against the defendant in this court for the following
relief:
1.
Payment of the sum of R1 507 147,95;
2.
Interest thereon at 15,5% per annum from 18 July 2007 to date of
final payment;
3.
Pay costs on an attorney/client scale.
4.
Further or alternate relief.
[4]
The gravamen of the plaintiff’s case was as follows:
Pursuant
to an agreement for the sale of shares and a loan account in a
company by the defendant to the plaintiff the defendant,
in essence,
warranted that the company was free from liabilities save for the
loan account.
[5]
In addition, the plaintiff gives certain undertakings of indemnity,
for the record they read as follows:
“
9.
INDEMNITY
9.1
Without prejudice to the warranties and representations in the
Agreement, or of the rights
and legal remedies available to the
Purchaser, the Seller hereby indemnifies the Purchaser against:
9.1.1 any obligation of
the Company which may exist or arise in any way whatsoever before or
in respect of the period
before the Effective Date other than the
loans;
9.1.2 all claims,
obligations, damages or losses and/or shortages which may be suffered
by the Purchaser and which may
arise out of, result from or be caused
by a breach and/or non fulfilment of any of the warranties and/or
representations in this
Agreement.
9.1.3 All costs, on the
scale as between Attorney and own client, of any opposition in terms
of Clause 9.2 against payment
of such claims;
9.2
The Purchaser undertakes to advise the Seller timeously of any claim
which may arise against
the Purchaser in terms of paragraph and
should the Seller require the Purchaser to oppose or resist such
claim, to do so on condition
that:
9.2.1 The Seller shall
first provide the Purchaser with security to the satisfaction of the
Purchaser for payment of
the said claim and all costs on a scale as
between attorney and own client which the Purchaser may incur or
which may be ordered
against the Purchaser as a result of the
opposition of the Purchaser to the claim;
9.2.2
Should the Seller not require the Purchase to oppose the claim
timeously then the Purchaser will be entitled to
pay such claim and
recover the full amount therefore together with all costs incurred on
a scale as between attorney and own client
from the Seller.”
[6]
It is alleged by the plaintiff/applicant that the defendant breached
the agreement by failure to disclose a liability to the
Innerwest
Council in the sum of R330 190,48 which allegedly existed as a defect
of debt of the sale. The said sum was in
respect of duties and
levies including penalties and interest all by Duewest (the company
forming the subject matter of the sale)
to the Innerwest Council in
terms of a law administered by SARS.
[7]
As the defendant failed to discharge the liability the amount
attracted interest and penalties totalling R1 176 957,45.
[8]
On 17 July 2007 the plaintiff discharged the outstanding liability
and claims that it became entitled to recover the full amount.
[9]
The defendant raised, by way of a special plea, a defensive
prescription. This was the correct procedure as a plea of
prescription cannot be raised by way of exception.
[10]
The plaintiff responded to the plea by way of a replication in which
it takes issue with the defendant on his special plea
of
prescription.
[11]
It is in this context that the issue of the Rule 33(4) application
for separation of issues is made. Mr. Vetten, counsel
for the
applicant, argued that a separation of issues would favour the
balance of convenience and result in the issue of prescription
being
dealt with summarily and the outcome thereof would give direction to
the future of this matter.
LEGAL
PRINCIPLES OF APPLICATION
[12]
The entitlement to seek the separation of issues was created in the
rules so that an alleged
lacuna
on the plaintiff’s case
can be tested; or simply so that a factual issue can be determined
which can give direction to the
rest of the case and, in particular,
to obviate the leading of evidence. The purpose is to determine
the plaintiff’s
claim without the costs and delays of a full
trial. It has been held that this procedure is so important
that an attorney
should as soon as pleadings have closed make a
strategic assessment of the real trial needs of the case bearing in
mind the duty
to eliminate avoidable delays and costs.
See:
RAUFF
v STANDARD BANK PROPERTIES (A DIVISION OF STANDARD BANK OF SA LTD)
AND ANOTHER
2002 (6) SA 693
(W) at 703 I - J.
[13]
The word “convenient” within the context of the subrule
conveys not only the notion of facility or ease or expedience,
but
also the notion of appropriateness and fairness. It is not the
convenience of any one of the parties or of the court,
but the
convenience of all concerned that must be taken into consideration.
The function of the court in an application under
the subrule is to
gauge to the best of its ability the nature and extent of the
advantages which would flow from the granting of
the order sought and
of the disadvantages. If it appears that the advantages would
outweigh the disadvantages, the court
would normally grant the
order. It should, however, not be assumed that that result is
always achieved by separating the
issues. An important
consideration will usually be whether or not a preliminary hearing
for the separate decision of specified
issues will materially shorten
the proceedings, though the nature of a particular case may be such
that proper consideration of
overall convenience may involve factors
other than those relating only to the actual duration of a hearing.
The convenience
must be demonstrated and sufficient information must
be placed before the court to enable it to exercise its discretion in
a proper
and meaningful way. The relief is not a mere formality
and the convenience must be demonstrated. Where grave prejudice
may result for the opposing party should separation be ordered, it
would be a further factor, which the court will take into account
when considering a separation.
See
generally:
Superior
Court Practice
at
pages B1-233 to B1-236.
APPLICATION
OF THE AFORESAID LEGAL PRINCIPLES
[14]
The applicant has argued that there needs to be a determination of
the law and facts and that the balance of convenience would
result in
separation and a practical and speedy disposition of the issues given
that the applicant was in the hands of the municipality
otherwise.
[15]
Mr. Zietsman, for the respondent, argued that the application for
separation was convenient only for the applicant and was
in fact a
proxy for an adjournment;
15.1 that, for the,
an agreement had been reached in terms of Rule 37 on 15 December 2009
in terms of which it was recorded
that there was no issues for
separation.
He
referred the court to two appeal court decisions the essence of which
was that to enable a party to resile from an agreement
in terms of
Rule 37 will be to defeat its very purpose in the absence of special
circumstances; that the issue of a separation
was only raised for the
first time by the applicant on 15 January 2010; lastly the difficulty
that would be encountered in proving
the damages.
[16]
In dealing with the respective submissions of counsel the court finds
as follows:-
1.
The Rule 37 agreement of 15 December 2009 was essentially an
affectation of a proprietary process
envisaged by the provisions of
Rule 37. Mr. Vetton argued that this is normally the case when
counsel is not involved in
the Rule 37 process. This is further
enforced by the reinforcement of an attorney, Patlansky, when he
avers that the issue
of separation arose at the stage when counsel
was involved in a matter.
Whilst
it may be true that in many instances attorneys undertake a notional
exercise in going through the Rule 37 motions, a court
cannot anoint
with legal rectitude a practice for which this Rule was never
conceived. It would be manifestly incorrect for
the court to do
so.
2.
Whilst the court has some sympathy with Mr. Zietsman’s argument
on the incidence of onus
being difficult and can prove between the
original debt and the damages claimed, the court is of the view,
nevertheless, that in
the application of a proportionality test this
argument is subsumed by the undoubted overall convenience that a
separation would
offer and a speedy resolution and finality.
The court finds that this constitutes a special circumstance which
would in effect
permit an overriding of the Rule 37 agreement;
accordingly the court is inclined to grant the relief sought in part.
[17]
Turning to the issue of costs the court finds as follows:
1.
The issue of prescription was raised as a special plea of 19 November
2008. The plaintiff
had a significant opportunity from that
date or at the latest when the pleadings had closed, to make a
strategic assessment of
the real trial needs of the case bearing in
mind the duty to eliminate avoidable delays and costs.
See:
RAUFF
v STANDARD BANK PROPERTIES
,
supra
.
[18]
Having regard to the court’s earlier finding in a restrict of
the Rule 43 process and conduct herein and further having
regard to
the fact that there was a legal obligation on the applicant to make a
decision on a possible Rule 33(4) application after
the close of
pleadings, it would be manifestly unjust and inequitable if a
costs order was made as sought by the applicant.
[19]
Accordingly it is ordered as follows:-
1.
That the respondent’s Special Plea of Prescription, involving
issues of both fact and law,
be heard and decided separately from and
before all other issues in the matter and that all such other issues
be stayed pending
the determination and disposal of the respondent’s
Special Plea of Prescription.
2.
That the costs of this application be paid by the applicant.
_______________
E.A.
MOOLLA, AJ
On
behalf of plaintiff/applicant: Adv. Dirk
Vetten
Instructed
by:
Martini-Patlansky
Attorneys
c/o
Lovius Block
BLOEMFONTEIN
On
behalf of defendant/respondent: Adv. Paul Zietsman SC
Instructed
by:
McIntyre
& Van der Post
BLOEMFONTEIN
/sp