Combustion Technology (PTY) Ltd v Technoburn (PTY) Ltd (4634/02) [2002] ZAWCHC 47 (3 September 2002)

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[2002] ZAWCHC 47
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Combustion Technology (PTY) Ltd v Technoburn (PTY) Ltd (4634/02) [2002] ZAWCHC 47; 2003 (1) SA 265 (C) (3 September 2002)

IN THE HIGH COURT OF
SOUTH AFRICA
(CAPE
OF GOOD HOPE PROVINCIAL DIVISION)
CASE NO: 4634/02
In
the matter between:
COMBUSTION
TECHNOLOGY (PTY) LTD
Applicant
And
TECHNOBURN
(PTY) LTD
Respondent
JUDGMENT: 3 September
2002
VAN
REENEN, J:
1] The
applicant on 30 May 2002 applied for an order winding-up the
respondent provisionally on the basis that it is unable to pay
its
debts.
2] The
respondent opposes the application and filed an answering affidavit
in response to which the applicant filed a replying affidavit.
3] The
applicant bases its
locus
standi
on an averment that the respondent is indebted to it in an amount of
R165 644,82 in respect of the balance of goods sold and delivered
during 2000/2002. As regards the respondent’s inability to pay its
debts the applicant’s case is based solely on inferences
drawn from
the fact that, despite meetings between the applicant’s and the
respondent’s representatives on three occasions between
29 April
2002 and 6 May 2002, during which the respondent’s queries were
dealt with; promises of payment made; and a written
demand made on
20 may 2002, no payment had been received.
4] Exactly
two months after the respondent had received a copy of the
application, namely on 23 July 2002, the respondent’s attorneys
addressed a letter to the applicant’s attorneys advising them that
according to the respondent’s calculations the nett amount
owing by
it to the applicant was an amount of R95456,23 and that it had been
paid into its trust account. The respondent’s attorneys
on its
behalf tendered payment of that amount in full and final settlement
of “your client’s liquidation application, as also
the
Magistrates Court matter under case number 26146/2000” subject to
further specified conditions.
5] The
respondent in its answering affidavit which was deposed to on 26 June
2002, referred to the fact that the amount of R95456,23
had been paid
into its attorney’s trust account and undertook to pay in a further
amount of R70188,59 which together with the first
amount would be
held in trust until the winding-up application is finalised. That
was done, presumably, to lend credence to the
respondent’s
allegation that “it is prepared to, and will, pay the applicant as
soon as the dispute in respect of the amount
owing can be resolved.”
6] The
letter of the respondent’s attorney of 23 July 2002 and the
contents of the respondent’s answering affidavit elicited the
following response from the applicant’s attorneys in a letter dated
30 July 2002 as regards the further conduct of the matter:
“
Against payment by
your client of its admitted indebtedness to our client, as well as
our client’s party and party costs arising
from the winding up
application, our client is prepared to withdraw such application
subject to our client reserving its rights
regarding the balance of
its claim against your client.”
In the event that the
aforegoing does not find favour with your client, we call upon you to
effect payment of your client’s admitted
indebtedness to our client
forthwith, the issue of costs to stand over to be determined by the
court at the hearing of the matter.
For the sake of clarity we
record that should this proposal find favour with your client, the
only issue to be determined at the
hearing of the matter will be the
issue of costs. Similarly in this regard all or client’s rights
regarding the balance of its
claim remain reserved.
Should
neither of the aforesaid proposals find favour with your client, our
client shall have no alternative but to proceed with its
application
which would result in our client incurring further unnecessary costs.
In this event, we are of the view that your client’s
conduct would
be improper and vexatious and we hold instructions to seek a punitive
costs order against your client in the event
that the matter must of
necessity proceed as aforesaid.”
7] As
neither of the proposals were acceptable to the respondent the
applicant filed a voluminous replying affidavit in which it,
for the
reasons set out therein, intimated that it no longer persisted in
seeking an order for the provisional winding-up of the
respondent but
that it would seek an order in the following terms:
“
That Respondent be
ordered and directed to forthwith make payment of its admitted
indebtedness to Applicant in the sum of R95 456,23
by way of bank
guarantee cheque or cheque drawn on its attorney’s trust account by
no later than 12h00 on Friday, 30 August 2002.”
8] Advocate
Selikowitz who represented the applicant at the hearing indicated
that such relief was being sought in terms of the prayer
for “such
other and/or alternative relief as may be deemed fit and proper” in
the notice of motion.
9] In
view of the applicant’s stance that it no longer persists in the
seeking of an order for the provisional winding-up of the
respondent,
the relief claimed in paragraphs 1, 2 and 3 of the Notice of Motion
is refused.
10] Is
the applicant entitled to an order in the terms set out in paragraph
7 above under the prayer for other or alternative relief?
11] The
extent to which a plaintiff or an applicant may be granted relief in
an application or action under a prayer or claim for
further and/or
alternative relief is not devoid of difficulty.
I.
Isaacs: Beck’s Theory and Principals of Pleading in Civil Actions
(5
th
Ed at 61) says that it “cannot be precisely indicated” whilst
HJ
Erasmus et al: Supreme Court Practice
,
at B1 – 130 A content themselves with that it “will not assist a
plaintiff who seeks relief of quite a different nature from
that
asked for in the summons”. It is not possible to distill generally
applicable criteria from the decided cases in which the
ambit of a
prayer of that nature (the so-called
clausule
salutare
)
has been considered (See:
Trustees of the Orange River Land and Asbestos Company v King and
Others
6 GHC 260;
Colonial
Treasurer v Senekal Municipality
1910 OPD 7
;
Queensland
Insurance Co Ltd v Banque Commerciale Africaine
1946 AD 272
at 286;
Rooibokoord Sitrus (Edms) Bpk v Louw’s Creek Sitrus Kooperatiewe
Maatskappy Bpk
1964(3) SA 601 at 608 A;
Luzon Investments (Pty) Ltd v Strand Municipality and Another
1990(1) SA 213 (C) at 229 G – 230 B). Berman J in
Luwala and Others v Port Noloth Municipality
1991(3) SA 98 (C) at 112 D – E provided the following, in my
respectful view, instructive, exposition thereof:
“
Such
a prayer can be invoked to justify or entitle a party to an order in
terms other than that set out in the notice of motion
(or summons
or declaration) where that order is clearly indicated in the founding
(and other) affidavits (or in the pleadings) and
is established by
satisfactory evidence on the papers (or is given), cf
Trustees
of the Orange River Land and Asbestos Co v King and Others
6 HCG 260 at 296 – 297. Relief under this prayer cannot be
granted which is substantially different to that specifically
claimed,
unless the basis therefor has been fuly canvassed, viz the
party against whom such relief is to be granted has been fully
apprised
that relief in this particular form is being sought and has
had the fullest opportunity of dealing with the claim for relief
being
pressed under the head of ‘further and/or alternative
relief.’
12] The
clear purpose of the applicant’s application was to bring about a
concursus
creditorum
resulting in the “hand of the law being laid on the estate”
(per Innes CJ in
Walker v Syfret NO
1911 AD 141
at 166) with a view to achieving an orderly realisation
of assets and the distribution of the proceeds thereof to creditors.
As
was said by
De
Villiers CJ in
Collett
v Priest
1931 AD 290
at 299, in relation to the nature of sequestration
proceedings, but in my view equally applicable to winding up
proceedings,
“…
there is no claim
by the creditor against the debtor to pay him what is due nor is the
court asked to give any judgment, decree or
order against the debtor
upon any such claim”
Not
only is the relief that is now being sought namely, payment
(ignoring the frills and furbelows) substantially dissimilar to the
relief sought in the notice of motion but the respondent has not been
apprised that such relief would be sought, and furthermore
has not
had an adequate opportunity of considering and dealing with it in the
answering affidavit.
13] In
the premises I have come to the conclusion that the applicant is not
entitled to the order it now seeks under the prayer for
other and/or
alternative relief.
14] the
only remaining issue is which of the parties should be held liable
for the costs of the application. Advocate Maher, who
appeared for
the respondent contended that costs should follow the result and that
the scale thereof should be a punitive one. Advocate
Selikowitz
contended that the respondent should be ordered and directed to pay
the applicant’s costs of the application –
up
until and including 23 July 2002 on a scale as between party and
party; and
as
from 24 July 2002, on the scale as between attorney and own client.
15] As
the consequence of the dismissal of the relief the applicant sought,
the respondent is the successful party and is entitled
to its costs
unless the general rule that costs follow the result is deviated
from. The effect of the costs order that the applicant
seeks is that
the successful party to the proceedings should be ordered to pay the
unsuccessful party’s costs. Although a court
in the exercise of
its discretion is entitled to make such an order, it in the absence
of special circumstances, is unusual (See:
Kent
v Bevern and Co
1907 TS 395
at 401;
Palley
v Knight NO
1961(4) SA 633 (SR) at 638 in fine – 639 A;
Erasmus
v Grunow en ‘n Ander
1980(2) SA 792 (O) at 797 H). The instances where such orders have
been made are where the court disapproved of the successful
party’s
conduct (See:
Mahomed
v Nagdee
1952(1) SA 410 (A) at 420 – 421) such as where the successful
party misled the other party into litigating; caused unnecessary
litigation or procedural steps to be taken; or induced litigation by
the withholding of information (See:
Kent
v Bevern & Co
(supra) at 401 – 402;
Chenille
Industries v Vorster
1953(2) SA 691 (O) at 702 A;
De
Villiers v Soetsane
1975(1) SA 360 (ECD) at 363 A;
Nxumalo v Mavundla
2000(4) SA 349 (D) at 354 D – E).
16] The
special circumstances on which the applicant relies in seeking an
order of costs against the respondent are that it employed
the
stratagem of a bare denial of the quantum of the applicant’s claim;
that had it effected payment timeously of its admitted
indebtedness
in accordance with its undertaking to have done so, the application
would not have been brought; and that the application
was
necessitated by the respondent’s obstructionist and misleading
attitude and conduct before and after the launching of the
application,
more in particular after the respondent had quantified
its admitted indebtedness to the applicant in its attorney’s letter
of 23
July 2002.
17] The
respondent in corresponce and in its answering affidavit disputed the
quantum of its indebtedness to the applicant. The applicant
by
having requested that the respondent be ordered to pay an amount of
R95456,23, by implication, accepted that there is a genuine
dispute
in respect of R70188,59 of the amount it claims the respondent owes
it. That the respondent would dispute the quantum of
its
indebtedness is not surprising in view thereof that the amount owed,
on the basis of the different demands that the applicant
made, varied
from time to time. Although the dispute superficially appears to be
limited to the quantum of the respondent’s indebtedness,
the
dispute as set out in its answering affidavit, is more fundamental
namely, whether there is a written or oral agreement in existence
in
respect of discounts that the respondent claims it was entitled to;
the percentages of the discounts the respondent was entitled
to in
respect of different products; and whether the applicant has reneged
on the agreement.
18] It
is trite that a seller who claims payment of the purchase price in
respect of goods sold and delivered must allege and discharge
the
onus of proving the conclusion of a contract of sale, the terms
thereof and delivery of the goods sold in conformity with the
terms
of the contract (See:
Crispette
& Candy Co Ltd v Oscar Michaelis NO & Another
1947(4)
SA 521 (A) at 537). It is clear that the respondent disputes part of
its indebtedness to the applicant. Because of thát
dispute the
respondent, in my view, was justified to have refused to make payment
so as to force the applicant to prove, in a court
of law, the amount
it alleges the respondent owes it. The respondent in order to ward
off the application, on the basis of the information
at its disposal,
calculated what it believed its indebtedness to the applicant is and
tendered payment thereof in full and final
settlement and furthermore
paid it into its attorney’s trust account to demonstrate its
ability to pay that amount. The respondent’s
obvious strategy is
not to pay that amount to the applicant in order to force it to prove
the amount that it is entitled to. The
respondent’s conduct in
refusing to pay the applicant the amount it believes is owing, in my
view, is devoid of any reprehensibility.
I, accordingly, decline to
exercise my discretion in the applicant’s favour.
19] In
the premises, the applicant is ordered to pay the respondent’s
costs.
20] Although
there may be room for speculation thereanent I am not satisfied that
the respondent has succeeded in showing that the
application has been
brought for an ulterior purpose and accordingly am not prepared to
order that the costs awarded to the respondent
should be taxed on a
punitive scale.
_______________
D.
VAN REENEN