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2024
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[2024] ZAFSHC 316
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Blatew Security (Pty) Ltd v Matjhabeng Local Municipality (3494/2023) [2024] ZAFSHC 316 (11 October 2024)
IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
Reportable:
NO
Of
interest to other Judges: NO
Circulate
to Magistrates:
NO
Case
no:
3494/2023
In
the matter between:
BLATEW
SECURITY (PTY) LTD
Plaintiff
And
MATJHABENG
LOCAL MUNICIPALITY
Defendant
Coram:
DAFFUE J
Heard
:
7 AUGUST 2024
Delivered
:
11 OCTOBER 2024
Summary:
The
plaintiff, a service provider delivering security services, issued
summons against a local municipality for payment of the amount
of R
20 835 186.26 plus interest and costs for services
allegedly rendered during the period April 2020 to 31 March 2023.
In
its amended plea the defendant inter alia relied on a special plea
based on non-compliance with clause 21.2 of the Service Level
Agreement between the parties, effectively pleading that the
plaintiff’s claim had prescribed. The plaintiff’s summary
judgment application was opposed, primarily on the same basis. Having
considered the application, the court refused summary judgment
and
granted leave to the defendant to oppose, costs to be costs in the
main action.
ORDER
1.
The application for summary judgment is refused.
2.
Leave is granted to the defendant to defend
the action.
3.
Costs of the summary judgment proceedings
shall be costs in the main
action.
JUDGMENT
Daffue
J
Introduction
[1]
This is an opposed summary judgment application which
has been
postponed more than once. The defendant filed a notice to amend its
plea on receipt of the application for summary judgment
which caused
the first postponement. Hereafter and just prior to the hearing of
the application the amended plea and answering
affidavit were filed.
This caused a further postponement. The plaintiff filed a
supplementary affidavit to deal with the issued
raised in the amended
plea.
The
parties
[2]
The plaintiff is Blatew Security (Pty) Ltd, a company
with its
registered office in Welkom, Free State Province.
[3]
The defendant is Matjhabeng Local Municipality, a municipality
duly
incorporated in terms of the laws of the country and regarded as an
organ of state within the sphere of local government.
Its principal
office is situated in Welkom. The city of Welkom and several
surrounding towns fall within its jurisdiction.
The
relief sought
[4]
The plaintiff seeks summary judgment against the defendant
for:
‘
1.
Payment of the amount of R20 835 186.26.
2.
Interest thereon calculated at 10.5% tempore
morae from the date of
the letter of demand to the date of full payment.
3.
Costs of this suit.’
Common
cause facts ex facie the pleadings
[5]
The only pleaded fact admitted by the defendant is its
own
particulars. It elected to merely note the citation and description
of the plaintiff as well as the allegation that this court
has
jurisdiction to adjudicate the dispute.
The
claim and the defence
[6]
In its initial plea to the plaintiff’s amended
particulars of
claim, the defendant relied on a bare denial. It denied each and
every allegation by the plaintiff in respect of
its cause of action
as contained in paragraphs 4 to 10 of the amended particulars of
claim. In its plea on the merits the defendant
denied that (a) the
Service Level Agreement (SLA) was entered into between the parties,
(b) the defendant issued a letter of appointment
to the plaintiff,
(c) the plaintiff delivered security services to and on behalf of the
defendant, (d) the defendant acknowledged
its indebtedness to the
plaintiff on 2 March 2022 in the amount of R 1 808 825, (e)
it made a partial payment of R 313 725
on 15 October 2022 and
finally, (f) an amount of R20 835 186.26 remains
outstanding pertaining to the plaintiff’s
invoices for the
period April 2020 to 31 March 2023.
[7]
In its amended plea the defendant relies on two special
pleas, one
based on clause 21.2 of the SLA and the other on clause 15.1 of the
SLA. As strange as it may sound, whilst relying
on the SLA in its
special pleas, it elected once again to deny each and every
allegation made by the plaintiff in paragraphs 4
to 10 of its amended
particulars of claim. Therefore, the existence of the SLA and
services rendered in terms thereof are denied.
Litigation
history
[8]
The combined summons was issued on 10 July 2023. After
the defendant
filed an exception to the particulars of claim, it was amended on 27
November 2023. On 2 February 2024 the defendant
filed its plea to the
plaintiff’s amended particulars of claim which caused the
plaintiff to file an application for summary
judgment on 14 February
2024, indicating that the plaintiff would apply for summary judgment
on 14 March 2024.
[9]
On 23 February 2024 the defendant filed a notice of intention
to
oppose the summary judgment application, but failed to file an
answering affidavit. On 13 March 2024 and a day before the intended
hearing on 14 March 2024, the defendant filed an application for
postponement, claiming that it was advised to amend its plea.
Consequently, the application was postponed by agreement to the
opposed roll of 20 June 2024, costs to stand over for later
adjudication.
On 14 May 2024 the defendant filed its amended plea and
on 7 June 2024 its answering affidavit to the summary judgment
application.
This caused a postponement of the application to the
opposed roll of 1 August 2024.
[10]
On 4 July 2024 the plaintiff filed a supplementary affidavit to deal
with the
defendant’s special plea. After receiving heads of
argument and listening to the oral submissions, the court reserved
judgment
on 1 August 2024 and granted leave to the parties to file
supplementary heads of argument. Leave was also granted to the
plaintiff
to file a draft order, bearing in mind interaction in
court.
Evaluation
of the evidence and submissions made
[11]
The court
considering an application for summary judgment merely has to enquire
whether the defendant has pleaded a bona fide defence,
ie that the
defendant has sufficiently disclosed the nature and grounds of the
defence and whether on the facts so disclosed the
defendant appears
to have a bona fide defence good in law. The amendment of rule 32 has
not changed the principles summarised long
ago in
Maharaj
v Barclays National Bank Ltd.
[1]
The defendant is not at the summary judgment stage required to
persuade the court of the correctness of the facts stated, or in
the
event of a dispute, that the preponderance of probabilities favours
their version. However, the defence must be valid in law.
This being
the legal position, it is now time to evaluate the evidence and
submissions.
[12]
In my view the defendant’s amended plea is excipiable, but the
plaintiff
did not file an exception in this regard. The defendant’s
main defence is that no SLA was entered into, but in its two special
pleas it relies on the very same SLA relied upon by the plaintiff.
However, bearing in mind that these are summary judgment proceedings,
I shall consider the defences raised.
[13]
The second special plea is really irrelevant and does not take the
matter any
further. It is the defendant’s case that this matter
should not be heard by the High Court as the parties agreed on
mediation
in the event of a dispute. Clause 15 deals with dispute
resolution, but it is not the defendant’s case in the pleadings
that
a dispute has arisen between the parties pertaining to service
delivery and/or the execution of the SLA. No bona fide defence has
been made out in this regard.
[14]
Before I deal with the defence based on clause 21.2 of the SLA, it is
apposite
to mention the following: (a) the duration of the agreement,
as initially agreed upon, was for a period of three months only from
1 March 2020 as provided for in clause 4.1; (b) in clause 4.2 the
parties agreed that the duration ‘may be extended by mutual
agreement on an month to month basis subject to the terms and
condition contained in this agreement’; (c) on 28 February
2020
the plaintiff was officially appointed by the defendant’s
acting municipal manager as service provider to provide security
services in critical arrears of the Matjhabeng Municipality,
effectively from 1 March 2020.
[15]
The plaintiff attached to its particulars of claim various official
orders
and requisitions issued by the defendant over a period from
June 2020 to February 2022 as is apparent from annexure C thereto. It
also attached statements and tax invoices covering a period till
March 2023. Although there is no indication that the majority
of
these invoices found their way to the defendant, it transpired that
several have been received. A Mr Thembisa Mgxabayi acknowledged
receipt thereof under his signature.
[16]
In their supplementary heads of argument the parties inter alia dealt
with
the amounts of the various invoices acknowledged in writing.
Although they differed from each other, I did the same exercise. I
agree with the defendant’s counsel in respect of the amounts
mentioned by him, but need to indicate that he failed to take
the
statement of 30 November 2020 in consideration, indicating the
balance due as on that date in the amount of R 985 697.97.
Consequently, the total of invoices and statements for which a
representative of the defendant signed, amounts to R 7 583 543.80.
In my view the figure in excess of R 10 million arrived at by the
plaintiff’s counsel is wrong. I seriously considered granting
summary judgment for the amount calculated by me and to grant leave
to the defendant to defend the remainder of the claim. However,
the
aspects dealt with in the next paragraphs persuaded me not to do so.
[17]
It is now appropriate to deal with clause 21.2 relied upon by the
defendant
in its first special plea. It reads as follows:
‘
Any claim, however
arising, must be commenced formally by service of court summons or
process initiating arbitration proceedings
within 1 (one) year after
the claimant becomes aware (or ought or reasonably have become aware)
of the facts which give rise to
the claim and, in any event
regardless of the knowledge of the claimant, by no later than 2 (two)
years after the date of the alleged
breach of contract, delict or
other or omission giving rise to a cause of action. This expressly
overrides any situation provision
or rule of common law which
otherwise may apply.’
[18]
In
Barkhuizen
v Napier
[2]
(
Barkhuizen
)
the facts were the following. The plaintiff in the court a quo, cited
as the applicant in the Constitutional Court, entered into
a
short-term contract of insurance in terms whereof he was inter alia
insured against the loss resulting from damage to his motor
vehicle.
When the vehicle was damaged, he notified the insurer of the
occurrence and claimed the amount of the loss. The claim
was
repudiated. Two years later, he instituted action against the
insurer, but his claim was met with a special plea, alleging
that the
insurer had been released from liability because the applicant had
failed to serve summons within 90 days of being notified
of the
repudiation
of his claim.
[19]
The
plaintiff in
Barkhuizen
relied on a constitutional challenge to the contractual terms, inter
alia stating that the relevant clause relied upon by the insurer
unreasonably and unjustifiably limited his right to access to court,
guaranteed in s 34 of the Constitution. The Constitutional
Court
considered the doctrine of
pacta
sunt servanda,
public
policy, the right of access to courts and the alleged
unreasonableness of the specific clause and concluded as follows:
[3]
‘
In
these circumstances I am unable to conclude that the 90-day period
allowed to the applicant to sue is so unreasonable that its
unfairness is manifest and that therefore its enforcement would be
contrary to public policy.’
The court continued
further on to mention the following:
[4]
‘
But
this
[the failure of the applicant to
provide reasons for non-compliance with the time clause]
has consequences for the appeal. In the
result, without facts establishing why the applicant did not comply
with the clause, I am
unable to say that the enforcement of the
clause would be unfair or unjust to the applicant. For all we
know he may have neglected
to comply with the clause in circumstances
where he could have complied with it. And to allow him to avoid its
consequence in these
circumstances would be contrary to the doctrine
of
pacta sunt servanda
.
This would indeed be unfair to the respondent.’
[20]
I point out that the defendant did not specifically plead that the
plaintiff’s
claim had prescribed, but merely pleaded that the
claim did not comply with clause 21.2 and therefore, it should be
dismissed with
costs. In this regard it is submitted that the cause
of action arose on 31 April 2020 (
sic
) and that the summons
was only issued on 27 July 2023 and thereupon served upon the
defendant. I do not agree that the cause of
action arose at the end
of April 2020. It is apparent from the various tax invoices that
services were rendered until 2023, although
the last tax invoice of
which receipt was acknowledged is dated 28 October 2021. In
accordance with the general principles, prescription
would only start
to run from the date that payment became due in respect of each and
every tax invoice. Consequently, the defendant
is wrong to submit
that the complete cause of action arose at the end of April 2020.
[21]
The
plaintiff relies on an acknowledgement of debt dated 2 March 2022.
Having said this, it shall be noted that the plaintiff failed
to file
a replication to deal with the defendant’s special plea. I am
not convinced that the aspects raised by the defendant
were properly
dealt with during argument which leaves me in doubt as to whether
summary judgment should be granted for the amount
mentioned above. It
is trite that an acknowledgement of debt after a claim has already
prescribed does not interrupt prescription.
[5]
[22]
Although I am satisfied that the defendant is kicking for touch and
probably
unnecessarily delaying the plaintiff’s claim, I am not
prepared to grant summary judgment in circumstances where the
defendant
has raised non-compliance with clause 21.2. The trial court
will be in a much better position to consider the aspect, after
hearing
evidence and perhaps with the benefit of amended pleadings
and/or full legal argument. The special plea of prescription is a
legal
defence to which the plaintiff did not even file a replication.
I do not have to decide whether this special plea will succeed after
a full-blown trial. Summary judgment proceedings are not appropriate
to deal with this defence.
Conclusion
[23]
I reiterate that I do not have to determine the merits of the defence
or the
prospects of success at this stage of the litigation.
Consequently, the application should be refused. The appropriate
order in
line with these kinds of circumstances is that the costs of
the summary judgment application shall be costs in the main action.
There is no reason to grant costs against the plaintiff at this stage
of the proceedings.
Order
[24]
The following order is made:
1.
The application for summary judgment is refused.
2.
Leave is granted to the defendant to defend
the action.
3.
Costs of the summary judgment proceedings
shall be costs in the main
action.
DAFFUE
J
Appearances
For
plaintiff:
Adv S
Ngombane
Instructed
by:
Thebe
Attorneys Inc
BLOEMFONTEIN.
For
defendant:
Adv
KP Mohono
Instructed
by:
Tshangana
and Associates Inc
BLOEMFONTEIN.
[1]
1976 (1) SA 418
(A) at 426.
[2]
2007 (5) SA 323 (CC).
[3]
Ibid
para 67.
[4]
Ibid
para 85
[5]
Desai
NO v Desai & Others
1996 (1) 141 (A) 147 G.