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[2024] ZAFSHC 341
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Capitalbox Green Energy Finance (Pty) Ltd v Baruk Petroleum (Pty) Ltd and Others (1734/2024) [2024] ZAFSHC 341 (22 October 2024)
IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
Reportable
/ Not reportable
Case
No.: 1734/2024
In
the matter between:
CAPITALBOX
GREEN ENERGY FINANCE(PTY) LTD
PLAINTIFF
and
BARUK
PETROLEUM (PTY)
LTD
FIRST
DEFENDENT
BARUK
PROPERTY 1 (PTY)LTD
SECOND
DEFENDENT
VUYOX
CAPITAL (PTY) LTD
THIRD
DEFENDENT
Neutral
Citation:
Coram:
Van Rhyn J
Heard:
19 September 2024
Delivered:
22 October 2024
ORDER
1.
The first defendant is ordered to
deliver/return the following equipment to the plaintiff:
1.1
3 x Kodak 10kW Single Phase (3 Phase compatible);
1.2
1 x Life PO4 Lithium 30/24;
1.3
1 x Life PO4 Lithium 10/8;
1.4
48 x 545W JA Solar;
1.5
1 x GENERAC PME 30S Generator;
1.6
1 x Monitoring Device.
2.
Summary judgment in respect of the
remainder of the plaintiff’s claims is dismissed and
leave is
granted to the First, Second and Third Defendants to enter into the
principal action.
3.
Each party is liable for its own costs
of the summary judgment application.
JUDGMENT
Van
Rhyn J
[1]
The plaintiff, Capitalbox Green Energy Finance (Pty) Ltd seeks
summary judgment arising from a
written Master Rental Agreement
(Agreement) concluded on 21 November 2022 with the first defendant,
Baruk Petroleum (Pty) Ltd.
On 14 November 2022, prior to the
conclusion of the Agreement, Baruk Property 1 (Pty) Ltd, cited as the
second defendant and Voyox
Capital Pty Ltd, the third defendant,
entered into guarantee agreements with the plaintiff and bound
themselves as guarantors and
co-principal debtors with the first
defendant in favour of the plaintiff. The Agreement, Annexure ‘A’
together with
the two Guarantee Agreements, Annexure ‘B’
and Annexure ‘C’ are annexed to the particulars of claim.
[2]
The plaintiff seeks judgement against the defendants jointly and
severally, the one paying the
other to be absolved, for:
1.
delivery/return of
1.1
3 x Kodak 10kW Single Phase (3 Phase compatible);
1.2
1 x Life PO4 Lithium 30/24;
1.3
1 x Life PO4 Lithium 10/8;
1.4
48 x 545W JA Solar;
1.5
1 x GENERAC PME 30S Generator;
1.6
1 x Monitoring Device.
2.
Payment of the amount of R1 351 543.28;
3.
Payment of interest at the rate of 17,5% per annum from date of
service of summons to date
of payment in full;
4.
Costs on attorney and client scale.
[3]
Summons was served upon the defendants on 10 April 2024. The
defendants filed their notice of
intention to defend on 30 April
2024. The defendants failed to deliver a plea within the time
prescribed by the Uniform Rules of
Court. The plaintiffs thereupon
delivered a Notice of Bar on 4 June 2024 which elicited a plea on the
11
th
of June 2024.
[4]
The plaintiff then applied, in terms of Rule 32, for summary judgment
which was delivered on 28
June 2023. The application for summary
judgment did not state that the matter will be set down for hearing
on a stated day not
being less than 15 days from the date of delivery
thereof, as provided for in subrule 32(2)
(c)
. Furthermore, the
defendants failed to file their answering affidavit timeously, and
only eventually did so on 13 August 2024,
subsequent to the matter
being postponed to the opposed roll for hearing on 19 September 2024.
[5]
The plaintiff filed heads of argument as required in terms of the
Rules of Court. However, the
defendants failed to adhere to the time
periods and only filed their heads of argument on the afternoon
before the hearing of this
matter.
[6]
The amended Rule 32(1) reads:
‘
The plaintiff may
after the defendant has delivered a plea, apply to court for summary
judgment on each of such claims in the summons
as is only –
(a)
on a liquid document;
(b)
for a liquidated amount in money;
(c)
for delivery of specified movable property; or
(d)
for ejectment;
Together with any claim
for interest and costs.’
[7]
The object of summary judgment procedure is the time and
cost-effective disposal of litigation
in matters that are amenable to
the process and in which a defendant is not able to show that it has
a legitimate defence to an
action and has sought to defend it merely
for the purpose of delay.
[1]
The
procedure is aimed at preventing a defendant from raising a bogus or
sham defence which is bad in law, in order to unjustifiably
delay a
plaintiff from obtaining what is due to it.
[2]
[8]
The plaintiff avers in its particulars of claim that the movable
equipment/goods (equipment) was
delivered to the first defendant upon
signature of the Agreement. It was an express term of the Agreement
that the first defendant
would rent the equipment for a period of 10
years payable by way of monthly rental payments of
R19 581.77,
the first payment to be made on 21 November 2022.
[9]
In the event of the first defendant failing to make payment in terms
of the Agreement on the due
date, such overdue amounts shall bear
interest at a rate of 17.5% from the due date of payment until the
actual date of payment.
Paragraph 8.5 of the particulars of claim
reads as follows:
‘
Should the First
Defendant default in the punctual payment of any instalment or any
other amount falling due, or fail to observe
and perform any other of
the terms, conditions and/or obligations of the agreement, the
Plaintiff is entitled in its election and
without prejudice to any
rights to:
8.5.1
Require specific performance.
8.5.2
Cancel the agreement and demand return of the goods whereupon the
Defendant shall forthwith return the goods
to the Plaintiff and
Plaintiff shall be entitled to claim as liquidated damages payment of
all amounts then due in respect of the
Agreement.’
[10]
It is furthermore alleged that the first defendant breached the
Agreement by failing to make regular payments
in terms of the
Agreement. On 16 January 2024 a notice of breach was sent to the
first defendant demanding it to rectify its breaches
of the Agreement
within five business days as from date of transmission thereof,
failing which, the Agreement will be cancelled.
[11]
The deponent to the plaintiff’s affidavit in support of the
application for summary judgment stated
that ownership of the
equipment shall not pass to the first defendant at any time during or
after the expiry of the rental period
or after termination of the
agreement. It is common cause that the Agreement does not fall within
the ambit of the
National Credit Act 34 of 2005
. The plaintiff stated
that, as a result of the breach by the first defendant, the plaintiff
cancelled the agreement. The amount
outstanding in terms of the
agreement amounts to R1 351 543.28 reflected in the
certificate of indebtedness appended
to the particulars of claim and
marked ‘Annexure E’. The plaintiff alleges that the claim
as set out in the particulars
of claim is a liquidated amount of
money which falls within the ambit of
Rule 32(1)
(b)
.
[12]
The defendants oppose the application on the following grounds:
In the plea the
defendants stated as that:
(a)
the first defendant would rent the goods for a period of ten years;
(b)
the agreement was a simulated agreement in that the first defendant
was renting the goods and
transfer of the property to the first
defendant would pass upon the expiry of the 10-year period;
(c)
the first defendant furthermore pleads that ‘the solar was
insufficient to cover the entire
property’ and the first
defendant’s obligation to pay rental was reciprocal to the
plaintiff’s obligation to
ensure that the installed solar
system would carry out the purpose for which it was intended.
In the answering
affidavit the defendants stated that:
(d)
a request has been made for a formal breakdown of all the outstanding
arrears in terms of the
rental, interest and the costs which has not
been supplied to the defendants;
(e)
with reference to clause 6.2.1 and 6,2.2 of the Agreement, the
plaintiff is not entitled to claim
the amount sought;
(f)
the plaintiff’s termination and cancellation of the agreement
is unlawful;
(g)
the plaintiff may not claim ‘specific performance in the
form of rental and interest for
the entire contract period and in
addition to this, claim the return of the assets and cancellation of
the agreement’;
(h)
the damages claimed by the plaintiff, amount to the total rental
amounts and interest for the
remainder of the lease period being
approximately 102 months;
(i)
it is denied that the guarantors/co-principal debtors being the
second and third defendants received
notice of the alleged breach of
the Agreement;
(j)
it is furthermore stated that it is not the operation of the assets
that is insufficient
but rather the power for a certain area and
workshop is insufficient. A clarification will be addressed in an
amendment of the
plea yet to be filed by the defendants.
[13] In
terms of clause 1.1.7 of the Agreement the ‘commencement date’
means the date upon which the
last of the equipment is actually
delivered to the first defendant’s premises as reflected in the
delivery notes executed
by the first defendant, subject thereto that
if the aforesaid date falls more than 14 days after the intended
commencement date
as set out on the schedule, then the commencement
date shall be deemed to be the intended commencement date. The
‘conclusion
date’ means the date upon which the agreement
is concluded in accordance with clause 2.
[14]
The Agreement was signed on 21 November 2022 by the representative of
the plaintiff and the representative
of the first defendant. In terms
of the document with the heading: ‘First Amended Master Rental
Agreement’, appended
to the particulars of claim, the initial
term is indicated as ten years. However, the ‘initial term’
in accordance
with the provisions of clauses 1.1.11, means:
‘
. . . the number
of calendar months specified in the schedule reckoned from the
commencement date. If the commencement date is not
the first day of a
calendar month, then the initial term will comprise the period
between the commencement date and the last day
of the calendar month
in which the commencement date occurs plus the number of calendar
months specified in the schedule (reckoned
from the first day of the
calendar month immediately subsequent to the calendar month in which
the commencement date occurs’.
[15]
In terms of the provisions of clause 6.1 the ‘PERIOD OF USE AND
ENJOYMENT’, the Agreement will
commence on the commencement
date and will continue indefinitely until terminated by three
calendar months written notice of termination
given by either party
provided such notice may not be given to be effective prior to the
end of the initial term.
[16]
During argument the discrepancies pertaining to
the duration of the Agreement, with reference to the period
of ten
years stated by the plaintiff and admitted by the defendants, the
definition or meaning of initial term as contained in
clause 1.1.11
read with the contents of clause 6.1, were addressed by both parties.
Ms De Kock contended that the defendants could
have filed an
exception to the particulars of claim in the event of any
uncertainty, which they did not. On behalf of the defendants,
it was
argued that no reference was made by the plaintiff when the actual
delivery of the equipment occurred, hence the period
of use and
enjoyment of the equipment cannot be calculated.
[17]
I am of the view that, notwithstanding the fact that the defendants
admitted that the first defendant would
rent the goods for a period
of ten years, the period for the use and enjoyment of the equipment
can only be ascertained if the
commencement date, with reference to
the date upon which the last of the equipment was actually delivered
to the first defendant’s
premises and as reflected in the
delivery notes executed by the first defendant, has been pleaded by
the plaintiff.
[18]
Without due regard to the actual duration of the
contractual agreement between the parties, it is not possible
to
calculate the damages as claimed by the plaintiff.
[19]
Clause 2.1 provides that the agreement will become binding when the
party signing last in time signs the
agreement (signature date).
Clause 2.2 provides as follows:
‘
Notwithstanding
clause 2.1 above, clause 4 to 13 of this agreement are subject to the
fulfilment of the suspensive conditions (if
any) set out in the
schedule, within 30 (thirty) days of the signature date’.
[20]
In the document presumed to be the ‘schedule’ even though
it is titled the ‘First Amended
Master Rental Agreement’
(and to which the Agreement is appended), under the heading
‘Suspensive Conditions’
the following is stated: ‘List
of conditions: Personal Guaranteed from DWW DU Plessis Id xxxxxxx.
Intercompany Guarantee
between Baruk Property 1 and Vuyox Capital
(Pty) Ltd’.
[21]
The two intercompany guarantees Annexure ‘B’ and Annexure
‘C’ are appended to the
particulars of claim. No
reference is made in the plaintiff’s particulars of claim of a
personal guarantee from D D W Du
Plessis, the director of first,
second and third defendants, and no such guarantee is appended to the
papers.
[22]
The fulfilment of a condition must be alleged and proved by the party
relying on the contract.
[3]
Clause 2.4 of the Agreement provides that the suspensive conditions
have been inserted for the benefit of the plaintiff, which
will in
its sole discretion be entitled to waive fulfilment thereof by notice
in writing to the first defendant signed by a director
of the
plaintiff. Clause 2.5 furthermore provides that if all of the
suspensive conditions have not been fulfilled by the date
for the
fulfilment or such later date as may be notified in writing by the
plaintiff, the agreement will not automatically lapse.
The plaintiff
shall thereafter be entitled to give written notice to the first
defendant that unless the unfulfilled suspensive
conditions are
fulfilled within 14 days of the date of receipt of the notice, the
period of fulfilment or waiver of the suspensive
conditions will
expire.
[23]
The plaintiff did not plead that the agreement was subject to the
suspensive condition that a personal guarantee
by D D W du Plessis be
delivered nor that such a condition has been complied with. A copy of
a guarantee by D D W du Plessis has
not been appended to the
particulars of claim.
[24]
Even though the defendants did not rely upon the non-fulfilment of
the above- mentioned suspensive condition,
not in the plea nor in the
answering affidavit, I am of the view that this aspect cannot merely
be ignored. The particulars of
claim is not a model of clarity. The
same can be said in respect of the defendants’ plea and
answering affidavit. It is quite
possible that the plaintiff waived
the mentioned suspensive condition’s fulfilment, however the
ordinary rules relating to
the proof of a waiver apply and this
aspect can be dealt with during the trial.
[25]
From what can be ascertained, the gist of the defendants’
defence to the plaintiff’s claim is
that the plaintiff failed
to perform its contractual obligations towards the defendants, in
that the solar power is insufficient
for the purpose for which the
agreement was concluded. During argument Ms Froneman, counsel on
behalf of the defendants, tendered
the return of the equipment, as
set out in prayers 1.1 to 1.6 of the application for summary
judgment.
[26]
In the defendants’ answering affidavit deposed to by Mr D D W
Du Plessis, it is furthermore stated
that the first defendant did not
continue with the rental payments due to the dissatisfaction with the
equipment provided and the
capacity thereof. According to the Mr D D
W Du Plessis he engaged with the representative on behalf of the
plaintiff, Adam, regarding
the insufficient power provided by the
equipment. It was further stated that clarification will be addressed
in a proposed amendment
of the plea, which until the hearing of this
application, had not been filed by the defendants.
[27]
I may mention that the Uniform Rules of Court allow parties to amend
their pleadings. In this instance, the
defendants could have amended
their plea so as to align the defences raised in the affidavit.
Instead, mention is made that the
defendants contemplate an
amendment. A defendant who intends to disclose a
bona
fide
defence
in its affidavit which is not raised in its plea should first deliver
its notice of intention to amend the plea in terms
of Rule 28(1)(ii).
The court may, in terms of Rule 28(10), at any stage before judgment
grant leave to a party to amend any pleading
or document.
[4]
[28]
Clause 4.2 of the Agreement provides that the plaintiff purchased the
equipment from the supplier at the
first defendant’s specific
request for the purpose of renting the equipment to the first
defendant. Clause 4.3 provides that
the first defendant agrees that
it will not hold the plaintiff liable for any defects, breakdown or
insufficiency in the equipment
or as a result of a failure of the
equipment or the first defendant’s inability to use the
equipment. Any rights arising
from equipment related issues must be
exercised against the supplier of the equipment. The plaintiff
furthermore undertakes to
cede to the first defendant, any rights it
may have against the supplier under any guarantee or warranty
furnished by the supplier
in respect of the equipment.
[29]
None of the parties dealt with the provisions of the Agreement, as
contained in clauses 4.2 and 4.3, pertaining
to the insufficiency of
the equipment. The plaintiff did not identify this aspect nor the
confusion pertaining to the duration
of the agreement or the issue
regarding the fulfilment of all the suspensive conditions as a point
of law as required in terms
of subrule (2)
(b)
and
(c)
.
[30]
In
Maharaj
v Barclays National Bank Ltd
[5]
the court held as follows:
‘
Where
the defence is based upon facts, in the sense that material facts
alleged by the plaintiff in his summons, or combined summons,
are
disputed or new facts are alleged constituting a defence, the Court
does not attempt to decide these issues or to determine
whether or
not there is a balance of probabilities in favour of the one party or
the other. All that the Court enquires into is
(a) whether the
defendant had “fully” disclosed the nature and grounds of
his defence and the material facts upon which
it is founded, and (b)
whether on the facts so disclosed the defendant appears to have, as
to either the whole or part of the claim,
a defence which is both
bona fide and good in law. If satisfied on these matters the Court
must refuse summary judgment either
wholly or in part, as the case
may be.’
[31]
In
Breitenbach
v Fiat SA (Edms) Bpk
[6]
a
full bench held that the obligation that a defendant is to ‘fully’
disclose the nature and grounds of its defence
and the material facts
upon which it is based should not be taken literally, for to do so
would require the defendant to set out,
in full, all the evidence
which it intended to rely on in order to resist the plaintiff’s
claim at trial. Therefore, what
a defendant can reasonably be
expected to set out in its affidavit depends upon the manner in which
the plaintiff’s claim
has been formulated.
[7]
[32]
In my view it is not possible, on the limited basis of the curt
allegations in the particulars of claim and
the responses thereto in
the respondents’ answering affidavit, to safely and definitely
conclude exactly when the Agreement
between the parties commenced
with a view to calculate the amount of damages owing to the
plaintiff.
[33]
In this regard it is important to have regard to the allegations
contained in the plaintiff’s affidavit
in support of the
application for summary judgment that it is not necessary to set out
with particularity the calculation of the
amount claimed,
(R1 351 543.28) as the amount represents the arrears
together with the total rentals which would have
fallen due in terms
of the agreement.
[34]
Me De Kock argued that the plaintiff is entitled
to claim contractual damages, being the amount necessary
to put the
plaintiff, in monetary terms, in the position it would have been in
if the first defendant had not breached the agreement.
The
plaintiff’s claim is for liquidated damages on the basis that
the parties agreed that the amount of the first defendant’s
indebtedness to the plaintiff will be determined and proved by a
certificate signed by any manager or director of the plaintiff.
Such
a certificate will be
prima facie
proof of the amount of
indebtedness, the fact that any amount is due and payable and any
other matter in relation to the agreement
and will be valid as a
liquid document against the first defendant in any competent court
for purposes of obtaining provisional
sentence or summary judgment
against the first defendant.
[35]
In order to successfully resist the summary judgment application, the
defendants must satisfy the court that
they have a
bona fide
defence by disclosing fully the nature and the material facts upon
which the defence is premised. Whilst it is not required of
the
defendants to exhaustively deal with the facts and the evidence
relied upon, they must at least disclose the defences and the
material facts with sufficient particularity and completeness so as
to enable the court to decide whether the aforesaid discloses
a
bona
fide
defence.
[36]
The court in
Phillips
v Phillips and Another
[8]
held
as follows:
‘
[38] The court has
an overriding discretion whether on the facts averred by the
plaintiff, it should grant summary judgment or on
the basis of the
defence raised by the defendants, it should refuse it. Such
discretion is unfettered. If the court has a doubt
as to whether the
plaintiff’s case is unanswerable at trial, such doubt should be
exercised in favour of the defendant and
summary judgment should be
refused. The court can exercise its discretion and refuse summary
judgment even if the requirements
resisting summary judgment have not
been met. Referring to the extraordinary and drastic nature of the
summary judgment remedy,
Corbett JA stated the following in the
Maharaj matter:
“
The grant of
the remedy is based on the supposition that the plaintiff’s
claim is unimpeachable and that the defendant’s
defence is
bogus and bad in law.”
[39] The test is whether
on the facts before it, the court is able to conclude that the
defence raised by the defendant is bogus
or bad in law. What falls to
be determined by this Court is whether, on the facts alleged by the
plaintiff in its particulars of
claim, it should grant summary
judgment or whether the defendant’s opposing affidavit
discloses such a bona fide defence
that it should refuse summary
judgment.’
[37]
I am of the view that the adjudication of the issues pertaining to
the determination of the initial term
of the Agreement, the duration
of the Agreement and the fulfilment of the suspensive condition(s)
(or any one or more of them)
would eventually boil down to the
interpretation of the Agreement and proper ventilation of the law of
contract which may very
well proffer a
bona fide
defence to
the defendants against the plaintiff’s claim.
[38]
The quantification of the contractual damages in the event of a
contract for an indefinite period cannot
be the subject of summary
judgment. The summary judgment application calls for strict
circumspection and judicial oversight in
balancing the rights of both
the plaintiff and the defendants. Summary judgment cannot be granted
where it is clear that some ventilation
of evidence is required in
order for the court to come to a decision.
[39]
To a certain extent both the plaintiff as well as the defendants are
successful regarding the application
for summary judgment. The return
of the equipment was tendered by the defendants during the hearing of
this matter. I am of the
view that given the partial success on both
sides, each party should be liable for its own costs of the summary
judgment application.
ORDER
[40]
In the result, the following order is made:
1.
The first defendant is ordered to delivery/return the following
equipment to the plaintiff:
1.1
3 x Kodak 10kW Single Phase (3 Phase compatible);
1.2
1 x Life PO4 Lithium 30/24;
1.3
1 x Life PO4 Lithium 10/8;
1.4
48 x 545W JA Solar;
1.5
1 x GENERAC PME 30S Generator;
1.6
1 x Monitoring Device.
2.
Summary judgment in respect of the remainder of the plaintiff’s
claims is dismissed and
leave is granted to the First-, Second- and
Third Defendants to enter into the principal action.
3.
Each party is liable for its own costs of the summary judgment
application.
I
VAN RHYN
JUDGE
OF THE HIGH COURT,
FREE
STATE DIVISION, BLOEMFONTEIN
Appearances
On
behalf of the Plaintiff:
ADV.
D DE KOCK
Instructed
by:
PHATSHOANE
HENNEY ATTORNEYS
BLOEMFONTEIN
On
behalf of the Defendants:
ADV.
M FRONEMAN
Instructed
by:
VAN
WYK & PRELLER ATTORNEYS
BLOEMFONTEIN
[1]
Joob
Joob Investments (Pty) Ltd v Stocks Mavundla Zek Joint Venture
[2009]
ZASCA 23
; 2009 (5)
SA
1 (SCA) para 29.
[2]
Arend
and Another v Astra Furnishers (Pty) Ltd
1974
(1) SA 298
(C) at 304G.
[3]
Resisto
Dairy (Pty) Ltd v Auto Protection Insurance Co Ltd
1963
(1) SA 632 (A).
[4]
Belrex
95 CC v Barday
[2020] ZAWCHC 149; 2021 (3) SA 178 (WCC).
[5]
Maharaj
v Barclays National Bank Ltd
1976
(1) SA 418
(A) at 426A-D.
[6]
Breitenbach
v Fiat SA (Edms) Bpk
1976
(2) SA 226
(T) at 228C-D.
[7]
Ibid
at 229B.
[8]
Phillips
v Phillips and Another
[2018] ZAECGHC 40.