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2024
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[2024] ZAFSHC 362
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Maximum Profit Recovery (Pty) Ltd v Vaal Central Water Board (6120/2023) [2024] ZAFSHC 362 (13 November 2024)
IN
THE HIGH COURT OF SOUTH AFRICA
FREE STATE DIVISION,
BLOEMFONTEIN
Reportable
/
Not
reportable
Case number:
6120/2023
In
the matter between:
MAXIMUM
PROFIT RECOVERY (PTY) LTD
PLAINTIFF/
RESPONDENT
And
VAAL
CENTRAL WATER BOARD
DEFENDANT/
EXCIPIENT
Coram:
Loubser J
Heard:
26 July 2024
Delivered:
13
November 2024
Summary:
Exception by Defendant against Plaintiff’s
particulars of claim – whether cause of action disclosed
ORDER
1.
The exception is dismissed with costs on
the party and party scale, including the costs of counsel on scale C.
JUDGMENT
LOUBSER J
[1]
The Plaintiff in this matter issued summons
against the Defendant for payment of the amount of R14 507 168.30
plus interest
and costs on the scale as between attorney and own
client. The claim is founded upon a written service level agreement
concluded
by the parties on 9 April 2021 at Pretoria, alternatively
at Bothaville. The Defendant noted an exception to the Plaintiff’s
particulars of claim on the grounds that it failed to disclose a
cause of action and/or is vague and embarrassing. The exception
was
argued before this Court by counsel representing the parties, and
this is the Court’s judgment on the exception in question.
[2]
From the onset it needs mentioning that the
Defendant failed to give notice to the Plaintiff in terms of Rule
23(1)(
a
)
as far as the aspect of a vague and embarrassing pleadings is
concerned. The subrule provides as follows: ‘(a)
Where
a party intends to take an exception that a pleading is vague and
embarrassing, such party shall, by written notice, within
10 days of
receipt of the pleading, afford the party delivering the pleading, an
opportunity to remove the cause of complaint within
15 days of such
notice.”
This
has not been done by the Defendant, and therefore the question
whether the pleading is vague and embarrassing, is not properly
before the Court. As a result, only the question whether the
particulars of claim disclose a cause of action, needs to be
determined.
[3]
In the particulars of claim reference is
made to a copy of the service level agreement, which is annexed
thereto. This agreement
was entered into by the Plaintiff and
Sedibeng Water, the predecessor of the Defendant in its contractual
relationship with the
Plaintiff. This came about by the publication
of a government gazette which transferred the Free State area from
Sedibeng Water
to the Defendant. The Plaintiff alleges in the
particulars of claim that Sedibeng Water failed to provide the
Plaintiff with a
copy of the signed service level agreement which was
duly signed by its authorised representative, S. Dzengwa.
[4]
The Plaintiff went on to plead that in the
event of a finding that Dzengwa failed to sign the agreement, then
Sedibeng has accepted
the agreement by its conduct. It is pleaded
that Plaintiff provided Sedibeng with a draft agreement. Sedibeng
then revised the
agreement and emailed it back to the Plaintiff. The
Plaintiff signed the revised agreement, and provided Sedibeng with a
copy of
the agreement, as signed by the Plaintiff, on 9 April 2021.
Subsequent to that date, both the Plaintiff and Sedibeng Water
implemented
the service level agreement.
[5]
The exception filed is based on two
grounds. The first ground is aimed at the allegations referred to in
the two preceding paragraphs.
It is stated in the exception that the
Plaintiff is relying on an annexed written agreement which is not
signed by the Defendant.
The Defendant further points out that the
Plaintiff also rely on the tacit acceptance of the agreement on 9
April 2023 after the
Plaintiff had signed the agreement and emailed a
copy thereof to the Defendant. According to the Defendant, there are
contradictory
averments which fail to disclose a cause of action,
because the agreement provides in clause [1.5] that the agreement
shall commence
on the date of signature thereof.
[6]
In
The
Trustees for the time being of the
Children’s
Resources Centre Trust and Other v Pioneer Food (Pty) Ltd and
Others
[1]
the Supreme Court of Appeal stated that the test on exception is
whether on all possible readings of the facts no cause of action
is
made out. It is for the defendant to satisfy the court that the
conclusion of law for which the plaintiff contends, cannot be
supported upon every interpretation that can be put upon the facts.
[7]
In applying this principle, this Court is
mindful of the fact that the Plaintiff made the express averment in
its pleading that
the agreement was duly signed on behalf of Sedibeng
by S. Dzengwa. In this respect, the Plaintiff will be entitled to
call that
person at the trial to testify. In addition, the Plaintiff
may require the Defendant to make discovery at the close of
pleadings,
which may result in the discovery of a fully signed
agreement. Presently, the Plaintiff relies on its averment in the
particulars
of claim that the Defendant had failed so far to provide
it with a copy of the fully signed agreement. In addition, the
Plaintiff
made allegations in the pleading that the Defendant at the
very least gave its consent to the agreement tacitly, and
subsequently
implemented the agreement. On the basis of these
allegations, the Plaintiff will be entitled to present evidence at
the trial to
prove same.
[8]
In
this respect I find the remarks of Harms JA (as he then was) in
Telematrix
(Pty) Ltd t/a Matrix Vehicle Tracking v Advertising Standards
Authority SA
[2]
apposite:
“
Exceptions
should be dealt with sensibly. They provide a useful mechanism to
weed out cases without legal merit. An over-technical
approach
destroys their utility…..the response to an exception should
be like a sword that cuts through the tissue of which
the exception
is compounded and exposes its vulnerability”.
[9]
In the present matter, a sensible approach
shows that the Plaintiff has made sufficient averments to enable it
to present a case
at the trial. I am unable to find that the
Plaintiff has not displayed a case with legal merit in its
particulars of claim. Consequently,
the first ground of the exception
stands to fail.
[10]
In the second ground of the exception, it
is contended that the Plaintiff had failed to make the necessary
allegations to claim
payment from the Defendant. The contention is
that the Plaintiff asserts in the particulars of claim that the
liability of the
Defendant towards clients and the South African
Revenue Service had been reduced by millions of Rands due to a report
that the
Plaintiff had prepared in terms of the agreement. The
Plaintiff thus alleges that a financial benefit was obtained by the
Defendant,
and that it is entitled to claim 8% of that financial
benefit, which 8% represents the amount claimed. Since the
particulars of
claim and the agreement expressly records that payment
would only be due and owing to the Plaintiff upon receipt by the
Defendant
of the financial benefit, it was never pleaded by the
Plaintiff that the Defendant had actually received a financial
benefit following
the report of the Plaintiff, it is submitted. In
the absence of such an averment, the Plaintiff has failed to plead a
necessary
element to establish a cause of action, the Defendant says.
[11]
However, clause 3.1 of the agreement
provides that, should MaxProf (the Plaintiff) not be able to identify
any financial benefit
for the Defendant, then MaxProf shall not be
entitled to any fee in respect of the review. Clause 3.2 provides
that the Defendant
shall pay MaxProf 8% of the financial benefit
identified for the Defendant. Upon a proper interpretation of the
wording of these
two clauses, it is the identification of a financial
benefit by the Plaintiff that would entitle it to payment by the
Defendant.
[12]
On the other hand, as contended by the
Defendant, clause 3.4.1 states that payment is due and owing to
MaxProf by the Defendant
upon receipt of the financial benefit from
the Defendant’s suppliers and/or SARS. As a result, it appears
as if the term
‘financial benefit’ cannot be finally
interpreted at the exception stage. What is clear, though, is that
the saving
identified by the Plaintiff in its report, relates to a
saving in respect of its VAT liability. In my view, the trial court
will
be in a better position to interpret the term ‘financial
benefit’ finally after discovery has taken place and after
hearing the evidence presented. For the moment, there can be no doubt
that the Plaintiff’s reliance on clause 3.1 and 3.2
of the
agreement in its particulars of claim to the effect that Plaintiff
had obtained a financial benefit for the Defendant for
which it is
entitled to payment, appears to be justified. It follows that also
the second ground of the exception cannot succeed.
[13]
The
following
order is made:
1.
The exception is dismissed with costs on
the party and party scale, including the costs of counsel on scale C.
P.J. LOUBSER, J
Appearances
For
the
Defendant/Excipient
:
Adv.
A.E. Ayayee
Instructed
by:
Moroka
Attorneys, Bloemfontein
For
the
Plaintiff/ Respondent
:
Adv.
A.P.J. Els SC
Instructed
by:
Albert
Hibbert Attorneys Inc, Pretoria
c/o
Webbers Attorneys Inc, Bloemfontein
[1]
1
All SA 648
at para 36
[2]
2006
(1) SA 461
(SCA) at 465