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IN THE HIGH COURT OF SOUTH AFRICA

(GAUTENG DIVISION, PRETORIA)

REPUBLIC OF SOUTH AFRICA

Case Number: 56374/2013

Reportable: No

Of interest to other judges: No

In  the matter between:

MINISTER  OF TRADE AND INDUSTRY                             First Plaintiff/ First Respondent

THE MANUFACTURING  DEVELOPMENT BOARD Second Plaintiff/ Second Respondent

And

B COOL PRODUKTE CC                                                                      Defendant/Excipient

JUDGMENT

JANSE VAN NIEUWENHUIZEN J

[1] This is an exception noted by the defendant against the first and second plaintiffs' particulars of claim on the basis that the particulars are vague and embarrassing to such an extent that the defendant is prejudiced thereby.

PARTICULARS OF CLAIM

[2] The subject matter of the plaintiffs' claim is the implementation of a Small  Medium Enterprise Development Program (the Program) which allegedly resulted in the conclusion of a written contract between the second plaintiff and the defendant. The Program provides for the awarding of incentives to certain enterprises. It is alleged that the defendant utilized the program and that the defendant received incentives from the second plaintiff in the amount of R 1 440 899, 00.

[3] According to the allegations in the particulars of claim the defendant was, for various reasons, not entitled to the amount paid and consequently the plaintiffs seeks an order for the repayment of the amount.

[4] The averments underlying the conclusion of the contract, reads as follows:

" 5.

5.1         On 13 December 2004, Lionel J Meyer ("the consultant") applied for an incentive on behalf of J Basson trading as B Cool Produkte and claimed the incentives in terms of the SMEDP.

5.2         The incentive claimed for was a “new manufacturing project” with reference SMEDP- NEW - 7198.

5.3        DTI acknowledged receipt of the application on 22 December 2004. Attached as Annexure “1” is a copy of the aforesaid application.

6.

The defendant was incorporated and established on 26 September 2002 and on October 2005 the application for the incentives in terms of the SMEDP was approved by the second plaintiff on subject to the special conditions set out in the contract referred to below.

7.

On or about 8 November 2007 at Pretoria, the DTI and the defendant entered into a written contract (the "contract") together with an addendum thereto. The DTI was represented by Simon Rabekane and the defendant was represented by Jan Basson. A true copy of the contract is attached hereto as Annexure "2".

8.

Clause G of the contract (Annexure ''2") provided that the complete agreement between the parties constituted the following:

“8.1     the application and supporting documents;

8.2      the claim form and supporting documents;

8.3      the contract and addendum thereto;

8.4      the SMEDP Manufacturing Terms and Conditions Brochure ("the Brochure"), attached hereto as Annexure “3”. “

EXCEPTION

[5] The defendant relied, inter alia, on the following grounds in support of the exception:

“ 1.

The defendant is cited as B Cool Produkte CC, a close corporation duly established and registered in terms of the laws of South Africa.

2.

Ex facie paragraph 5 of the particulars of claim read with annexure 1 appended thereto an individual i.e J Basson trading as B Cool Produkte applied for incentives and claimed the incentives in terms of the SMEDP.

3 .

Ex facie the particulars of claim read with annexure 1 appended thereto the aforementioned individual as opposed to the Defendant applied for an (sic) incentives and claimed the incentives in terms of SMEDP.

4.

In paragraph 6 of the particulars of claim it is alleged that the Second Plaintiff approved the application for the incentives (i.e. the application made by the aforementioned individual) subject to the special conditions set out in the contract referred to in paragraph 7 of the particulars of claim, i.e. a contract entered into by Defendant as opposed to the aforementioned individual.

5.

In paragraph 8 of the particulars of claim it is alleged that the complete agreement consists of inter alia the application and supporting documents i.e. the application made by the aforementioned individual who is not a party to the litigation under the abovementioned case number and the contract entered into by Defendant.

6.

Plaintiffs' particulars of claim are vague and embarrassing to the extent that Defendant is prejudiced thereby inter alia because:

6.1                Plaintiff apparently relies upon an application made by an individual,

i.e. J Basson trading as 8 Cook Produkte whilst the mentioned individual is not a party to the litigation under the above mentioned case number.

6.2                Plaintiff apparently relies upon the aforementioned application being part of a contract entered into with the defendant "

[6] In its notice in terms of rule 23(1) of the Uniform rules of court, the defendant relied on further grounds in support of the exception. Mr Heyns, counsel for the defendant, to his credit, did not persist with these grounds during argument.

[7] Ex facie the allegations in the particulars  of claim, the  offended allegations  do appear to be vague and embarrassing.

[8] The allegations are, however, premised on the documents attached to the particulars of claim.

ANNEXURES

[9] Ms Kooverjie SC, counsel for the plaintiffs, referred to several portions of the annexures attached to the particulars of claim in support of her submission that the exception should not be upheld.

[10] Ms Kooverjie SC's submission is in accordance with prevailing case law. In Telematrix (Pty) Ltd v Advertising Standards Authority SA 2006 (1) SA 461 SCA, Harms JA held as follows at para [10];

"Counsel for the plaintiff strenuously objected to our having regard to the totality of the pleadings and wished to confine the Court to a consideration of the facts alleged in the body of the particulars of claim in isolation. His objection is ill-founded Pleadings must be read as a whole and in deciding an exception a court is not playing games, blindfolding  itself. ...."

[11] An analysis of the annexures to the particulars of claim is therefore not only instructive but compulsory.

[12] Annexure "1", being the application for the SMEDP, is somewhat   ambiguous.

On page 1 the applicant appears to be "J Sasson t/a B Cool Produkte a clear indication that the application is made by a sole proprietor.

[13] Paragraph 3 provides for "Legal Entity Information' Adjacent to the Incorporation number and Income Tax number, the abbreviation TBA, in other words to be advised, appears.

[14] Paragraph 6 refers to shareholding and reflects that J Sasson holds 100% of the shares in an entity, which entity is not mentioned in the paragraph.

[15] The document concludes with a declaration, which was signed by J Basson in his capacity as "member':

[16] A resolution by the directors of J Basson t/a S Cool Produkte is attached to the application. In terms of the resolution, J Basson in his capacity as ''member", is authorised to sign all documents pertaining to the application.

[17] Similarly, and in a document titled "Authorisation to Act as  Consultant  the  Board of Directors of J  Basson  t/a  B  Cool  Produkte  appointed  Bubez Business Development as consultant to act “on our behalf  with  regard  to issues pertaining our participation in the SMEDP. “

[18] The application was signed on 27 November 2004.

[19] In a letter that accompanied the application, the following appears from Explanatory Notes attached thereto:

"2.     As  the  registration  of  the  close  corporation  has  not yet been completed, an income tax number is not yet available. This will  be provided once it is available. "

[20] Annexure 2, being the contract relied upon by the plaintiffs, is accompanied  by  a  letter  addressed  to  «The Manager,  B Cool Produkte CC   The letter embodies a written amendment to the contract and the relevant portion reads as follows:

"Please find enclosed the amended page(s) of the contract Amendment done on the contract: Name"

[21] All further correspondence and claims in respect of the SMEDP  emanates  from the defendant.

[22] The patent ambiguity  in annexure “1” arises from the fact that J Basson on   the one hand stated that the application is made on behalf of J Basson t/a S Cool Produkte and on the other hand stated that he is the sole member of an entity known as S Cool Produkte. Simply put, it is not clear whether J Basson applied in his personal capacity or on behalf of a distinct legal entity.

LEGAL POSITION

[23] The allegations in the particulars of claim emanate from a contract that is patently ambiguous.

[24] Once it is established that there is a patent ambiguity in a contract, it is admissible for a party to the contract to lead extrinsic evidence to clear up the ambiguity. [See: Sacks v Venter1954 (2) SA 427 WLD at 430 H -431A.]

[25] Evidence in respect of the ambiguity can only be lead at  trial and for this  reason our courts are reluctant to uphold exceptions based on an ambiguity  in a contract. In Cairns (Pty) Ltd v Playdon & Co Ltd 1948 (3) SA 99 AD held as follows at 106:

"Now if this issue of interpretation had been raised in the exception before the Provincial Division, in my opinion the Court would have been justified, having regard to the obscurity of the document and the difficulty of interpreting it standing alone, in declining to decide the question on exception and in directing that it should stand over for decision at the trial. Indeed, in my opinion that would, in the circumstances, have been the correct course to adopt. "

and at 107:

"However, in the view I take of the matter, it is at this stage desirable to refrain from expressing an opinion, whether definite or provisional, on the correct interpretation of the document as it stands,· for this is a case where evidence of the surrounding circumstances may assist such interpretation."

CONCLUSION

[26] In the premises, the exception stands to be dismissed.

COSTS

[27] Mr Heyns submitted that the exception was based on good grounds and that the defendant should not, even if the exception did not succeed, be mulcted with costs.

[28] In my view, the aforesaid submission does not justify a departure from the normal rule that a successful party is entitled to its costs.

ORDER

[29] In the premises, I grant the following order: The exception is dismissed with costs.

_______________________________

N JANSE VAN NIEUWENHUIZEN J

JUD E OF THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

APPEARANCES

Counsel for the Plaintiffs/Respondents.                         Advocate H Kooverjie SC

                                                                                                 (082 496 3105)

Instructed by:                                                                 Rudman Attorneys

                                                                                                 Ref: No: PRTR/wf/S7/422

                                                                                                 (012 751 4613)

Counsel for the Defendant/Excipient:                            Advocate GF Heyns

                                                                                                 (012 942 2202/082 802 7838)

Instructed by:                                                                 Seymore Du Toit & Sasson Attorneys c/o Day Incorporated

                                                                                                 Ref: No: Mr day/MD3578

                                                                                                 (012 362 3280)

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