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THE REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

(1)    REPORTABLE: NO

(2)    OF INTEREST TO OTHER JUDGES: NO

(3)    REVISED.

 

                                         Case no: 11096/20

In the matter between:

BRAGAN CHEMICALS PTY LTD                                              APPLICANT/PLAINTIFF

V

DEVLAND CASH AND CARRY PTY LTD +1                  RESPONDENTS/DEFENDANTS

 

SUMMARY JUDGMENT: REASONS FOR ORDER DATED 29 JULY 2020

 

AC BASSON, J

 

1.            This was an application for summary judgment wherein the plaintiff/applicant seeks judgment against the defendant/respondent for outstanding payment in the amount of R1 509 844.08 and interest on the amount of R1 316 651.55 per annum as from 1 February 2020 to date of payment.

 

2.            The first defendant is indebted to the plaintiff in terms of an account facility for the aforementioned amounts as confirmed by a certificate of balance attached to the papers.

 

3.            The second defendant is indebted to the plaintiff in terms of a deed of suretyship executed in favour of the plaintiff in terms whereof the second defendant bound himself as surety and co-principle debtor for the obligations of the first defendant. It is common cause that the second defendant bound himself as surety. These points of law have not been denied in the defendants’ plea and is deemed to be admitted in terms of Uniform Rule 22(2).

 

4.            In the affidavit in support of summary judgment the court’s attention was specifically drawn to paragraph 18 of the particulars of claim wherein it is stated that the defendants failed to make payment despite a letter from the defendants’ attorneys, wherein a proposal was made for the repayment of the outstanding amounts. In terms of this proposal, the defendants proposed to make an upfront payment of R400,000.00 with the remaining capital outstanding to be paid in six equal instalments of R152 775.26. This correspondence was not sent without prejudice and is thus admissible as an admission of liability for the amount claimed.

 

5.            The defendants filed a plea to the particulars of claim on 12 May 2020. The conclusion of the credit agreement is admitted.

 

6.            What is glaringly absent from the plea is any version in relation to a possible defence.

 

7.            I am in agreement with the plaintiff that, in light of the fact that the defendants have raised no defence, it would be irregular to raise a new defence in an affidavit resisting summary judgment. This is however exactly what the defendants did.

 

8.            In the affidavit resisting summary judgment, the defendants now rely on the fact that the goods received were defective in one or more of the following: the goods were not packed properly and were leaking, there was a bad odour emanating from the oil and that the goods were destroyed in order to comply with strict hygienic standards and could not be utilised for its intended purpose.

 

9.            There is no proper explanation before the court why these defences only came to light at this very late stage. At the very least, one would have expected when the letter dated 3 December 2019 proposing the repayment of the amounts owed, would have mentioned these alleged defects to the products that were delivered to the defendants.

 

10.         In paragraph 11 of the particulars of claim it is specifically stated that “Plaintiff duly complied with all its obligations and delivered goods to the First Defendant, alternatively to the address of the beneficiary, at the special instance and request of the First Defendant and/or of the beneficiary.” To this allegation, the defendants in the plea merely denied the contents of this paragraph “as though specifically traversed and the Plaintiff is put to the proof thereof.” The defendants are bound by this bare denial and the fact that they have failed to provide this court with a version in relation to a possible defence. It is also instructive to point out that no documentation is attached to the papers supporting the fact that the products that have been delivered were defective. There is also no allegation, even in the affidavit resisting summary judgment, that the defective products were brought to the attention of the plaintiff. Furthermore, in terms of clause 20 of the account facility it is specifically stated that the liability of the plaintiff “in respect to any claim due to receipt of any defective goods is limited to replacing the goods upon receipt of the defective goods”. 

 

11.         The defendants do not explain in their affidavit why these defects have not been brought to the attention of the plaintiff. They also do not explain where it had come to their attention that the goods were defective. This is particularly concerning in light of the particularity in which the defendants now allege that the goods were defective. It is also alleged in their affidavit that the goods were destroyed “in order to comply with strict hygienic standards and could not be utilised for its intended purpose”. The defendants also do not tell the court when the goods were destroyed nor why the plaintiff at that stage, was not informed of this fact. In these circumstances there clearly existed an obligation on the defendants to raise a defence in their plea.

 

[1]          The Rules provide for a mechanism in the form of a summary judgment procedure to enable a plaintiff to obtain judgment against a defendant without the necessity of going to trial. Prior to the amendment of the Rules, it was required that a defendant files an opposing affidavit to disclose fully the nature and grounds of the defense and the material facts relied upon therefor. In order to prevent summary judgment, a defendant will have to set out sufficient facts that demonstrates that he has a bona fide defense to the action. Such affidavit shall fully disclose the nature and the grounds of the defense and the material facts relied upon therefor.

12.         Rule 32 has been amended with effect from 1 July 2019 and now requires that summary judgments may only be applied for once a defendant's plea has been delivered:

 

“(1) 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.”

 

13.         The court in Firstrand Bank Ltd v Shabangu and others[1] analysed in some detail the rationale for the new process. I have taken the liberty to quote at length from this judgment:

 

“[16] The plaintiff will retain its right to pursue an expedited procedure for summary judgment — but must only wait until it can know what it is that it is declaring indefensible. At most there may be wasted costs — but this cannot amount to a substantive impairment of rights — just as it is not regarded as giving rise to real prejudice in other contexts.

[17] It may also be — and perhaps will almost invariably be — that because the plaintiff will have to wait for the defendant's plea, it will be placed in a far superior position than it was under the unamended rule — where it had to effectively guess what the defence will be. As the Rules Board suggests:

'The summary judgment debate will thus hopefully be a more informed, and less artificial, one, and engage with the real issues in the matter.' 

[18] The effect can only be that an informed decision whether to launch such proceedings will now be possible, and if launched, may be focused and permit for the 'summary' disposal of the matter. This can only be in everyone's interests.

Intention of the legislature — as informed by the Rules Board's reasons

[19] Even if this conclusion was not as clear as it appears to be from the Act and the common law, the concerns of the Rules Committee, which led to the amendments, are unassailable. They reflect an appreciation that the hearing of a rule 32 application on the section, as it was, posed substantial prejudice to all parties. If there was any doubt as to whether the Rules Board and, in turn, the legislature in response, intended these amendments to be immediately binding, one need only take account of the reasons underlying the amendments — repeated here at length due to their importance: 

(a)   A plaintiff at present does not have to indicate what exactly its cause of action is, or what facts it relies on, or why a defendant does not have a defence. Instead, the plaintiff is merely required (and permitted) to file a brief affidavit, taken from a template, 'verifying the cause of action' in the vaguest possible way, opining that the defendant has no bona fide defence, and stating that 'a notice of intention to defend has been delivered solely for the purpose of delay' (rule 32(2)). This formulaic affidavit is unsatisfactory in many respects.

(b)   The plaintiff, when deposing to its affidavit under the current rule, may well not be aware what defence the defendant is intending to advance.

(c)   The deponent to the affidavit (who could, for example, be an accounts manager in a bank) is also likely to have little idea as to why exactly the defendant is opposing: the defendant could, for example, believe (wrongly) that it has a viable defence, or that there is some impediment to the plaintiff succeeding, irrespective of the merits (eg prescription, jurisdiction or lack of standing), or that the equities are such that a court could well be minded not to grant judgment for the plaintiff.

(d)   The current founding affidavit in summary judgment proceedings therefore invariably involves speculation on the part of the plaintiff's deponent. The lack of specificity as to the plaintiff's claim, and the complete lack of detail as to why the defendant's envisaged defence is bogus, coupled with the absence of any replying affidavit, also means that the plaintiff can easily be frustrated by a defendant who is prepared to construct or contrive a defence, or rely on technical points.

(e)   The best way of addressing these shortcomings would seem to be to require the founding affidavit in support of summary judgment to be filed at a time when the defendant's defence to the action is apparent, by virtue of having been set out in a plea.[2] This course is better than allowing a replying affidavit to be filed (as was suggested by a report prepared a few decades ago by the Galgut Commission). Merely including provision for a replying affidavit would not address the problems with the formulaic nature of the founding affidavit, and the speculation inevitably contained therein.

(f)   In the event of a plaintiff applying for summary judgment after the delivery of a defendant's plea, the plaintiff would be able to explain briefly in its founding affidavit why the defences proffered by the defendant do not raise a triable issue; and should indeed be required to do so in order that the question of whether there is a bona fide defence which is capable of being sustained could be considered by the court in a meaningful way. Requiring the plaintiff to set out why, in its view, it has a valid claim and why the defendant's defence is unsustainable, would also remove the criticism that the defendant is being required to commit itself to a version when the plaintiff is not similarly burdened. Obliging the plaintiff to engage meaningfully with the case in its founding affidavit would moreover have the added benefit of reducing the temptation for a plaintiff to seek summary judgment as a tactical move (and as a way of forcing the defendant to commit to a version on oath, which can be subsequently used in cross-examination to discredit a witness of the defendant).

(g)   A stipulation that a plaintiff can only apply for summary judgment after delivery of a plea (rather than a notice of intention to defend) would also mean that the summary judgment application would be adjudicated on the basis of the defendant's pleaded defence and thus hopefully avoid a situation (such as not infrequently occurs under the current rule) where a defendant's version in its opposing summary judgment application diverges materially from its subsequently delivered plea. The summary judgment debate will thus hopefully be a more informed, and less artificial, one, and engage with the real issues in the matter.

(h)   Although foreign practice must be viewed with caution, given the differences between countries and their procedural systems, it is notable, too, that the other jurisdictions considered by the task team — the United Kingdom, Canada, Australia and the USA — all permit summary judgment only after a plea has been filed (and indeed after pleadings have closed). The summary judgment procedure was seemingly introduced in South Africa on the basis of its use in England and Scotland. The fact that summary judgment is only competent in those jurisdictions after at least a plea has been filed (and would thus be premature after merely a notice of intention to defend has been delivered) is thus reassuring, and indicative of the merits of the proposed change.”

 

14.         This judgment is instructive. It sets out the intention of the legislature to address the shortcomings of the position under the old rule bearing in mind that a plaintiff was required to bring a summary judgment application at a time when a possible defence to the claim has not yet been disclosed in a plea. The amended rule now requires an affidavit in support of summary judgment to be filed only once the defendant's defence to the action is apparent, by virtue of having been set out in a plea.

 

15.         The role of pleadings in litigation is well-know and need not be restated in detail. The object of pleadings is to define the issues upon which a court will be called upon to adjudicate and to enable the parties to prepare for trial on the issues as defined. A plea is the answer by a defendant to the claims made against it by the plaintiff and in which his defence is set out. Rule 22(2) of the Uniform Rules provides as follows:

 

“The defendant shall in his plea either admit or deny or confess and avoid all the material facts alleged in the combined summons or declaration or state which of the said facts are not admitted and to what extent, and shall clearly and concisely state all material facts upon which he relies.”

 

16.         An applicant for summary judgment is therefore entitled to rely on a plea in considering whether or not to launch an application for summary judgment. Where a defendant has failed to disclose a defence in its plea, a plaintiff would (in most instances) be entitled to the relief sought in its claim. I say this, however, with caution. I accept that there may be circumstances in which a defendant in summary judgment may well be able to raise a defence in the affidavit resisting summary judgment but which was not raised in the plea. However, this is not the case is the present matter. In the present circumstances the defences raised in the affidavit resisting summary judgment clearly were an afterthought for the reasons I have already alluded to. This is precisely what the drafters of the new rule have tried to avoid.

 

17.         The defendants have therefore failed to raise any defence to the action. Moreover, the plea does not raise any issue for trial. The application for summary judgement is therefore granted as per the draft order uploaded onto Caselines.

 

 

AC BASSON

JUDGE IN THE HIGH COURT

For the plaintiff/applicant

Adv HP Wessels

Instructed by VDT Attorneys Inc

 

For the defendant/defendant

Instructed by Soomar & Malic Inc

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