Dangote Cement South Africa (Pty) Ltd t/a Sephaku Cement v Jozini Quick Build Hardware CC t/a Quick Build It (D12649/2018) [2020] ZAKZDHC 29 (27 July 2020)

IN THE HIGH COURT OF SOUTH AFRICA

KWAZULU-NATAL LOCAL DIVISION, DURBAN

CASE NO: D12649/2018

In the matter between:

DANGOTE CEMENT SOUTH AFRICA (PTY) LTD

Plaintiff

t/a SEPHAKU CEMENT

and

JOZINI QUICK BUILD HARDWARE CC

Defendant

t/a QUICK BUILD IT

ORDER

It is ordered:

Judgment is granted against the defendant for:

[1] Payment in the sum of R564 888.24.

[2] Interest on the amount at the rate of 10, 25 % per annum, a tempora morae until date of payment.

[3] Costs of suit.

JUDGMENT

Henriques J

Introduction

[1] This is an opposed application for summary judgment. The parties have consented to the matter being determined on the papers without the hearing of oral argument.

The Claim

[2] The plaintiff instituted action in which it claims payment of an amount of R564 888.24 from the defendant for cement supplied to the defendant on the basis of a written agreement. In its particulars of claim, the plaintiff pleads that such written agreement was concluded on 30 January 2014 at Pinetown between Pieter Fourie representing the Spar Group Ltd (Spar) and R A Hester acting

on behalf of Build It, a division of Spar.

[3] The material express, alternatively, implied or tacit terms of the agreement were the following:

3.1 Spar required a facility to be granted to it for the purchase of cement and associated goods from the plaintiff for and/on behalf of Build It outlets, which outlets were referred to as resellers and the defendant was one such reseller.

3.2 The plaintiff agreed to supply cement to the resellers,[1] through the agency of Build It at specific prices.[2]

3.3 The plaintiff agreed to supply and invoice the cement to each reseller, including the defendant against a duly signed and authorised order from each individual reseller.[3]

3.4 Despite Spar guaranteeing payment to the plaintiff for the invoiced value of all cement supplied to the resellers, including the defendant, the plaintiff had the right to recover any amount payable by any such reseller from such reseller.[4]

3.5 In the event of a reseller being deleted from Spar's list of authorised resellers, and the plaintiff electing to continue to supply the deleted reseller with cement, then the onus was on the plaintiff to recover any monies owing by that deleted reseller.[5]

3.6 Spar warranted that it was duly authorised by each of the resellers, including the defendant to:

3.6.1 apply for credit facilities with the plaintiff on the reseller's behalf; and

3.6.2 bind the reseller to the provisions of the agreement.[6]

[4] The plaintiff complied with its obligations and supplied the defendant with various quantities of cement. Pursuant to various orders for such cement from the defendant and over the period, December 2017 to February 2018, the plaintiff rendered invoices and delivery notes in respect of the supply of cement to the defendant, in the sum of R564 888.24.

The Defence

[5] The following defences are raised in opposition to summary judgment. There are contained in an answering affidavit and the plea. The material terms of the agreement as pleaded, and referred to in paragraph 3 above are not in dispute. In addition, it is not disputed that the amount is owed. In answer to the allegations, the defendant submits that there are triable issues warranting the refusal of summary judgment in terms of Uniform rule 32. These are the following:

5.1 The failure by the plaintiff to bring a substantive application for condonation arising from its failure to attach all the annexures to the written agreement to the particulars of claim in compliance with rule 18(6);

5.2 The plaintiff's failure to join Spar to the action as Spar guaranteed payment to the plaintiff;

5.3 It has discharged its obligations by paying Spar who has confirmed payment in full on 21 May 2019 and consequently, Spar having guaranteed payment to the plaintiff, is liable for such debt.

Rule 32

[6] This application was instituted prior to the amendment of rule 32 which occurred on 1 July 2019. The rule does not apply retrospectively.[7] Thus the provisions of the old Uniform rule 32 applies. Consequently, the defendant must satisfy the court by affidavit that he has a bona fide defence to the action and must disclose fully the nature and grounds of the defence and the material facts relied on therefor.

[7] In Joob Joob Investments (Pty) Ltd v Stocks Mavundla Zek Joint Venture ,[8] the Supreme Court of Appeal endorsed the approach to summary judgment as set out by Corbett JA in Maharaj v Barclays National Bank Ltd[9] and was of the view that the time had come to disregard labels which termed summary judgment proceedings as being 'extraordinary' and 'drastic.'

[8] The proper application of the rule was set out by Corbett JA in Maharaj, who in summary held that a court at summary judgment "does not attempt to decide the issues or determine whether or not there is a balance of probabilities in favour of the one party or the other. All that a court enquires into is whether the defendant has fully disclosed the nature and grounds of his defence and the material facts upon which they are founded and 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."

[9] Once a court is satisfied on these matters, a court must then refuse summary judgment, either wholly or in part. Navsa JA in Joob Joob also warned against requiring a defendant to file an affidavit bearing 'the precision apposite to pleadings.' In addition, he also remarked that summary judgment was also there to ensure that 'recalcitrant debtors pay what is due to their creditors'.

[10] I now turn to consider whether the defendant has disclosed the true nature and grounds of its defence and whether on such facts so disclosed, it has a defence which is bona fide and good in law.

Analysis

[11] A copy of the written agreement, 'POC1' to the particulars of claim omits annexures 'A', 'B' and 'C' referred to in Clauses 1, 2.1 and 2.2 of the agreement. The plaintiff indicates that it is unable to annex a copy of these annexures as the original annexures have been misplaced and despite a diligent and proper search therefore, cannot be located.

[12] It submits that there can be no prejudice to the defendant by its failure to attach the annexures to the agreement. This is as the conclusion of the agreement has not been disputed and the material terms of the agreement which it relies on for its cause of action, appear from annexure 'POC1'. This annexure is attached to the particulars of claim and which agreement it submits, clearly and concisely sets out the cause of action with sufficient particularity to enable the defendant to plead.

[13] Annexure 'A' refers to the list of resellers of the Build It outlets. The defendant submits that annexure 'A' is crucial to the agreement in that Clause 3.3 of the written agreement makes provision for Spar to provide the plaintiff with an updated list of resellers in order to ensure that it is aware of which resellers remain on the list and which resellers have been deleted from the list. This is relevant as the resellers deleted from the annexure 'A' would not have payment guaranteed by Spar.

[14] The defendant submits that oral evidence is necessary to demonstrate that the defendant was never deleted from the list of resellers and thus payment was guaranteed by Spar, who is not a party to the proceedings.

[15] Clause 3.3 of the written agreement reads as follows:

'Spar shall notify Sephaku in good time of all additions to and deletions from the list of resellers which Sephaku is authorised to supply in terms of this agreement, and a failure on the part of Spar to so notify Sephaku of any deletions shall result in Spar being liable in any event for the payment of all cement supplied to the Reseller concerned. Should Sephaku elect to supply the deleted Reseller concerned, after having being notified of the deletion by Spar, then Spar will not be obliged to guarantee the payment in respect of that deleted Reseller and the onus will be on Sephaku to recover any monies owing by that deleted Reseller. In order to give effect to such additions or deletions, the parties shall as and when such deletions and additions occur, prepare a fresh annexure A, duly initialled by both parties, which shall be substituted for the then existing annexure.'

[16] In my view, the failure by the plaintiff to annex annexure 'A' which contains the list of resellers does not cause any prejudice to the defendant, nor does it constitute a triable issue warranting the refusal of summary judgment. The plaintiff has not pleaded that the defendant was deleted from the list of resellers, nor has it indicated t at payment was not guaranteed by Spar. In addition the defendant has admitted it is a reseller.

[17] The defendant relies on Clause 3.1 to allege that the plaintiff has provided an inaccurate rendition of the clause relied on when alleging that the plaintiff is not entitled to claim from the defendant, but from Spar. Clause 3.1 of the agreement reads as follows:

'Spar guarantees payment to Sephaku in its personal capacity, the invoiced value (less any settlements amounts as contemplated in paragraph 2.6) of all cement supplied to the Resellers during the course of a particular calendar month by no later than the 25th day of the calendar month (or if the 25th of that month is a weekend or public holiday, then the last business day prior to the 25th) following the month of delivery and accepts that Sephaku shall have the right to recover any amount payable by any such Reseller from such Reseller and/or from Spar, jointly and severally. Payment shall be made by Spar as aforesaid provided that Sephaku shall have delivered to the appropriate Distribution Centre, the applicable invoices before the monthly cut off date, applicable to such Distribution Centre, which monthly cut off date will be notified to Sephaku in writing.’

[18] The plaintiff has annexed to the particulars of claim, copies of all invoices and delivery notes in respect of the cement delivered in the amount claimed. This has not been disputed by the defendant. The defendant has not disputed that monies are owed to the plaintiff. In essence, what the defendant submits is that, because Spar guaranteed payment, it ought to have been joined in the action and because payment was guaranteed by Spar, it is liable for payment and not the defendant. The defendant submits payment was due from Spar and the defendant, jointly and severally.

[19] The plaintiff submits that the defendant has misinterpreted the provisions of Clause 3.1. and that it is entitled to choose whether to recover the amount payable by the defendant, from either the defendant or Spar. The approach to be followed when interpreting clauses in a contract has been settled by the decision of the Supreme Court of Appeal in Natal Joint Municipal Pension Fund v Endumeni Municipality.[10] When interpreting clauses in contract they must be given a 'sensible or business like' meaning.

[20] I agree with the submissions of the plaintiff that the use of the words 'and/or' in clause in 3.1 of the agreement, entitles the plaintiff to choose whether it wants to recover the amount due by the defendant from either the defendant or Spar. The provisions of clause 3.1 clearly provide this as it reads:

'. .. 'Sephaku shall have the right to recover any amount payable by any such Reseller from such Reseller and/or from Spar, jointly and severally.' (my underlining).

This allows the plaintiff to elect whether to proceed against the defendant as reseller alternatively, against Spar and the reseller.

[21] In addition, the defendant submits that it was never deleted from the list of resellers as provided for in Clause 3.3 and consequently, the plaintiff may not sue it. I agree with the submission of Mr Blumenthal that this is not what Clause 3.3 contemplates as the plaintiff relies on Clause 3.1, in the main, for its claim for payment of the amount invoiced to the defendant.

[22] In any event, having regard to the particulars of claim, the plaintiff has not made any averment that the defendant was deleted from annexure 'A' which would affect Spar's guarantee of payment by Build It. It is in fact the defendant who raises this. Be that as it may, the plaintiff relies on Clause 3.1 and has elected to sue the defendant and not Spar, which Clause 3.1 entitles it to do.

[23] A further defence raised by the defendant is that it has settled its indebtedness to Spar in full and it attaches annexure 'A' to its particulars of claim which is a letter from Build It dated 21 May 2019 relating to the termination of its membership of the defendant. This confirms that the defendant had settled its indebtedness to the Spar Group.

[24] This must be read together with annexure 'A' to its plea, which is an application for credit facilities. This in no way relates to the defendant's indebtedness to the plaintiff and does not in any way, in my view, deal with the defendant's alleged indebtedness to the plaintiff for cement supplied. I agree with the submission of Mr . Blumenthal that this is an 'unrelated and unexplained application for credit facilities which takes the defendant's case no further'.

[25] I am of the view that the defendant has not established a bona fide defence good in law to the plaintiff's claim. There are no triable issues warranting a refusal .of summary judgment.

Costs

[26] There is no reason to depart from the usual rule in relation to costs and the plaintiff is entitled to its costs including those occasioned by the opposed summary judgment application.

Conclusion

[27] In the result, the following order is issued. Judgment is granted against the defendant for:

27.1 Payment in the sum of R564 888.24.

27.2 Interest on the amount at the rate of 10, 25 % per annum, a tempora morae until date of payment.

27.3 Costs of suit.

Case Information

Date of Opposed Motion

: 23 June 2020

Date of Judgment

: 27 July 2020

Appearances

Counsel for the Plaintiff

: R Blumenthal

: Email: blumenthal@law.co.za

Instructed by

: Schultz Mmuoe Incorporated

c/o MacGregor Erasmus Attorneys

Bond Square

1st Floor

Browns Road, The Point

DURBAN

Email: Pam@meattorneys.co.za

Tel: 031 - 201 8955

Counsel for the Defendant : T Kadungure

Email: tendayi@law.co.za

Instructed by

: B M Thusini Inc.

134 Mark Street

VRYHEID

Email: thusini@thusinilaw.co.za

Tel: 034 - 980 9482

Ref: Mondli Thusini

This judgment was handed down electronically by circulation to the parties' representatives by email, and released to SAFLII. The date and time for hand down is deemed to be 09h30 on 27 July 2020.

[1] Clause 1.

[2] Clauses 2.1 and 2.2.

[3] Clause 2.4.

[4] Clause 3.1.

[5] Clause 3.3.

[6] Clause 4.4.

[7] Raumix Aggregates (Pty) Ltd v Richter Sand CC & another, and similar matters 2020 (1) SA 623 (GJ) paras 7-17, a full court decision of the Gauteng Local Division, Johannesburg .

[8] Joob Joob Investments (Pty) Ltd v Stocks Mavundla Zek Joint Venture 2009 (5) SA 1 (SCA) at 11G- 12D

[9] Maharaj v Barclays National Bank Ltd 1976 (1) SA 418 (A) at 425G-426E.

[10] Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA) paras 18-23.