Man Financial Services (SA) (Pty) Ltd v Kampala Bus Lines CC and Others (3525/2007) [2008] ZAKZHC 62 (29 August 2008)

IN THE HIGH COURT OF SOUTH AFRICA

DURBAN AND COAST LOCAL DIVISION

3525/2007

MAN FINANCIAL SERVICES (SA) (PTY) LTD PLAINTIFF

versus

KAMPALA BUS LINES CC FIRST DEFENDANT

CHANDAR HARILAL SECOND DEFENDANT

RAJ HARILAL THIRD DEFENDANT

RESERVED JUDGMENT

Delivered on: 29 August 2008

NTSHANGASE, J

[1] This is an application for summary judgment against the three defendants jointly and severally. The plaintiff’s claim is for payment of the sum of R268 837.32, together with interest thereon at the rate of 11.649% per annum calculated from 14 February 2007 to date of payment, and costs of suit. The second and third defendants are cited as sureties and co-principal debtors in solidum with the first defendant in terms of an unlimited Deed of Suretyship. The cause of action is founded on a credit agreement in terms whereof the plaintiff sold to the first defendant a bus described as “2003 MAN 24.350 HOCLN CHASSIS WITH A MARCOPOLO BODY”.

[2] The application for summary judgment is opposed by the first defendant. At the outset of proceedings Mr Haasbroek who appeared for the defendant indicated that no relief is sought against the second and third defendants; therefore they abide the decision of the court. Reference to the ‘defendant’’ shall hereafter be to the first defendant. Mr Haasbroek confirmed that the defendant’s approach would be to raise technical objections against the plaintiff’s summons and to proceed on those technical objections only and conceded that no defence is made out in the affidavit filed on behalf of the defendant. The defendant’s heads of argument raised two points which bear reference to clauses 11.1.1 and 11.1.2 of the agreement, not canvassed in the opposing affidavit. They are dealt with now.

[3] It was contended that the plaintiff’s claim is flawed insofar as it seeks specific performance which it cannot do after it had cancelled the agreement. Mr Boulle, for the plaintiff argued that this misconceives plaintiff’s claim and he referred also to defendant’s heads of argument which purport to quote the plaintiff’s particulars of claim in what incorrectly reads:

“…entitled to immediate payment of the outstanding balance owing … .”

What is pleaded reads:

“… entitled to claim immediate payment of the outstanding balance mentioned hereinafter …”

as what apparently accounts for the misunderstanding of the nature of the plaintiff’s claim. Expounding on the correct meaning of the particulars of claim Mr Boulle submitted that the present position is that the contract is cancelled. What is indicated is what the defendant would have owed had it performed, but taking into account the value of the bus sold by the plaintiff what is claimed is what is owed.

[4] The plaintiff is not enforcing the defendant’s primary obligation in the contract. The plaintiff, having taken back the bus is, in this matter, not claiming the full balance owed. It has acted in terms of clause 11.1.2 which empowers it to –

“terminate (the) agreement summarily, to immediately take possession of the goods and to retain all payment already made by or on behalf of the lessee in terms of (the) agreement and to claim damages.”

The claim is clearly not one for specific performance as contended on behalf of the defendant. Contentions to the contrary must accordingly fail.

[5] The second issue canvassed in paragraphs 9 and 10 of the defendant’s heads of argument relates to clause 11.4 which provides that –

“The lessee agrees that the lessor shall have the right to obtain an attachment order in any court with competent jurisdiction, placing the goods and documents aforesaid into the custody of the lessor, pending the conclusion of any action instituted or to be instituted against the lessee for damages, which shall be in addition and without prejudice to any other rights to which the lessor may be entitled in law to obtain an order for attachment of the goods and an interdict against the lessee, and not in substitution thereof.”

In paragraph 10 of its heads of argument the defendant submits that the plaintiff was not entitled to sell the bus pending finalisation of the damages claim without prior permission obtained from the defendant. I do not find it necessary to dwell on contentions as premised on clause 11.4 as such contentions have no bearing on a bona fide defence required to be set out by the defendant in a summary judgment application.

[6] There is a further contention on behalf of the defendant that the claim is not for a liquidated amount and must for that reason not succeed. On the authority of the S.A. Fire and Accident Insurance Co. Ltd. v Hickman.1 Mr Haasbroek submitted that a claim for damages cannot be a claim for a liquidated amount in money. Coupled with this contention Mr Haasbroek pointed to the fact that the court in this matter is dealing with a claim that needs to be determined by way of valuations. This refers to the valuation of the bus in which R1,million was arrived at as the value. It was subsequently sold for R1,5million. It was contended that the bus would have been sold “for far in excess of the amount owing by the first defendant to the plaintiff at the time.” In the cited case the plaintiff had applied for default judgment on a summons in which, coupled with other claims, there was one for “payment of whatever amount should be found due…”, which amount the court found would only emerge after debate of the account had been concluded. As was stated by Howard J, as he then was, in Leymac Distributors Ltd. v Hoosen and Another2, a claim to be regarded as one for a liquidated “amount in money” must be based on an obligation to pay an agreed sum of money or to be so expressed that the ascertainment of the amount is a mere matter of calculation.

[7] I deal first with the claim as being one for damages. I do not think in the circumstances of this case that the mere label of the claim as one for damages constitutes it as an unliquidated claim. This finds support in the case of Probert v Baker3 in which Nienaber J stated:

“Whichever test is applied, the present claim, despite being one for damages, is a claim for a liquidated amount.”

The court found the amount of the claim to be capable of prompt and ready ascertainment and of speedy and easy proof without need to enquire into any facts or to exercise independent judgment on any aspect such as reasonableness of the amount.

[8] On the issue of the valuation of the bus, it appears to me that the plaintiff does not hinge its case on the valuation, but on the amount for which the bus was sold. The loss is fixed and a trial court would do nothing more to alter that position. However if the valuation were to be considered as a factor for purposes of assessment of the damages as a safeguard against a reckless sale in which the bus would be sold for a pittance, I would in the matter, find no reason for holding that the value of the bus arrived at by what appears to me to have been a proper valuation by “Johan Strydom Valuations”, was not fair and reasonable. The fact that some person was prepared to pay more than its fair and reasonable value does not detract from the fairness and reasonableness of such determined value. It only operates to the benefit of both the creditor and the debtor.

I am of the view that in the present matter the amount is capable of prompt and ready ascertainment and that the ascertainment of the amount is a mere matter of calculation.

[9] As conceded by the defendant, no defence at all is set out in the opposing affidavit. The case proceeded on technical objections only. I find such objections to be without merit and contentions on behalf of the defendant premised thereon must fail.

[10] I accordingly make the following order:

Summary judgment is entered for the plaintiff in the sum of R238 837.32, interest on that sum at the rate of 11.649% from 14 February 2007 to date of payment and costs of the application.

Date of Hearing: 21 May 2008

Date of Judgment: 29 August 2008

Counsel for the plaintiff: Adv AJ Boulle

Instructed by: Uys, Matyeka Attorneys

c/o Schwartz & Associates

Counsel for the first defendant: Adv P Haasbroek

Instructed by: Singh and Singh Attorneys

1 1955(2) SA 131(N)

2 1974(4) SA 525 (D) at 527G

3 1983(3) SA 229 AT 236H