Momentum Group Ltd v Gquin Investec Bank Ltd and Others (50910/2009) [2015] ZAGPPHC 807 (7 October 2015)

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

CASE NO: 50910/2009

DATE: 7 OCTOBER 2015

In the matter between:

MOMENTUM GROUP LTD......................................................................................................Plaintiff

And

GQUIN INVESTEC BANK LTD..................................................................................First Defendant

VA BRIDGER..............................................................................................................Second Defendant

G DAVIES......................................................................................................................Third Defendant

QV BRIDGER.............................................................................................................Fourth Defendant

MG MARITZ..................................................................................................................Fifth Defendant

JUDGMENT

1. This is an application for leave to amend the plaintiff's particulars of claim by introducing a reference to a certificate of balance in paragraph 24 thereof and by annexing the certificate itself as annexure "Y" to the particulars of claim.

2. According to its particulars of claim the plaintiff claims payment from the defendants jointly and severally of the amount of R 8 564 089.38 together with interest and costs. Plaintiff relies for its claim against the first defendant on a written Franchise House Agreement ("the agreement") concluded on 7 December 2006. For its claim against the 2nd to 5th defendants the plaintiff relies upon deeds of suretyship signed by each of the defendants. The agreement and the deeds of suretyship are annexed to the particulars of claim. Plaintiff issued summons against the defendant on or about 20 August 2009.

3. The plaintiff extensively pleaded the provisions of the agreement and the deeds of suretyship relied upon including the provision in each thereof relating to the certificate of balance. Although worded differently, the clauses in the agreement and the deeds of suretyship determined that the certificate of balance appropriately signed would constitute phma facie proof of the amounts due to the plaintiff.

4. The plaintiff did not specifically refer to and attach the relevant certificate of balance in and to its particulars of claim. According to the plaintiff this was not necessary as a matter of pleading. During a pre-trial conference held between the parties the issue of the certificate of balance came up and the defendants indicated that since the plaintiff did not allege in its particulars of claim that it intended to rely upon the certificate of balance or failed to annex such a certificate to its particulars of claim, it would not be entitled at trial to rely upon such certificate of balance.

5. In order to avoid any argument in this regard in future the plaintiff decided, ex abundanti cautela, to amend its particulars of claim to this effect. The respondent opposed the application to amend and this court has to decide the issue.

6. The objection by the defendants commences with the statement that the plaintiff "did not rely on the provisions of clause 16.6 as part of its cause of action against the first defendant and now attempts, by way of an amendment more than 5 years after the issue of summons, to invoke the provisions of clause 16.6 and to rely on the certificate of balance referred to therein as part of its cause of action against the first defendant".

7. Secondly, the defendants rely upon a tacit or implied waiver of the plaintiffs right to rely upon the certificate of balance arising from the plaintiff's conduct. The conduct of the plaintiff relied upon appears to be the failure to rely on the certificate of balance for approximately five years since the issue of summons.

8. Thirdly, the defendants rely upon the alleged prejudice which the amendment would cause to the defendants. It was submitted on behalf of the defendants that the effect of the clauses relating to the certificate of balance is to cast an evidentiary burden on the defendants. Without it, or without reliance on these clauses, the plaintiff would have the duty to begin and to place sufficient evidence before the court to establish a prima facie case in order to avoid absolution. In other words, the plaintiff would have the duty to lead sufficient evidence to establish a case which requires an answer. The result of the amendment, if granted, would be that the defendants would be saddled with an evidentiary burden which was not the case previously. It was submitted that the

prejudice arises more specifically from the fact that the plaintiff waited more than five years before attempting the present amendment.

Without the amendment the plaintiff would have to prove its claims against the defendants on a balance of probabilities and in doing so the plaintiff will have to obtain and secure the necessary or requisite evidential material. If the amendment were to be allowed, the obligation would be on the defendants to obtain and secure the necessary evidential material to rebut the plaintiff’s claims against them.

9. A certificate of balance clause is designed to facilitate proof of the amount of liability. See Thrupp Investment Holdings Pty Ltd v Goldrick [2007] ZAGPHC 23; 2008 (2) SA 253 (W) at 256 A and the cases therein cited. As was stated by Van Oosten J in Thrupp M(t)he certificate therefore is merely an evidentiary tool provided for in an agreement by one contracting party to the other to facilitate proof of the amount of indebtedness. It does not in itself establish liability."

10. I respectfully agree with the aforesaid statement by Van Oosten J. Consequently I disagree with the first statement on behalf of the defendants. The plaintiff did not have to rely on the certificate clause as part of its cause of action against the defendants.

11. The alleged waiver of the plaintiffs right to rely upon the certificate arising from the plaintiffs conduct, is, properly construed, a possible defence to the plaintiffs reliance on the certificate or an objection to the admissibility of evidence based upon the alleged waiver. But it is not a ground upon which objection could be made as a matter of pleading. If the defence is valid, it must be an issue which the defendants would have to raise in their plea and they would have to prove same on the evidence presented at the trial. The admissibility of evidence cannot be determined in advance of the presentation thereof and it remains an issue to be determined by the trial court. The plaintiff thus cannot be prevented from pleading reliance on the certificate clause either

in initio or by way of later amendment. I may add, as an aside, that on the papers before this court it has, in any event, not been proven that the plaintiff had waived its right to rely upon the certificate of balance.

12. The third part of the objection relates to the issue of prejudice. The plaintiff's right to rely on a certificate of balance as an evidentiary tool, is a right it obtained right at the start of the contractual relationships when the agreements were signed. If reliance on the certificate causes prejudice to the defendants they can hardly complain. It was something they had agreed to.

13. But in any event, the defendants would always have been required to present evidence to rebut any evidence that the plaintiff presents which would establish a prima facie case. This is regardless of how the plaintiff eventually elects to prove its case, whether it be by way of a certificate of balance or on any other basis such as oral evidence and/or statements of account.

14. If the defendants are serious in their opposition to the plaintiffs claim, they must prepare their case on quantum regardless of how the plaintiff intends to prove its claim. Whether the plaintiff relies on a certificate of balance or on other evidence, the defendants have to prepare their case in a manner which would enable them to effectively cross-examine the plaintiffs witnesses and to present rebutting evidence to the court, if any. It would then be for the court to determine on all the evidence which had been presented by the respective parties, whether the plaintiff had proved its case on a balance of probabilities.

15. The defendants are assisted in their endeavours by the pre-trial procedures of, inter alia, discovery and further particulars, which are available to them. So, for example, the plaintiff is obliged to discover, and the defendants are entitled to receive, all the documentation necessary to prove the calculations by the plaintiff. That evidence should be available to the defendant.

16. The type of prejudice which would usually result in a court refusing an amendment, would be prejudice which cannot be cured by an appropriate order for costs and/or a postponement of the matter. If there is any prejudice for the defendants arising from the plaintiffs proposed amendment, it is clearly not of the type which would prevent the granting of the amendment.

17. In casu there can in any event not seriously be a suggestion of prejudice regarding the certificate of balance. The plaintiff pleaded the terms of the certificate clauses in the particulars of claim and the certificate of balance has also been discovered by the plaintiff as far back as July 2012.

18. Having regard to all the aforesaid I am of the view that the plaintiff cannot, at least as a matter of pleading, be prevented from referring to and relying on the certificate of balance. In the light of the aforesaid it is not necessary for me to decide whether it was necessary for the plaintiff to have attached the certificate of balance to the particulars of claim as a prerequisite for reliance thereon at the trial.

19. As far as costs are concerned, there is no reason why costs should not follow the event.

20. In the result the, the following order is made:

1. The application to amend the particulars of claim as set out in the Notice of Amendment dated 16 March 2015 is granted.

2. The defendant is ordered to pay the costs of this application.

C.P. RABIE

JUDGE OF THE HIGH COURT