ROSPA Training 289 CC Reg. No. CK 2011/06788/23 (1164/2021) [2021] ZAFSHC 241 (11 October 2021)

IN

THE HIGH COURT OF SOUTH AFRICA

FREE STATE DIVISION, BLOEMFONTEIN

Case no: 1164/2021

In the matter between:

ROSPA TRADING 289

CC

REG NO. CK 2011/067881/23

APPLICANT

and

MALUTI-A-PHOFUNG

LOCAL MUNICIPALITY

RESPONDENT

CORAM:

PAGE AJ

HEARD ON: 19 August 2021

DELIVERED ON: 11 October 2021

[1] The Plaintiff instituted action proceedings against the Defendant, by way of Simple Summons claiming payment of a total amount of R 10 219 883.00 with interest of 10.25% from date of demand until full and final payment. A document purported to be an acknowledgment of debt is annexed to the simple summons.

[2] Subsequent to an entry of appearance to defend the action, the Plaintiff delivered a declaration, whereafter the Defendant delivered a special plea and a plea.

[3] The Plaintiff applies for summary judgment which is before me for adjudication. The application is opposed. I will refer to the Applicant in the summary judgment as the Plaintiff and to the Respondent as the Defendant.

Rule 32 of the Uniform Rules of Court:

“(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 a specified movable property; or

(d) For ejectment; “

[4] The Plaintiff’s claim is based on Rule 32(1)(a), namely a liquid document and Rule 32(1)(b), a liquidated amount in money.

[5] The Defendant submits that the document is a “purported” liquid document but does not go on to argue why it does not qualify as a liquid document. The Defendant’s opposition to the application for summary judgment is focused on the averment in para 14 of the Plaintiff’s declaration which states that the Plaintiff suffered damages in the total amount of R 10 219 883.00.

[6] Both parties refer to the service level agreement concluded between them. The Plaintiff submits that the acknowledgement of debt constituted the new causa upon which its claim is based. The Defendant submits that the Plaintiff’s cause of action is premised upon the service level agreement as pleaded.

[7] It is necessary for the court to determine firstly whether the Plaintiff’s claim is based on the first two categories, namely a liquid document or a liquidated amount in money in order to find whether the application for summary judgment complies with Rule 32 of the Uniform Rules.

Liquid Document

[8] The Plaintiff relies on a two page document which is addressed to the director of the defendant and is dated 10 November 2017. It is signed by Mokoana Robert Tsupa.

[9] I find it apposite to quote the document purported to be an acknowledgment of debt below for consideration of whether it in fact falls within the definition of a liquid document.

“RE:

COMMITMENT BY MALUTI A PHOFUNG MUNICIPALITY TO SETTLE THE AMOUNT OF R 5 943 083.00 ( FIVE MILLION NINE HUNDRED AND FORTY

THREE THOUSAND, EIGHTY THREE THOUSAND) TO ROSPA TRADING 289 CC ( SCM/BID17/2016/2017)

1. Maluti A Phofung Municipality hereby confirm that it is indebted to Rospa Trading 289 CC, Bid number (SCM/BID 17/2016/2017) in the amount of R 5 943 083.00. The whole amount will be settled in full by not later than the 1st May 2018.

2. Rospa Trading 289 CC, dully represented by its director, Mr. Thebe Abram Ketsise gave Maluti A Phofung Municipality assurance that it will not sell the motor vehicles belonging to Maluti A Phofung Municipality as contained in the attached document marked “A”, in its possession before 1st May 2018.

3. Rospa Trading 289 CC assured Maluti A Phofung Municipality that, once the full payment of R 5 943 083.00 is settled, it will return all the motor vehicles in its possession to Maluti A Phofung Municipality. Storage of R 300.00/day per car will be charged with effect from 2nd of May 2018 until the date of full settlement.

4. In the event Maluti A Phofung Municipality fail to pay the full amount of R 5 943 083.00 and Rospa Trading 289 CC, sell the cars listed in “A”, Maluti A Phofung Municipality will be liable for the short fall which also includes legal as well as auction costs incurred by Rospa Trading arising from the sale of the motor vehicles.

5. Maluti A Phofung Municipality will not hold Rospa Trading and its director criminally as well as civilly liable for the sale of the motor vehicle listed in document “A”, only if payment of the amount of R 5 943 083.00 is not done by the 1st of May 2018 and the sale of the vehicle is done by after the 1st of May 2018.

6. This communication to Rospa Trading 289 CC is a clear sign of Maluti A Phofung Municipality’s commitment towards settling the outstanding amount of R 5 943 083.00 it owes to Rospa Trading 289 CC.

7. In the event of misunderstanding or clarity seeking, please don’t hesitate to contact the office of the Chief Financial Officer, Mr Mofokeng at 058 718 3709.

I hope you will find the above in order.

NAME:

MOKOANA ROBERT TSUPA

SIGNATURE” ( Signed)

[10] The definition of a liquid document which was laid down in Rich v Lagerwey 1974(4) SA 748 at 754 H is still cited by our courts today, it is also trite that the definition of a liquid document is the same for purposes of provisional sentence proceedings. The well known definition is quoted below:

“If the document in question, upon a proper construction thereof, evidences by its terms, and without resort to evidence extrinsic thereto, is an unconditional acknowledgement of indebtedness in an ascertained amount of money, the payment of which is due to the creditor, it is one upon which provisional sentence may properly be granted.”

[ 11] In Union Share Agency and Investment Ltd v Spain 1928 AD 74 at 79, Solomon CJ stated the following on the issue:

“It is of the essence of the doctrine of provisional sentence that the acknowledgement of debt or the undertaking to pay should be clear and certain on the face of the document itself and that no extrinsic evidence should be required to establish the indebtedness.”

[12] The court further held that due to the indebtedness being subject to the happening of an event and the payment or performance being subject to an event, that there was no unequivocal acknowledgment of indebtedness or unconditional undertaking to pay.

[13] In Inter-Union Finance LTD v Franskraalstrand Bpk 1965(4) SA 180 (W) at 181 F-G the following is stated:

“Provisional sentence may only be granted on a liquid document which is a document wherein a debtor acknowledges over his signature, or that of his duly authorised agent or is in law regarded as having acknowledged without his signature actually been affixed thereto, his indebtedness in a fixed and determinate sum of money The amount of the debt must be ascertained and the document must be sufficient in itself and not require extrinsic evidence to prove that the debt is due.”

[14] The purported acknowledgment of debt in these proceedings includes a confirmation of an indebtedness by “Maluti A Phofung Municipality” in the amount of R 5 943 083.00. No reference is made by a duly authorised representative of the Defendant with reference to the confirmation in this paragraph. It further states that the said amount will be settled not later than the date mentioned therein.

[15] The additional matters dealt with in the document includes an “assurance” mentioned to have been given by the Plaintiff’s representative that the vehicles in issue will not be sold before 1 May 2018. This seems to be an undertaking made by the Plaintiff in a document only signed by the Defendant.

Further, the document provides for the return of all motor vehicles in possession of the Plaintiff upon full payment of R 5 439 083.00. The payment of a possible shortfall in the event of the sale of the vehicles is mentioned in the document. The mention of auction costs, criminal and civil liability of the Plaintiff, and the event of misunderstanding or lack of clarity of the document in which case the Chief Financial Officer, needs to be contacted telephonically.

[16] The signatory is “Mokoana Robert Tsupa”. The signature appears above his name and as it appears, it is signed in the signatory’s personal capacity.

[17] The document lacks clarity and certainty in respect of the debt and the payment thereof because of the added terms thereto. The document provides for an event of “misunderstanding or clarity seeking” which may be resolved via a telephone call. The misunderstanding or clarity seeking may be regarding the amount, the date of payment and any issue affecting the liquidity of the document. It may lead to the need of extrinsic evidence in respect of the debt and payment thereof. The fact that the signatory is not a duly authorised agent/representative of the Defendant is the most glaring aberration in the document.

[18] On a proper construction of the document, I find that it does not fall within the definition of a liquid document.

Liquidated amount in money

[19] The Plaintiff avers that the document contains a liquidated amount in money which is comprised of the storage fee payable for an unspecified number of vehicles mentioned in “annexure A” which is not attached to the document.

A liquidated amount in money is an amount which is either agreed upon or which is capable of speedy and prompt ascertainment. [1]

[20] Firstly, the document does not mention the number of vehicles but refers to an Annexure which is a list of the vehicles in possession of the Defendant before a certain date. Storage is to be paid from 2 May 2018 until the day of settlement, but provision is also made for the vehicles to be sold by the Plaintiff in the event that the debt is not paid.

[21] Evidently, this claim does not fall within the definition of a liquidated amount due to the above uncertainties. The number of vehicles is not specified, the period of storage is uncertain. On the facts at hand contained in the document, the amount of the claim cannot be speedily and promptly ascertained.

[22] For these reasons, it is abundantly clear that the application is futile since it does not fall within the scope of categories within which summary judgment proceedings may be launched.

The Affidavit in support of Summary Judgment Proceedings.

[23] Rule 32(2)(a) requires the affidavit in support of the application for summary judgment to be made by the Plaintiff or by any other person who can swear positively to the facts.

[24] It is noted that the person who attested to the affidavit on these papers is Andile Charles Mlozana, a male practising attorney and the attorney of record of the Plaintiff. He states therein that he is duly authorised by the Applicant to lodge and pursue the application on its behalf. He states that the contents of the affidavit fall within his personal knowledge. The deponent further confirms the correctness of the amount claimed and that it is based on the acknowledgment of debt.

[25] The deponent is not the Plaintiff, and certainly, no reasons are stated in the affidavit which supports a confirmation that he can swear positively to the facts related to the determination of the total amount claimed.

[26] The Supreme Court of Appeal deals with the requirement in Rule 32(2)(a) in the instance of the deponent being someone other than the Plaintiff who can swear positively to the facts and the following is said:

“…such other person’s ability to swear positively to the facts is essential to the effectiveness of the affidavit as a basis for summary judgment; and the Court entertaining the application therefor must be satisfied, prima facie, that the deponent is such a person. Generally speaking, before a person can swear positively to the facts in legal proceedings they must be within his personal knowledge. For this reason the practice has been adopted, both in regard to Rule 32 and in regard to some of its provincial predecessors, ( and similar rule in the magistrate’s courts), of requiring that a deponent to an affidavit in support of the summary judgment, other than the plaintiff himself, should state, at least, that the facts are within his personal knowledge (or make some averment to that effect), unless such direct knowledge appears from other facts stated…The mere assertion by a deponent that he can swear positively to the facts ( an assertion which merely reproduces the wording of the Rule) is not regarded as being sufficient, unless there are good grounds for believing that the deponent fully appreciated the meaning of these words…In my view, this is a salutary practice. While undue formalism in procedural matter is always to be eschewed, it is important in summary judgment applications under Rule 32 that, in substance, the plaintiff should do what is required of

him by the Rule. The extraordinary and drastic nature of the remedy of summary judgment in its present form has often been judicially emphasised. …The grant of the remedy is based upon the supposition that the plaintiff’s claim is unimpeachable and that the defendant’s defence is bogus or bad in law. One of the aids to ensuring that this is the position is the affidavit filed in support of the application; and to achieve this end it is important that the affidavit should be deposed to either by the Plaintiff himself or by someone who has personal knowledge of the facts.”

[27] In Shackleton Credit Management (PTY)LTD v Microzone Trading 88 CC and Another, 2010(5) SA 112, at p115 para G – p116 paras A-C, the following quote by Wallis J resonates:

” The requirement that the founding affidavit be deposed to by the applicant or some other person who can swear positively to the facts precludes the affidavit being deposed to by someone whose knowledge of those facts is purely a matter of hearsay. Thus a person who deposes to such an affidavit on the basis that their information comes from another source, whether another person or from documents, is not a person who can swear positively to the facts giving rise to the claim. ..An affidavit by an attorney based on information given to the attorney by the client does not comply with the rule because the attorney is not in a position to swear positively to the facts. Such an affidavit is nothing more than an affidavit of information and belief containing inadmissible hearsay. An application founded on such an affidavit is as a result defective.”

[28] The above authority deals squarely with the issue before me. It cannot be emphasized more that the Plaintiff should comply with the requirement that the deponent of the affidavit annexed in support of an application for summary judgment should be deposed to by himself or a person who can swear positively to the facts. The affidavit of the attorney of record of the Plaintiff in the matter before me does not contain any personal knowledge of the acknowledgement of the debt in question by the Defendant. Neither does it contain sufficient averments to substantiate the knowledge of the deponent regarding the details of the payment of the debt. The deponent’s information is clearly based on what his instructions were from his client which amounts to hearsay and is limited to the institution of the proceedings based on the document attached.

[29] The application before me does not meet the first requirement set out in Rule

32(1) since it is not based on a liquid claim nor a liquidated amount. The affidavit annexed to the application in support thereof does not comply with Rule 32 (2)(a). I have accordingly not dealt with the rest of the arguments submitted.

[30] In the premises I make the following order:

1. The Application for summary judgment is dismissed.

2. The costs of the application is reserved for later determination.

3. The Defendant is given leave to defend the Plaintiff’s action.

PAGE

AJ

COUNSELF FOR THE APPLICANT: Adv Bahlekazi

Instructed by MLOZANA ATTORNEYS

COUNSELF FOR THE RESPONDENT: Adv Pienaar

Instructed by J H Conradie

[1] Lester Inverstments (PTY)LTD v Narshi 1951(2)SA 464(C)