Scania Finance Southern Africa (Pty) Ltd v Mbumba Transport and Logistics RSA (Pty) Ltd (4074/2022) [2024] ZAMPMHC 1 (8 January 2024)

IN THE HIGH COURT OF SOUTH AFRICA

MPUMALANGA DIVISION (MIDDELBURG LOCAL SEAT)

CASE NO: 4074/2022

(1) REPORTABLE: NO

(2) OF INTEREST TO OTHER JUDGES: NO

(3) REVISED

DATE: 08/01/2023

SIGNATURE

In the matter between:

SCANIA FINANCE SOUTHERN AFRICA (PTY) LTD

APPELLANT

And

MBUMBA TRANSPORT AND LOGISTICS RSA (PTY) LTD

RESPONDENT

JUDGMENT

LANGA J:

Introduction

[1] Although in the submissions the Applicant contended that this application is based on the rei vindicatio and the terms of the various agreements entered into between the parties, however, in the notice of motion, Scania Finance Southern Africa (Pty) Ltd, (“the Applicant”), seeks declaratory orders in the following terms. The first is the confirmation of the termination of the consolidated financial agreement entered into between the applicant and Mbumba Transport and Logistics RSA (Pty) Ltd, (“the respondent”). The second is an order declaring that it is entitled to the 8 commercial vehicles belonging to it which are currently in the possession of the Respondent. Thirdly, the Applicant further seeks an order that it be allowed to approach the court on the same papers for an order that the Respondent pay any such amounts as may later be proved to be due and payable by the Respondent in respect of the vehicles in question.

[2] As opposed to the previous ex parte application, in this matter the Applicant does not demand the return of the trucks which it confirms have since been returned to it pursuant the ex parte order which, it is common cause, was later set aside. I deal with this aspect later in this judgment. When this matter was heard, the Respondent was in default and not represented by counsel. The record shows that the Respondent’s erstwhile attorneys apparently withdrew as attorneys of record on 9 June 2022 due to lack of instructions. The Respondent had, however, already filed the heads of argument in respect of this application which I will consider for the purposes of the determination of the issues in this matter.

Concise facts

[3] It is common cause that the Applicant’s claim against the Respondent arises out of eight written agreements in respect of eight commercial vehicles forming the subject matter of this litigation. On 14 February 2020 the parties entered into the first three separate agreements in respect of three Scania trucks. During the period April 2020 and June 2020, they concluded a further five separate agreements in respect of five more Scania truck tractors.

[4] It is further common cause that on 25 June 2021, the parties concluded a consolidation agreement (“consolidated agreement”) in terms of which all the eight agreements were consolidated into one agreement. Although this agreement consolidated the eight agreements, the consolidation, however, did not novate the eight individual agreements which still applied as individual agreements unless they are at variance with the consolidated agreement, in which case the terms of the consolidated agreement would prevail. While the eight agreements will be referred to as the eight agreements, they

will, however, together with the consolidation agreement, be referred to as “the agreements” where necessary and convenient for the purposes of this judgment.

[5] Although the Respondent confirmed that the eight agreements were entered into by it with the Applicant, it also contended that it was under the impression that the agreements were instalment sale or hire agreements and not lease agreements as contended by the Applicant. In its counterclaim in the Magistrates court, the Respondent sought an order rectifying the eight agreements as well as the consolidated agreement as instalment sale agreements based on which the ownership of the goods would transfer to the defendant upon the payment of the final instalment, amongst other things. (My underlining)

[6] It is common cause that despite confirming that it understood the transfer of goods to become effective on the payment of the final instalment as it alleged in the counter claim, the Respondent, however, did not contend that it had paid all the instalments as per agreement when the agreements were purportedly terminated by the Applicant. The Respondent instead contended that the Applicant made it impossible for the Respondent to perform by repossessing the vehicles/goods forming the subject matter of the agreements. Given that the Respondent does not aver that it has paid the instalments it thus appears to be common cause that ownership has not passed to the Respondent as that could only happen upon the payment of all the instalments even if one accepts the Respondent’s contention that the agreements were sale or hire agreements. Further, while in this application the Respondent denied the termination of the agreements it, however, stated in the action that it could not deny they had been terminated.

[7] Despite the debate as to what type of agreements they are, it is nonetheless not in dispute that each of the eight agreements, read together with the consolidation agreement, provided inter alia that the Respondent shall pay monthly instalments to the applicant for the possession and use of the trucks. Clause 6 provided that the Applicant would remain the owner of all the trucks and ownership thereof would only pass to the Respondent upon payment of the last instalment. In the case where the agreement was terminated for whatever reason, Clause 7 of the eight agreements and Clause 18 of the Consolidated agreement provided that the vehicles would be returned to the Applicant.

History of litigation

[8] This genesis of the litigation in this matter is important for a contextual understanding of the issues. It is common cause that when the Respondent fell into arrears in respect of the instalments, the Applicant, after terminating the agreements, demanded the return of the trucks which the Respondent failed to do. Subsequent to that the Applicant brought an urgent ex parte application in the Emalahleni Magistrates court for the return of the trucks. On 11 May 2022 the ex parte was granted with the rule nisi and based thereon the Sheriff attached and handed over the trucks to Applicant. The Respondent in the meantime anticipated the return date on 6 June 2022. After the hearing of the matter an order was eventually granted on 15 June 2022 in favour of the Respondent

essentially setting aside of the ex parte order and ordering that the Applicant returns the trucks to the Respondent. On 20 June 2022 the Applicant noted an appeal against the judgment, in particular order (g) thereof, and that appeal is pending. Order (g) is basically an order that the Applicant return the trucks to the Respondent.

[9] I must pause to mention at this stage that the Respondent subsequently approached the Magistrate’s court on an urgent basis seeking an order in terms of Section 78 of the Magistrates Court Act 32 of 1944, as amended. The Respondent sought an order that the order appealed against by the Applicant (i.e., the return of the trucks to the respondent) be executed pending the appeal. The application for the execution order in terms of Section 78 was granted on 8 July 2022 and subsequent thereto as warrant of execution of delivery was issued.

[10] Meanwhile, on 1 June 2022 the Applicant instituted an action against the Respondent under case number 3026/2022 basically seeking a declaratory order that the cancellation of the agreements be confirmed, the payment of certain amounts for the arrear instalments as well as unexpired term of the agreement, and the return of the trucks plus costs on attorney and client scale. On 23 June 2022 the Applicant launched the current application under case 4074/2022 seeking declaratory orders referred to in paragraph 1 of this judgment, namely, the confirmation of the termination of the consolidated agreement as valid and lawful and directing that the Respondent has no right to possess the vehicles in question. It is noteworthy that the Applicant is no longer claiming the return of the trucks which it confirms it is now possession of. The Applicant also issued a liquidation application simultaneously with the current application seeking the provisional liquidation of the Respondent.

[11] On 5 August 2022 the Applicant brought an urgent application in this court under case 4075/2022 for inter alia the stay of the execution of the Section 78 order granted by the Magistrates Court on 8 July 2022 as well as the suspension of the execution of the judgment of the 8 July 2022 pending a review application. On 16 August 2022 this urgent application was struck off due to lack of urgency. The Applicant has also noted an appeal in respect of the striking off of this urgent application.

The defences

[12] The Respondent raised a number of defences in this application which can be summed up as follows. The Respondent contended that there is a dispute of fact mainly regarding the nature of the agreements as well as the validity of the termination of the agreements. The Respondent further raised the defence of lis pendens and contended that the action instituted by the Applicant in respect of the same issues is still pending.

Lis pendens

[13] I will first deal with the issue of lis pendens as it may be dispositive of the entire application if a finding is made in favour of the Respondent. It is trite that the special plea of lis pendens is meant to ensure finality in litigation in that once a matter has been instituted in one court, it should be finalized by that court before it can be instituted in another court by the same parties on the same cause of action. It is inappropriate for a dispute between the parties to be litigated in two different courts. Thus, if there is a pending litigation between the same parties in

respect of the same subject matter in the same jurisdiction the respondent or defendant may raise this plea entitling her to stay the proceeding pending the finalization of the other.

[14] Therefore the following requirements must be met for lis pendens to succeed.

14.1. There must be pending litigation;

14.2. Between the same parties;

14.3. On the same cause of action and

14.4. For the same relief.

[15] In Nestle (South Africa) Pty Limited v Mars Inc 2001 (4) SA 542 (SCA), the Supreme Court of Appeal held that this special plea can be raised where there is litigation between the same parties, based on the same cause of action and in respect of the same subject matter. This decision was reinforced in Caesarstone Sdol-Yam Ltd v The World Marble and Granite 2000 CC and Others 2013 (6) SA 499 (SCA) where the court stated the following:

“As its name indicates, a plea of lis alibi pendens is based on the proposition that the dispute (lis) between the parties is being

litigated elsewhere, and therefore it is inappropriate for it to be litigated in the same court in which the plea is raised. The policy underpinning it is that there should be a limit to the extent to which the same issue is litigated between the same parties, and that it is desirable that there be finality in litigation…”

[16] Lis pendens is therefore a dilatory defence in the sense that if the party raising it is successful, the later proceedings are postponed or stayed pending the outcome of the pending proceedings in order to prevent multiple actions on the same dispute. A court, however,

retains the discretion based on convenience and fairness to allow a case to proceed, notwithstanding that there is a pending earlier case or proceedings. It is therefore not an absolute bar to the proceedings in which the defence is raised even where these requirements have been met. The party instituting the later proceedings may persuade the court that justice, equity and the balance of convenience are in favour of the hearing of the later proceedings. See also Keyter NO v Van Der Muelen and Another 2014 (5) SA 215 (ECG).

[17] While the Applicant stated in the replying affidavit that it does not agree that the plea of lis pendens is applicable in this matter, the Applicant nonetheless oddly conceded that it would be just and equitable that the action in the Magistrates Court be stayed pending the outcome of this application. Although it is not clear if anything has been done by the Applicant to that end, the Applicant has, however, made an undertaking to take steps to stay the proceedings in the Magistrates court. What is clear from the undertaking to stay the proceedings in the Magistrates Court that is that the Applicant is conceding that there is a pending matter in respect of which the lis pendens defence can be successfully raised. To illustrate this point, concerning the relief sought, the Applicant even undertook to abandon the prayer declaring the cancellation of the agreements valid in the pending action and persist therewith in this application. In this respect the Applicant also apparently conceded that the relief sought in both matters is the same.

[18] Despite abandoning this prayer, the Applicant further contended that the relief sought is not the same as in the pending action, as it is no longer claiming the delivery of the vehicles in this application but a declaratory order that the Respondent has no right to possess these vehicles. The Applicant submitted further that, in any event, it is also withdrawing this claim for the delivery of the vehicles as set out in the pending action as it has already received the vehicles

concerned.

[19] I find that in this case the requirements for the lis pendens defence have been established. The current application is between the same parties, over the same cause of action and the same property. The relief is also clearly the same in both the current matter and the pending proceedings hence the Applicant’s decision not to proceed with the prayers in the pending action. In the light of these facts, the only question which stands to be determined is whether it would be just and equitable to stay the pending proceedings and proceed with this application as contended by the Applicant.

[20] This brings me to issue of the appeal noted by the Applicant against the order made by the Magistrate ordering the Applicant to hand over the same vehicles to the Respondent. It is common cause that order is the subject of an appeal which, according to the Respondent’s papers, was to be heard on 1 December 2023. It is, however, not clear at the writing of this judgment as to what the status of the appeal is. What is clear though is that subsequent to this order, and when the Applicant failed or refused to hand over the vehicles to the Respondent in terms of the said order, the Respondent obtained an order in terms of Section 78 of the Magistrates Court Act to execute that order.

[21] Section 78 deals with execution of orders where an appeal has been noted and provides as follows:

Where an appeal has been noted or an application to rescind, correct or vary a judgment has been made, the court may direct either that the judgment shall be carried into execution or that execution thereof shall be suspended pending the decision upon the appeal or application. The direction shall be made upon such terms, if any, as the court may determine as to security for the due performance of any judgment which may be given upon the appeal or application.

[22] The applicant did not oppose the application which was subsequently granted. The Applicant was accordingly ordered, pending the appeal, to hand over the 8 trucks to the Respondents subject to certain conditions, including the furnishing of security by the Respondent amongst other conditions. What is of concern to me is that in this application the Applicant seeks inter alia an order that the Respondent has no right to possess the same vehicles. Such an order is problematic as in the light of the order made by the Magistrate it would practically amount to the setting aside of the order made by the Magistrate against the Applicant which the latter has not complied with. The Applicant in argument also correctly stated that it would be improper for this court to pronounce upon other matters which are pending in the High Court and the Magistrates Court and that should include this order regarding is entitled to the trucks. Ironically, although this aspect of who is entitled to the possession of the trucks is the subject matter of the said appeal, the Applicant is however not addressing it in this application. The Applicant has skirted the issue to suit the argument.

Conclusion

[23] I am further concerned about the manner in which the applicant has litigated in this matter on the same cause of action and subject matter. The ex parte application under case 3026/2022 and the subsequent appeal; the pending action under case number 3026/2022; this application under case 4074/2022 and the urgent application under case number 4705/2022 were all about the same cause of action and the same trucks. The Magistrate’s adverse findings made on 15 June 2022 regarding the ex parte application were not appealed against by the Applicant. Only order (g) ordering the Applicant to return the trucks was appealed against. The Applicant therefore appears to have accepted that the rest of application was correctly dismissed.

[24] Considering the above, this application in my view amounts to an abuse of the court process. Having appealed the same issue, the Applicant wants the proverbial second bite at the cherry by asking this court to make an order regarding the right to possess the vehicle despite the fact that this issue is on appeal. It is also interesting to note that the Applicant is not asking for an order in positive terms declaring it to be entitled to the possession of the truck. It instead asks for a negative declaratory order that the Respondent does not have the right to possess the truck. The only reason for this choice of words is in my view to circumvent and render moot the order by the Magistrate. The Applicant is obviously asking for such order as it is now in possession of the trucks albeit on the basis of an order that has been set aside.

[25] Further, sight must also not be lost of the fact that it is the Applicant’s assertion in reply that it “lawfully’’ procured the attachment of the vehicles through a rule nisi granted by the Magistrates Court on 11 May 2022. It, however, curiously does not mention that this is the same ex parte order which was reversed by the same court and which it has noted an appeal against. The Applicant insists on the right to possess the vehicles on the basis of an order which it is well aware has been set aside. The Applicant persists with this prayer for a declaratory order in this matter while fully aware that another court has decided that the it, the Applicant, is not entitled to keep possession of the trucks which ruling the Applicant has appealed against. The Applicant now wants this court to overturn that decision by making an order that the Respondent has no right to possess the same trucks. This would clearly amount to pre-empting the pending appeal which is seized with this same issue. It would therefore amount to deciding the appeal through the backdoor, so to speak, for this court to make such as order. Consequently, although I have my opinion regarding this aspect, it will however be improper to pronounce myself thereon here. The appropriate forum to deal with this aspect is the appeal court seized with the appeal. (My emphasis).

[26] I am consequently not persuaded that the Applicant has made out a case for the granting of any of the prayers in the notice of motion. It will not be just and equitable to proceed with this application and to stay the pending action in the Magistrates Court. It will further be inappropriate for this court to pronounce on an issue which is the subject of an appeal in this court. In the light of the aforementioned, the appropriate order should be one dismissing this application with costs on a punitive scale. In the light of this ruling, it will not be necessary to consider the issues of the contract, termination and ownership which were argued in respect of the merits.

Order

[27] In the result I make the following order:

The application is dismissed with costs on the scale as between attorney and client.

MBG LANGA

JUDGE OF THE HIGH COURT

Appearances:

For the Applicant/Plaintiff: Advocate BD Hitchings For the Respondent: No Appearance Date heard: 05 October 2023 Date delivered: 08 January 2024

This judgment was handed down electronically by circulation to the parties’ representatives by email. The date for hand-down is deemed to be the 08 January 2024 at 15h30.