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Farmwise Gains (Pty) Ltd v Hageman (1020/2012) [2012] ZAFSHC 101 (24 May 2012)

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FREE STATE HIGH COURT, BLOEMFONTEIN

REPUBLIC OF SOUTH AFRICA

Case No. : 1020/2012

In the matter between:-

FARMWISE GAINS (PTY) LTD ….........................................................Plaintiff

and

REINHARDT HAGEMAN …..............................................................Defendant

____________________________________________________________

JUDGMENT BY: MHLAMBI, AJ

____________________________________________________________

HEARD ON: 3 MAY 2012

____________________________________________________________

DELIVERED ON: 24 MAY 2012

____________________________________________________________



[1] This is an opposed application for summary judgment in terms of Rule 32 of the Uniform rules of the Court. For the purpose of this judgment, the parties shall be referred to as Plaintiff and Defendant.

There are, in my mind, three aspects in dispute in this matter, viz:

  1. Whether the claim is a liquidated amount of money.

  2. Whether the Defendant raised a proper defence in terms of sub rule 3(b).

  3. The concern whether the verification of the cause of action is proper.



[2] The relevant parts of the Plaintiff’s summons are that two agreements were entered into between the parties during May and July 2011 in terms of which the Defendant would deliver 200 metric tons of yellow maize (commodity), at a purchase price of R1 640.00 (one thousand six hundred and forty rand) per metric ton in respect of the 1st agreement; and 100 metric tons of yellow maize at 1661.20 per ton in respect of the second agreement. Further terms and conditions were set out in the South African Contract for Grain, Pulses and Oilseeds and Products Derived Therefrom: “Sagos” Version 8.



[3] Paragraph 5.6 of the summons reads as follows:

In the event of the Defendant failing to complete deliveries or make the commodities available for dispatch/collection by the Plaintiff (whichever is his duty under the contract) by the last day of the contract period, the quantity not delivered against the contract quantity shall be deemed in default. The Plaintiff may, after giving prior written notice:

5.6.1. Purchase against such default, the Defendant to make good the loss, if any, on such purchase, or

5.6.2. Claim damages to be agreed mutually or settled by arbitration, such damages not to exceed the difference between the contract price and the market price on the date of default.”



[4] Counsel for the Plaintiff confirmed that the damages claimed are contractual, flowing from the two contracts for delivery of maize by the Defendant to the Plaintiff. He argued strongly that the claim should be regarded as a liquidated amount in money as the ascertainment of the amount was prompt and a mere matter of calculation.



[5] Damages occasioned by the breach amount to R153 278.20, calculated as follows:

Difference between Agreements’ price and price Plaintiff had to repurchase on SAFEX as at 19 December 2011:

As to the First Agreement (47.1 tons x R867.00 per metric ton)

R40 835.70

As to the Second Agreement (100 tons xR867.00 per metric ton) R86 700.00

Safex Basis Premium Loss R25742.50

Total R153278.20”



[6] The Plaintiff however tenders the amount of R44 584.40, which it holds as retention and security upon payment by the Defendant of the amounts of R153 278.20 to the Plaintiff.



[7] During argument, Counsel conceded that he was unable to explain what exactly the “Safex basis premium loss is”; how and why it featured in the calculation of the damages.



[8] Despite his argument based on the contract between the parties, he relied, in substantiation of the claim, on clause 15 (1) (a) and not on 15(1) (b) of the contract. Clause 15(1) reads as follows:



15.1. In the event of the Defendant failing to complete deliveries or make the commodities available for dispatch/collection by the BUYER (whichever is his duty under the contract) by the last day of the contract period, the quantity not delivered against the contract quantity shall be deemed in default. The BUYER may, after giving prior written notice:

a) Purchase against such default, the SELLER to make good the loss, if any, on such purchase, or

b) Claim damages to be agreed mutually or settled by arbitration, such damages not to exceed the difference between the contract price and the market price on the date of default.”



[9] Prior written notice is attached to the summons as annexure “POC5”.



It appears to be an e-mail dated 27 October 2011 addressed to ‘Agrifin’; CC “hagemannr@telkomsa.net; from Tinus Jacobs re: Geelmielies. I am not convinced that this alleged written notice was admonishing the Defendant to make good by delivering the remaining metric tons of yellow maize.



POC 6 is a letter addressed to the Defendant’s attorneys by the Applicant’s attorneys dated 8 February 2012. In paragraph 2, Agrifin is confirmed as Plaintiff’s representative who contracted with Defendant on its behalf.



[10] Paragraph 4.2 reads as follows:

4.2. In terme van die ooreenkoms sou, inter alia:

4.2.1. U klient aan ons klient 300 ton geelmielies lewer gedurende die periode 1 Julie to 31 Julie 2011;

4.2.2. U klient sou die mielies by Bloemfontein Nutri Feeds aflewer; en

4.2.3. Ons klient die bedrag van R1640 per ton betaal aan u klient, welke bedrag gekoppel was/is aan SAFEX;”



[11] It is the only time and place where mention is made that the amount is/was linked to SAFEX. The whole of the contents of paragraph 4.5 hint at a possible protestation by the Defendant of a repudiation of the agreement by the Applicant. The circumstances for such repudiation are however, not set out.



[12] Defendant filed a notice of intention to oppose the Summary Judgment Application by means of legal argument to be presented by Counsel, and duly filed Heads of Argument on 2 May 2012. This step, of not filing an answering affidavit, did not go well with the Plaintiff, and more so in that no particulars were disclosed as to the legal argument to be made.



[13] Briefly, the Defendant’s Heads of Argument highlight the following:

  1. Plaintiff’s claim is based on damages and, therefore, not on a liquidated amount.

  2. The manner of calculation is based on clause 15(1)(b).

  3. Consequently, in the absence of agreement as to the quantum the claim remains illiquid.

  4. Plaintiff has not complied with Rule 32.

[14] A Defendant upon the hearing of an application for Summary Judgment may in terms of Rule 32:

a) …

b) Satisfy the court by affidavit that he has a bona fide defence to the action; … disclosing fully the nature and the grounds of the defence relied upon.



[15] It is obvious that the Defendant has not acted in accordance with the Rule, and raise a proper defence as required. The question is, notwithstanding the finding, can the court grant leave to defend. See Jacobsen v.d. Berg SA LTD v Triton Yachting Supplies 1974 (2) SALR 584 (C) C-E on 589. In order to exercise the discretion under Rule 32, the Court must examine whether the Plaintiff’s claim complies with Rule 32(1) or (2).



[16] Counsel for the Plaintiff denies relying on clause 15(1)(a), a submission that is contrary to the contents of the Particulars of Claim as shown above and more specifically as pleaded in paragraph 5.6. By specifically pleading and claiming for damages, I am of the view that plaintiff is relying on clause 15(1)(b); consequently his claim can never be a liquidated amount as it is dependent on actions, of either the parties, or third parties to have the amount liquidated. To argue that Plaintiff is relying solely on clause 15(1)(a) and not 15(1)(b), would be irreconcilable with the particulars in support of his claim. Had Plaintiff, in terms of his counsel’s submission, relied solely on clause 15(1)(a), his Particulars of Claim would have been constructed and framed accordingly.



[17] “In our organized society with businesses, trades and professions organized as they are it is normally a matter of no difficulty to determine the usual and current market price of articles sold and the reasonable remuneration for services rendered. These are matters, which as a rule can be ascertained speedily and promptly. Generally speaking therefore a Court can, in exercising its discretion regard such a claim as a debt or liquidated demand unless of course there are features, appearing from the claim as framed or other relevant circumstances, which preclude the Court from regarding such a claim as a debt or liquidated demand in the sense discussed in this judgment’: Fatti’s Engineering Co. Ltd v Vendick Spares Ltd 1962 (1) TPD 736 on 739 E-G”.



[18] I am therefore satisfied that the Defendant’s Heads of Argument fill the lacuna created by the failure to comply with Rule 32(3). Jacobsen van der Berg SA (Pty) Ltd v Triton Yachting Supplies 1974 (2) 08 B p584 to 589 C-E.



[19] I therefore find it unnecessary to decide on the point in limine raised by Defendant’s Counsel in regard to the non-compliance with Rule 32: Maharaj Barclays National Bank LTD 1976 SA 418 (A) 422 D-H.



[20] I therefore make the following order:

    1. Summary judgment is refused and defendant is granted leave to defend the action.

    2. Costs of the Application for summary judgment are left over for decision by the trial Court.















_________________

J. J. MHLAMBI, AJ



On behalf of Plaintiff: Mnr. P J J Zietsman

Instructed by:

Naudes

BLOEMFONTEIN



On behalf of Defendant: Adv. S. Grobler

Instructed by:

Gous Vertue & Associates Incorporated

BLOEMFONTEIN



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