Case summary written by Tayla Bruce and checked by Lauren Squier.
03 December 2020
Background:
The Plaintiff and the First Defendant entered into and concluded a supply agreement, in terms of which the Plaintiff would supply to the First Defendant certain diesel petroleum products (“the Agreement”). In accordance with the terms of the Agreement, the Plaintiff supplied the product to the First Defendant from time to time. Despite having received the product from the Plaintiff, the First Defendant failed to make payment to the Plaintiff in the amount of R496 423.00 (Four Hundred and Ninety-Six Thousand Four Hundred and Twenty-Three Rand) (“the Outstanding Amount”) for a certain product delivered.
Accordingly, the Plaintiff and the First Defendant entered into an acknowledgement of debt agreement for the Outstanding Amount, wherein the First Defendant agreed to repay the Plaintiff by way of instalments. The Second Defendant had bound herself as a co-principal debtor and surety for the fulfilment of the First Defendant’s obligations to the Plaintiff.
After having effected a number of instalment payments, the First Defendant defaulted in terms of the acknowledgement of debt. Accordingly, the Plaintiff instituted action against the First and Second Defendant, jointly and severally, the one paying and the other to be absolved, for the sum of R422 731,05 (Four Hundred and Twenty-Two Thousand Seven Hundred and Thirty-One Rand and Five Cents).
The First Defendant filed a plea to the Plaintiff’s particulars of claim, which did not contest the averments contained therein, but disputed the amount as claimed by the Plaintiff. In accordance with the amended summary judgement court rules, the Plaintiff instituted an application for summary judgement against the First and Second Defendant.
The First and Second Defendant opposed the application on the grounds that there was a dispute in respect of the quantum of the Plaintiff’s claim and that the Plaintiff’s claim was not for a liquidated sum of money. Additionally, the Defendants averred that they had effected certain payments to the Plaintiff, after receipt of the summons, despite not having furnished the Court with any proof thereof.
Lastly and during the Court proceedings, the Defendants raised a new defence alleging that they had received product from the Plaintiff, which they had ordered but subsequently cancelled and that the amount in respect of this product had not been deducted from the amount claimed by the Plaintiff. This defence was not raised in the Defendants’ plea.
Court held
In dealing with the defence of liquidity, the Court noted that the Defendants failed to deny any terms of the Agreement or the acknowledgement of debt. The Court held that the payments made by the Defendants, post action, did not render the Plaintiff’s claim illiquid and that the Plaintiff’s claim remains for a liquidated amount, which is to be reduced by any payments effected by the Defendants.
In consideration of whether the Defendants put up a bona fide defence, the Court placed significant emphasis on the Defendants’ contention that they had made more payments to the Plaintiff but nevertheless failed to provide any proof or particularity of these said payments. Furthermore, the Court held that the Defendants’ omissions in support of their defence was of significance, namely, their failure to provide dates for their alleged payments; their failure to state the amounts of these alleged payments; their failure to state how many payments were made and their failure to put up any documents in support of these payments. The Court found that the Defendants failed to fully disclose the facts relied upon by them in order to successfully resist the summary judgement.
In respect of the Defendants’ averment that they had received product which they had cancelled, the Court held that “a defendant must fully disclose the nature and grounds of his defence and the material facts relied upon, which the defendant genuinely desires and intends to adduce at the trial.” The Court concluded that the Defendants failed to engage with the reduced quantum of the Plaintiff’s claim to any significant extent.
As a result, the Court granted summary judgement in favour of the Plaintiff.
Value
Where a defendant in summary judgment proceedings relies on an unliquidated counterclaim but fails to indicate the amount of such counterclaim, and where it appears that the counterclaim is likely to be substantially less than the main claim, such counterclaim does not constitute a bona fide defence to the action.
