Saldosol Investments (Pty) Ltd v Amathole District Municipality (EL705/2021) [2023] ZAECELLC 15 (13 June 2023)

Key Facts

Transaction Type

Issues

• Whether the defendant's claim that parts of the plaintiff's demand for arrear rental and interest have prescribed under the Prescription Act 68 of 1969 is valid, particularly considering payments made by the defendant as interruptions to prescription.
• Whether the defendant's payments and a meeting in May 2021 constitute a valid acknowledgment of liability sufficient to interrupt prescription, and whether such acknowledgment can be determined without trial evidence.
• Whether the plaintiff's failure to comply with the Institution of Legal Proceedings against Certain Organs of State Act 40 of 2002 bars the action, and whether condonation for non-compliance can be granted in a summary judgment application.

Holdings

Remedies

• The plaintiff is ordered to pay the costs of the summary judgment application as per the court's ruling.
• Summary judgment is refused as the defendant's defenses raise triable issues warranting a trial.
• The defendant is granted leave to defend the action following the court's refusal of summary judgment.

Legal Principles

• The court referenced estoppel principles in the context of acknowledgment of liability interrupting prescription. However, it concluded that the facts did not establish such an acknowledgment definitively.
• The standard of proof in summary judgment proceedings was emphasized as requiring the court to evaluate whether the defendant's defense was genuinely advanced rather than determining its substantive merit. The court found the defendant's defenses met this standard.
• The court applied the principle of burden of proof in determining that the defendant's defenses were genuine and required a trial. The plaintiff failed to discharge its burden to establish that the defenses were not bona fide, as required under summary judgment procedures.

Precedent Name

• Standard Bank of South Africa Ltd v Oneanate Investments (Pty) Ltd (in liquidation)
• Tumileng Trading CC v National Security and Fire (Pty) Ltd
• Mothupi v Member of the Executive Council, Department of Health Free State Province
• Frost Consolidated Lease Incorporation (Pty) Ltd v Service SA (Pty) Ltd & Another
• Pentz v Government of the Republic of South Africa
• Director-General, Department of Public Works v Kovacs Investments 289 (Pty) Ltd
• Pillay v Krishna and Another

Key Disputed Contract Clauses

• Clause 4.2 allows the landlord to allocate payments to any amount payable by the tenant. The defendant contended this clause was not pleaded in the particulars of claim, making payment allocation unclear, while the plaintiff used it to justify their statement of updated payments.
• Clause 4.1.4 stipulates that any other amounts not specified in 4.1.1–4.1.3 are payable on demand. The defendant argued that interest was only payable on demand, while the plaintiff claimed it was included in invoices and governed by the lease terms.

Cited Statute

• Institution of Legal Proceedings against Certain Organs of State Act 40 of 2002
• Prescription Act 68 of 1969

Judge Name

Passage Text

• [52] [...] the condonation sought cannot be granted in these proceedings because the defendant has pleaded prescription of the claim or a portion thereof. [...] That constitutes a dispute between the parties which is worth taking to trial.
• [47] The fact that the plaintiff in its replication to prescription disputed that any of the claimed amounts have prescribed [...] indicates that there is merit in the defenses raised by the defendant.
• [70] For all the reasons given above, I am satisfied that the defenses that have been raised by the defendant are bona fide and do raise triable issues that warrant ventilation before a trial court. It follows that summary judgment should be refused.

Damages / Relief Type