Brooklyn Investments (Pty) Ltd v Bhembe (506/2018) [2020] SZHC 09 (17 January 2020);

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Civil Procedure – Application for summary judgment – Plaintiffs’ claim based on allegations of fraud.

The Plaintiff claimed from the Defendant an amount of E87, 500-00. In its affidavit resisting summary judgment the Defendant raised a counter-claim in excess of the claim and, over and above that, raised a number of triable issues.

Full judgment

IN THE HIGH COURT OF ESWATINI

JUDGMENT

Case No. 506/2018

BROOKLYN INVESTMENTS (PTY) LTD PLAINTIFF

And

BONGANE BHEMBE DEFENDANT

Neutral citation: Brooklyn Investments (Pty) Ltd and Bongane Bhembe (506/2018) [2020] SZHC 09 [17TH JANUARY 2020]

Coram: MLANGENI J

Heard: 15/02/2019

Order: 15/02/2019

Delivered: 17/01/2020

SUMMARY

Civil Procedure – Application for summary judgment – Plaintiffs’ claim based on allegations of fraud.

The Plaintiff claimed from the Defendant an amount of E87, 500-00. In its affidavit resisting summary judgment the Defendant raised a counter-claim in excess of the claim and, over and above that, raised a number of triable issues.

Held: It is settled in our law that a counterclaim is a defence to a claim.

Held, further: The defendant has raised triable issues, hence the matter should go to trial.

Application dismissed with costs.

JUDGMENT

(Reasons For Dismissing Summary Judgment Application)

[1] While it is every litigant’s right to appeal an adverse decision or judgment, it is most unfortunate when the appeal procedure is invoked in circumstances where the litigant would have been immensely better of by taking the matter to the next level, in this case to the trial of the issues that have arisen in the pleadings. In my opinion the appeal that has been lodged is a sad epitome of the quality of legal service that is received by some clients, at a cost. Legal practitioners ought to know that summary judgment procedure can never be used as a ruse by a litigant who is afraid of going to trial. This case appears to have all the characteristics of that.

[2] The Plaintiff’s claim against the Defendant is for payment of a sum of E87, 000-00, it being alleged that the Defendant fraudulently diverted for his personal gain, monthly rentals in respect of immovable property, which rentals were due to the Plaintiff, and that this happened during the period December 2015 to January 2018. It is further alleged that in diverting the said rentals the Defendant issued fraudulent receipts to the tenant who is one Charles Rudd.

[3] So the Plaintiff’s claim, on his own showing, is based on fraud. I am not aware that allegations of fraud can be effectively determined in summary judgment proceedings. Matters of fraud unavoidably require oral evidence to untangle. It is my view, rightly or wrongly, that any reader of the law at this level should know this. But what is worse for the Plaintiff is that prior to the application for summary judgment being filed the Defendant filed its plea on the 18th May 2018. The application for summary judgment was filed on or about the 15th June 2018. The Defendant’s plea has a counterclaim amounting to E125, 000-00, by far in excess of the amount claimed by the Plaintiff from the Defendant. The alleged basis of the counterclaim is the Defendant’s share in the proceeds of the sale of immovable property that was co-owned by the litigants and for which the Plaintiff allegedly did not account to the Defendant. It is trite that a counterclaim is a defence to a claim, and yet despite this the Plaintiff believes that it was entitled to summary judgment. If it was to be granted the summary judgment, what would then become of the Defendants counterclaim which, exfacie, cannot be dismissed as a ploy to buy time.

[4] Apart from the counterclaim the Defendant has raised, in his plea as well as in the affidavit resisting summary judgment, a number of triable issues. I mention them hereunder.

4.1 Some of the receipts that were issued to the tenant in respect of rental do not show the Defendant as recipient of the money. Receipts 019, 020, 023, and 024 at pages 14 and 15 of the Book of Pleadings, show that the rental in respect thereof were received by someone other than the Defendant. In respect of receipt 020 the recipient has signed as “M. Mkhatshwa”, and the same goes for receipt 024. The said Mkhatshwa is said to be the Plaintiff’s employee. In respect of the other receipts the signatories hardly give a hint on who acknowledged the payment.

4.2 As part of his defence the Defendant avers that he was a shareholder in the Plaintiff company which owned the immovable property that is at the heart of this litigation. In his affidavit resisting summary judgment the Defendant avers that the Plaintiff took a resolution in terms of which the Defendant was to appropriate for his personal use monthly rental in respect of one of the three residential units that were owned by the Plaintiff and in which the Defendant held ten (10) per cent shares. The said resolution, the Defendant further avers, also mandated the Plaintiff’s main deponent to appropriate for his personal use the monthly rental in respect of the second residential unit. This means that what was then due for payment direct to the Plaintiff was rental in respect of the third and last unit. To fortify its submission on the issue raised in this paragraph the Defendant states that this arrangement went on “smoothly for a period of two (2) years”, and proceeds in this manner-

“Surely if the Defendant was not mandated to retain the rentals, the Plaintiff company would have instituted legal proceedings as soon as possible since 2015” 1.

It is common cause that summons were issued in court on the 3rd April 2018, some years after the alleged sharing of rentals resolution and agreement.

4.3 To compound the Plaintiff’s case further, in its application for summary judgment it has annexed the confirmatory affidavit of one Sharon Rudd. In the affidavit resisting summary judgment the Defendant states that he has conferred with the said Sharon Rudd to confirm the veracity of the contents of the affidavit and “was surprised to gather from Sharon that she never deposed to the aforesaid affidavit” 2. This, of course, smacks of criminal conduct.

[5] In view of the aforegoing, can it be said that the Plaintiff’s case meets the benchmark of this drastic and extra-ordinary procedure? Certainly not. Triable issues loom like a colossus, and the fact that there is a counterclaim which far exceeds the claim shows how ambitions and foolhardy it was for the Plaintiff to apply for summary judgment fully aware what the Defendant’s case was, and to persist with same despite the contents of the affidavit resisting summary judgment.

[6] Honourable Judges of this court, and the court above, have written so much on this subject that I see no need to refer to case law. In the case of MBULUZI GAME RESERVE (PTY) LTD V IRON WOOD (PTY) LTD ANOTHER 3 I had occasion to make the following remarks-

“There is hardly anything new that may be added to the erudite discourses that have been made over the years on the subject. It is accepted that although the remedy is stringent in nature, effectively closing the door to a litigant who may have something to say, its true value is in avoiding a long and costly trial in circumstances where the Defendant has no real and bona fide defence – where, in other words, the Plaintiff has an unanswerable claim against the Defendant 4”.