Court name
High Court of eSwatini
Case number
3279 of 2011

R v MTN and ZBK SERVICES and Other (3279 of 2011) [2011] SZHC 52 (11 March 2011);

Law report citations
Media neutral citation
[2011] SZHC 52
Coram
Ota, J

 

IN THE HIGH COURT OF SWAZILAND

 

HELD AT MBABANE                                  CASE NO. 3279/2011

In the matter between

MTN SWAZILAND                                                PLAINTIFF

And

ZBK SERVICES                                         1ST DEFENDANT

 

BONGIZIPHO DLAMINI                              2ND DEFENDANT

 

CORAM                                                      OTA J.

 

For plaintiff                                      N.V MABUZA

For  Defendants                               S.M. Simelane

 

 

 

[1]    “A journey of a thousand miles begins with one step” I prefer to take the first step in this judgment by stating the claim and the facts upon which same is founded. They are as follows:-

 

[2]    The plaintiff sued out a simple summons against the 1st and 2nd defendants.  After the defendants filed a notice of intention  to defend, the plaintiff delivered a Declaration filed contemporaneously with an application for summary judgment, pursuant to Rule 32 of the rules of this court, wherein the plaintiff claimed the following from the defendants, jointly and severally, one paying the other to be absolved:-

 

[3]    CLAIM A

 

  1. Payment of the sum of E27,408-89 (Twenty Seven Thousand Four Hundred and Eight Emalangeni Eighty Nine Cents)
  2. Interest thereon at the rate of 9 % per annum a tempora morae,
  3. Collection Commission,
  4. Costs of suit at attorney and client scale.
  5. Further and/or alternative relief.

 

CLAIM B

 

  1. Payment of the sum of E1,025,839.11 (One Million and Twenty Five Thousand Eight Hundred and Thirty Nine Emalangeni Eleven Cents)
  2. Interest thereon at the rate of 9 % per annum a tempora morae.
  3. Collection Commission.
  4. Costs of suit at attorney and client scale.
  5. Further and/or alternative relief.

 

[4]    Plaintiff’s allegation in the Declaration is that there were 3 written agreements entered by the parties, in relation to the transactions subject matter of the disputes in respect of which this action was instituted.  Under claim A, the parties signed one written agreement exhibited to the declaration, as annexure 1, which was entered into on the 22nd December, 2006.  In terms of that agreement, the plaintiff was to provide, cellular phone services to the Defendants at their request.  The plaintiff alleges that it dutifully discharged all it’s contractual obligations and rendered the cellular phone services, as per the terms of the agreement between the parties.  The Defendants were billed for the services rendered, as demonstrated by a sample of the bill annexed to the papers herein.  The plaintiff further alleges, that the defendants failed or refused to settle the bills sent to them for payment, inspite of the fact that they raised no queries in respect thereof, as required by the terms of the agreement, and  without lawful justification.

 

[5]    The plaintiff further alleges that under claim B, the parties signed two written agreements, wherein the plantiff appointed the defendants to be its distributor, for Airtime, as well as virtual Airtime. That the antecedent of this agreement is, that the defendants wrote a letter to the plaintiff requesting to be appointed as a Distributor of the Plaintiff’s product. The Plaintiff replied the defendants in the affirmative, subject to the signing of the distribution agreements regulating the transaction between the parties.  That the plaintiff duly prepared the agreements and dispatched them  to the Defendants for scrutiny and signature.  That the material terms of both agreements as to the rights and obligations of each party, effective date, entire agreement, etc are the same.  That both contracts were to commence on the 1st of September 2008, and remain in force until the 31st of December 2009.  That pursuant to the two agreements, the plaintiff duly delivered the products to the Defendants for them to sell.  However, on demand for payment for the products supplied to the defendants, the defendants drew cheques which were dishonoured by the bank. That the cheque payments were not sanctioned and were in breach of both contracts.  When the defendants were intimated of this state of affairs, the 2nd  defendant bound himself personally for the due payment of all sums due to the plaintiff, and also acknowledged his indebtedness unequivocally.  That despite this acknowledgment, the defendants have failed to pay the totality of the sums owed in these transactions, leading to the institution of this action. 

 

[6]    I heard oral argument in this application on the 24th of February 2011. It is apposite for me at this juncture before  tackling the substance of this matter, to return to first principles and revisit the very familiar, yet fundamental propositions on summary judgments, as  adumbrated by case law, both within and without this jurisdiction, over the decade.

 

[7]    In the Supreme Court of Swaziland case of Zanele Zwane V Lewis Stores (Pty) Ltd t/a Best Electric, Civil Appeal No 22/07, the court enunciated these principles as follows,  per Ramodebedi JA (as he then was)

[8]    ‘‘It is well-recognised that summary judgment is an extraordinary remedy.  It is a very stringent one for that matter.  This is because it closes the door to the defendant without trial.  It has the potential to become a weapon of injustice unless properly handled.  It is for these reason that the courts have over the years stressed that the remedy must be confined to the clearest of cases where the defendant has no bonafide defence and where the appearance to defend has been made solely for the purpose of delay.  The true import of the remedy lies in the fact that it is designed to provide a speedy and inexpensive enforcement of a plaintiff’s claim against a defendant to which there is clearly no valid defence-----’’

 

[9]    Furthermore, in the case of Supa Swift (Swaziland) (Pty) Ltd V Guard Alert Security Services Ltd Case No. 4328/09, judgment of the 17th of December 2010, (unreported), I highlighted the characteristics of a summary judgment, in the following parlance:-

 

[10]          “A summary judgment is one given in favour of a plaintiff without a plenary trial of the action.  The normal steps of filing all necessary pleading, hearing evidence of witnesses, and addresses by counsel, thereafter, before the court’s judgment are not followed. The procedure by way of summary judgment is resorted to by a plaintiff, where obviously there can be no reasonable doubt that the plaintiff is entitled to judgment and where it is inexpedient to allow the defendant to defend for mere purposes of delay.  It is for the plain and straight forward, not for the devious and crafty.  Rather than suffer unnecessary delay and expense which attend a full trial, a plaintiff may therefore apply to the court for instant judgment, if his claim is manifestly unanswerable both infact and in law.  Provided that the claim falls within the purview of classes of claims envisaged in Rule 32 (2) i.e is either upon a liquid document, for liquidated amount in money, for ejectment or for delivery of specified movable property.

 

[11]          Summary judgment therefore by its characteristic features, shuts the door of justice in the face of a defendant who may otherwise have a triable defence.  Thus, the wise caution which has been sounded in the ears of the courts over the decades, to approach this application with the greatest of trepidation.  This is to prevent foreclosing a defendant who may otherwise have a triable defence from pleading to the plaintiff’s case’’.

 

[12]  See alsoNational Motor Company Ltd V Moses Dlamini Civil Case 1987 -1995 (4) SCR 124, Mater Dolorosa High School V Ron J Stationery (Pty) Ltd Appeal 3/2005, Musa Magongo V First National Bank (Swaziland) Appeal 38/1999.

 

[13]  It is in honour of the need for caution elucidated ante, that a court seised with a summary judgment application, is enjoined  to scrutinise the affidavit of the defendant resisting the application, to see if same discloses, a bonafide defence or triable issue, pursuant to rule 32 (4).  By that rule, a defendant who wishes to resist summary judgment is required to file an affidavit opposing same.  But the mere filing of an affidavit does not automatically entitle the defendant to defend.  The defendant is required to satisfy the court through his affidavit, that he has a good defence to the action on the merits, by disclosing such facts as may be deemed sufficient to enable him defend generally.

 

[14]  The foregoing responsibility imposed on a defendant resisting summary judgment is clearly spelt out in the dictum of corbett CJ, in the celebrated case of Maharaj  V Barclays Bank Ltd 1976 (1) SA 418 AD 236, which case is generally regarded as the locus classicus  on this question, wherein his Lordship declared as follows:-     

[15]          “Accordingly , one of the ways in which a defendant may successfully oppose a claim for summary judgment is by satisfying the court by affidavit that he has a bonafide defence to  the claim. Where the defence is based upon facts, in the sense that material facts alleged by the plaintiff in his summons, or combined summons, are disputed or new facts are alleged consisting a defence, the  court does not attempt to decide the issues or to determine whether or not there is a balance of probabilities in favour of one party or the other.  All that the court enquires into is (a) whether the defendant has fully disclosed the nature and grounds of his defence and (b) whether on the facts so disclosed the defendant appears to have, as to either the whole or part of the claim, a defence which is both bonafide and good in law.  If satisfied on these matters the court must refuse summary judgment, either wholly or in part, as the case may be’’.

[16]  See Gilinsky and Anor V Superb Launderers and Dry Cleaners (Pty) Ltd 1978 (3) SA 807 ( c ) at 809 -810 National Motor Company Limited V Moses Dlamini (supra)

 

[17]  Now in honour of Rule 32 (4), the defendants filed a 15 paragraphs affidavit resisting this summary judgment application, which is accompanied by several annexures. It now behoves me to consider the allegations set out in the defendants affidavit, to ascertain if they meet the test enunciated ante.  Suffice it to say that I have carefully considered the totality of the case stated in the opposing papers and I am inclined to agree with the plaintiff, that the defence sought to be set up by the defendants, can best be summarised as it is set out in paragraphs 4A to G of the plaintiff’s heads of argument, in the following terms:-

 

A)     That the plaintiff appointed the 1st defendant as a distributor via annexure ZBK 1 attached to  the resisting affidavit, to sell the plaintiffs services, subject to the  signing of the distribution agreement, which agreement the plaintiff stated in ZBK I would be sent out that same week. The plaintiff failed to send the agreements for signature as it had stated in its letter, therefore, the plaintiff delayed commencement of the agreement between the parties and actually occasioned loss for the defendants.

 

B)     That the plaintiff was contractually bound to brand the defendant’s shop and this duty was not carried out timeously by the plaintiff.

C)     That the plaintiff failed to provide stock to be distributed by the defendants.

D)     The plaintiff breached the contract and occasioned financial loss to the Defendants.

E)     That the plaintiff sabotaged the defendants by stopping stock supply, thereby occasioning financial loss to them.

F)     That the defendants should not be charged for using the cell phones, in respect of Claim A, since they were the plaintiff’s distributors.

G)     Defendants deny liability for punitive costs and collection commission.

 

[18]  It is worthy of note that the defendants also raised a counterclaim sounding in damages, to the tune of E2,414,655-00.  I will come to this question in a moment.  I however find it imperative at this juncture, to first deal with the question of bonafide defence which the defendants seek to set up via the opposing papers. The paramount question for determination by the court is whether the defendants have set out issues in their affidavit that would render the granting of summary judgment improper:? I wish to observe straightway here, that a close reading of the Defendants affidavit reveals, that the Defendants do not deny that they entered into the three agreements referred to in the plaintiff’s declaration. 

[19]  In consequence of the foregoing, Mr N V Mabuza for the plaintiff contends, that the defence which the defendants seek to set up via the allegation contained in the opposing papers, runs contrary to the spirit and express terms of the agreements to which the parties are bound, and therefore must be discarded for lack of bona fides.

 

[20]  It was contended replicando for the defendants by Mr S. M. Simelane, that the contract between the parties is embodied in the terms of the letter of acceptance, annexure ZBK1, by the plaintiff, as appears on page 105 of the book of pleadings.  That the plaintiff breached the terms of this letter, as per the subsequent agreements, thus causing the defendants loss and damages, therefore, the defendants must be given an opportunity to ventilate these issues at the trial.

 

[21]  Now, before proceeding any further, and since it is obvious that the  defendants do not deny signing the 3 written agreements referred herein, I am convinced that a restatement of the position of the law, regarding agreements reduced in writing, will help  forster a better understanding of my reasoning, when considering the facts alleged in the defendants opposing affidavit .

 

[22]  It is a trite principle of law, one of hallowed and universal antiquity, respected and honoured in all jurisdictions, that, inter alia, when any contract has been reduced to the form of a document no evidence may be given of such contract.

 

[23   In the case of Busaf (Pty) Limited v Vusi Emmanuel Khumalo t/a Zimeleni Transport, case No. 2839/08, pages 8 and 9, my learned brother Masuku J, aptly captured the foregoing proposition of the law on this subject matter as follows:-   

 

[24]  “In their work entitled The South African Law of Evidence (formerly Hoffman Zeffert),  Lexis Nexis, 2003, the learned authors Zeffert say the following at page 322, regarding the proper position relating to agreements reduced in writing:-

 

[25]  ‘‘ If, however, the parties, decide to embody their final agreement in written form, the execution of the documents deprives all previous statements of their legal effect.  The document becomes conclusive as to the terms of the transaction which it was intended to record.  As the parties previous statements on the subject  can have no legal consequences, they are irrelevant and evidence to prove them is therefore inadmissible ’’.

 

[26]  The principle enunciated above is referred to by the learned authors as the integration rule.

 

[27]  Speaking about it in National Board ( Pretoria) (Pty) Ltd V Estate Swanepoel 1975 (3) SA 16 (A) at 26, Botha JAquoting from the learned author Wigmore,stated as follows:-

 

‘‘  This process of embodying the terms of a jurat act in a single memorial may be termed the integration of the act i.e. its formation from scattered parts into an integral documentary unity.  The practical consequences of this is that its scattered parts, in their former and inchoate shape, do not have any jurat effect; they are replaced by a single embodiment of the act.  In other words:  When a jurat act is embodied in a single memorial, all other utterances of the parties on that topic are legally immaterial for the purpose of determining what are the terms of their act’’.

 

[28]  The import of the foregoing is that because the parties to the agreement, namely, the plaintiff and the Defendant decided to embody all the terms of the agreement in a single memorial, the Defendant may not seek to lead evidence tending to prove anything  contrary to the express terms of the agreement.  To the extent that he seeks to do so, he is totally out of order----“

 

[29]  It cannot therefore be controverted from the totality of the foregoing, that when parties to an agreement decide to embody the terms of  the agreement in a single memorial, that none of the parties may seek to lead evidence tending to prove anything contrary to the express terms of the agreement.

 

[30]  Having established the foregoing, I will now proceed to examine the allegations of fact canvassed by the defendants in their opposing papers, to ascertain if same when juxtaposed with the terms of the agreement signed by the parties, they vindicate Mr Mabuza’s vociferous and strenuous contentions, in this application.

 

[31]  I prefer to approach this exercise from the tangent of the summary of allegations of fact, in terms of paragraphs A to G, which I have hereinbefore set forth.

 

[32]  For ease of convenience in this judgment, I shall deal first with the allegations in relation to Claim B, as are depicted in paragraphs A,B,C,D and E ante, ad seriatim as follows:-

 

A.)    The allegation that the contract between the parties is governed by the letter of acceptance annexure ZBK 1.

 

On this issue the defendants allege that by the letter dated 24th April, 2006, annexure ZBK1, the plaintiff appointed them as connect store for distribution and sale of the plaintiff’s services. That the effective date of the appointment and commencement of business was  the 1st of May 2006.  That the appointment was subject to the signing of a distribution agreement with the plaintiff, which the plaintiff’s indicated would be sent to the defendants within the same week of 24th of April, 2006.  That in response to the appointment to be a distributor and in preparation for a resumption of business, the first defendant bound itself in an oral lease agreement with The Gable (Pty) Ltd, at shop number 23, in respect of which the defendants paid the required deposit and then eventually entered into a formal lease, marked ZBK 2.  That the monthly rentals that was paid in terms of the lease agreement was a sum of E3,500 and escalated by eleven percent (11% ) of E3,500-00 at the commencement of every thirteenth month of the lease period,  That the plaintiff failed to honour its undertaking and duties contained in its letter of appointment, by sending to the defendants the relevant distribution agreements, timeously, causing the defendants to suffer financial loss calculated from the date of appointment, 1st of May, 2006, to the actual date of signature of the distribution agreements and supply of stock (March 2008) a period of 23 months, which is to the tune of E2,070,000-00  That on rentals alone the loss was E98,000-00 over a period of 23 months.  That the average monthly commission earned by the Defendants was E90,000 and if that amount is multiplied by the 23 months of untrading, the total damages are quantified at E2,070,000-00. 

 

It is obvious to me that the defendants alleged bonafide defence is premised on the assumption that the contract between the parties commenced on the 1st of May, 2006, as per ZBK1

 

[33]  In paragraph 6 of the plaintiff’s replying affidavit,  The plaintiff met the foregoing allegation that ZBK 1 is the contract between the parties, in the following words:-

 

[34]          ‘‘ Contents hereof are denied and the Respondent put to proof thereof.  It is stated that the Respondent made application to become a distributor.  A letter was written acknowledging the application and advising that the application had been successful.  The letter is nothing more than an offer to the Respondent to enter into a contract to distribute the Applicants products.  Subsequently a contract was entered into’’.

 

[35]  The foregoing facts throw up the natural legal question as to which of the annexures herein, ZBK1, ZBK3 or ZBK4 created a binding contract between the parties as per claim B, and what is the effective date of the said agreements.  I am of the considered view that therein lies the answer to the defendants cries, that the plaintiff breached the terms of the contract,  

 

[36]  I have decided to settle this legal question thrown up.  This is because I consider it a crisp legal point in the circumstances, that can be disposed of in this summary judgment application.  In choosing to embark on this exercise, I am guided by the pronouncement of Kennemeyer J, in Lovemore V White 1978 (3) 260-61, wherein he declared as follows:-

 

“Obviously, if there is a factual dispute or if a triable and arguable issue has been raised as a defence, summary judgment should not be granted. However when the defence involves a legal point which is argued on behalf of both parties when the application is heard, I can see no reason why summary judgment should be refused because the legal point in issue is a difficult one.  The point has to be determined at some time and the judge who hears it at the end of the trial or on an exception to the plea is in no better position to determine the issue than is the judge who hears the application for summary judgement itself …. “Where the case can be decided on a crisp…… law point” there is no reason at all why the point should not be determined in an application for summary judgment”  

 

 [37]Since the defendants insist both in their heads of argument  and oral submission in court, that annexure ZB K1 constitutes an acceptance by the plaintiff, thus a binding contract between the parties, a starting point to my mind will be to visit that document, annexure ZBK 1, which the defendants allege is the contract between the parties.  That document appears on page 105 of the book of pleadings.  For avoidance of doubts in this judgment, and for ease of clarity, I find it expedient to reproduce, in extensor, the contents of that document and it states as follows:-

                                                                                MTN

24TH April 2005

 

The Managing Director

ZBK

P. O. Box A26

Swazi Plaza

Mbabane

 

Dear Mr Dlamini

 

RE:  APPOINTMENT AS A CONNECT STORE FOR SWAZI MTN PREPAID PRODUCTS

 

Following your application to become a connect store of Swazi MTN prepaid products, I am pleased to advise you that your application has been successful and you are appointed to be an authorized connect store with effect from 1st May 2006, on condition that you sign the relevant distribution agreements with Swazi MTN.

 

The distribution agreements will be forwarded to you for scrutiny and signature within this week.  Should you have any queries, please do not hesitate to contact your channel account manager or myself.

 

I look forward to a good and profitable partnership in business.

 

 

Sincerely

 

Linda Nxumalo                ’’

Distribution Manager

 

[38]  It is common cause that ZBK1 was written on the 24th of April 2006, and not 24th of April 2005, as appears therein.  There is no doubt from the language of ZBK1, that the 1st defendant was appointed an authorized connect store with effect from 1st May 2006.  However, it is also obvious that the said appointment was conditioned upon the signing of the relevant distribution agreements with the plaintiff, which agreements it was indicated would be sent to the defendants within the same week of the letter ZBK 1, for their scrutiny and signature.  There is no doubt that in legal analysis a contract comes into being when one party accepts an offer made by the other, or when one party makes up all that was lacking for agreement to be complete by responding in a way that the law recognises to be effective. See Mabuza Masina Property consultants (Pty) Ltd v The Hub (Pty Ltd civil case No. 2781/10. See also The Principle of the Law of contract, Sixth edition Al Kerr pages 61 to 116.  However, the foregoing legal analysis is hardly attributable to ZBK1. I say this because, ZBKI was conditioned upon the signing of the distribution agreements between the parties and cannot therefore in that event be construed as the agreement in itself, contrary to the defendants contentions. In as much ZBK 1 is a letter appointing the defendants as distributors for the plaintiff, it cannot on its own stand as an  acceptance of the offer made to the plaintiff by the defendants, thus a binding contract, since a prerequisite of the appointment was the signing of the distribution agreements. There is also no evidence whatsoever that the plaintiff in the wake of ZBK1, conducted itself in such a manner as to suggest the coming into force of the said contract. In fact it is the reason of the plaintiff’s lack of action in the wake of ZBK1, that has elicited the cries of the defendants in this application. I therefore hold the view, that no valid contract was created between the parties until the signing of the said agreements in May 2008.  I am firmly convinced in the circumstances, that ZBK 1 was not intended as concluding there and then a final contract between the parties, but was merely a step in the transaction between the parties, conditioned upon the taking of other steps, inter alia, signing of the agreements, which if successful, would no doubt lead to a conclusion of a final contract.

 

[39]  I must in the same vein agree with Mr. Mbuza, that since ZBK1 was conditioned on the signing of the Distribution agreements, it is therefore the terms and conditions stipulated in the said agreements which regulate the transaction between the parties.  This is in fact commonsensical, since ZBK1, exhibits no such terms and conditions contrary to the defendants posture. I say this irrespective of the fact that the defendants allege, that the transaction herein was partly oral and partly written.  I hold the view that the oral agreement if any is of no moment to this transaction.  This is due to the fact that paragraph 15.3 of the defendants affidavit demonstrates, that the oral agreement was allegedly entered on the same date as ZBK1, that is the 24th of April 2006, prior to the coming into force of the written distribution agreements.  Suffice it to say that from the totality of the foregoing, the defendants have failed to show that there was a subsequent oral agreement which modified the terms of the written Distribution agreements.  Since the parties decided to embody their previous statements and final agreement in the written Distribution agreements, it is these agreements that bind them, as I have hereinbefore demonstrated with reference to Busaf (Pty) Ltd (Supra

    

[40]  It appears to me therefore, that irrespective of the effective date of  the said appointment as per ZBK1, same is still subject to the signing of the agreements upon which ZBK 1 was conditioned, and I so hold. I hold the same view in relation to the alleged loss suffered by the defendants due to the delay in sending the said agreements vis a vis the time frame stipulated for sending the agreements in ZBK1. Even though the defendants anxiously canvassed this issue, I am firmly convinced that the mere fact that the plaintiff indicated in ZBK1 that the Distribution agreements will be sent to the defendants on the same week of the letter, is of no moment to this whole transaction. I say this because, that time frame to my mind is not a fundamental part of the contract between the parties. The paramount fact to my mind, is that a valid contract was created only upon signing of the Distribution agreements.  I am of the opinion, that it is immaterial, in the circumstances, that the agreements were forwarded to the defendants in 2008 as opposed to the time frame stipulated in ZBK1.  That lapse of time cannot now be advanced as a defence to this claim, because, as I have already held, it does not constitute a fundamental part of the transaction herein.   

 

 

[41]  In the light of the totality of the foregoing, I hold that a valid contract was created between the parties in respect of claim B, upon the signing of the two agreements, the terms of which bind the parties herein.

 

[42]  The two agreements to which ZBK1 was conditioned  are therefore, the subject matter of claim B. These are annexures ZBK 3 and ZBK 4, which appear on pages 131 to 155 of the book of pleadings. What then are the effective dates of these two agreements?  Now on page 135 of ZBK3 which is the contract for the supply of Airtime by plaintiff to the defendants, the parties herein covenanted as follows :-

 

‘‘ Effective date’’   means the 1st of September, 2008, regardless of the date of signing by the parties.’’    

 

Furthermore on page 136, paragraph 4, under the heading ‘‘ DURATION’’, the parties covenanted as follows:-

 

‘‘ This agreement shall come into force on effective date and shall continue to the 31st of December, 2009 ’’.  

 

[43]  The foregoing terms of ZBK3 read together, establish beyond doubt, that the contract evidenced by ZBK3, was to commence on the 1st of September 2008, and terminate on the 31st of December 2009.

 

[44]  The foregoing commencement and termination dates, were replicated in ZBK4, the contract for virtual Airtime, as demonstrated by the terms of that contact as appear in paragraph 2.17, page 152 of the book,  which indicates the effective date as 1st September 2008, regardless of the date the agreement is signed by the parties, as well as page 160 of the book of pleadings, paragraph 11, under the heading commencement and termination, which shows that the contract will terminate on the 31st of December 2009, unless terminated earlier by all of the factors stipulated in that paragraph.     

 

[45]  The position ante, vindicate the cries of Mr. Mabuza for the plaintiff, that the contract between the parties for the supply of Airtime and virtual Airtime, as per ZBK3 and ZBK4, respectively, commenced on the 1st of September 2008, in contradistinction to the defendant’s contention that they commenced on the 1st of May, 2006, pursuant to ZBK1.

 

[46]  It follows therefore, in the circumstances, that any loss the defendants allege to have suffered by reason of any enterprise they may have engaged in, such as the renting of premises at Gables (Pty) Ltd and the rentals paid in respect thereof, purportedly in pursuit of the transaction between the parties, prior to the 1st of September 2008, cannot be attributed to the plaintiff, as such enterprise, was not carried out under the contract. Whatever activities the defendants allegedly engaged in during this period in my view, were engaged in at their own peril. And in any case, it is common cause in this application that the plaintiff, out of its magnanimity and benevolence, and in consideration of the relative young age of the 1st defendant company and its financial situation, assisted the defendants in paying off the rentals, incurred in respect of the said premises. The said rentals in my view, cannot now be advanced as a bonafide defence to the claim herein. Neither can the claims of anticipated commissions for the 23 months, prior to the 1st of September, 2008, avail the defendants.  As the case lies, the totality of the foregoing clearly knocks the bottom off the defence the defendants seek to set up vide ZBK1, as same discloses no bonafides or triable issues and I so hold. 

 

[47]   B.    That the plaintiff was contractually bound to brand the defendant’s shop and this duty was not carried out timeously by the plaintiff.

 

[48]  In honour of this alleged defence, the defendants averred as follows in paragraph 8.1 of their answering affidavit:-

 

‘‘ In terms of the distribution agreement, the first defendant agreed to be a distributor of the plaintiff’s goods and services at 1st defendant’s rented premises at the Gables (Pty) limited at Ezulwini, effective from the 1st May 2006. The plaintiff as mentioned above had a duty to brand the store as soon as it became available.  The plaintiff was notified verbally on the 13th May 2006 to brand the store.  It neglected the performance of its duty to brand the store with its Swazi MTN logos and colours until on or about February 2008, hence the defendants were prevented from setting up and commencing business for a period of twenty three months’’.

 

[49]  Here again, the position of the defendants, ante, runs contrary to the expressed terms of the agreement between the parties.  I say this because in paragraph 23 of ZBK3, under the head MARKS AND LOGOS, the parties agreed as follows:-

 

[50]  ‘‘ The Distributor is hereby authorized to use and display marks, logos whether registered or unregistered, which are proprietary to the operator, during the term of this agreement, solely in accordance with prior written instructions and directions of the operator’’

 

The Distributor ante refers to the defendants and the operator refers to the plaintiff.  

 

[51]  The foregoing term of ZBK3 demonstrates, that the responsibility of branding the defendant’s shop lay squarely on the defendants shoulders, in accordance with prior written instructions and directions of the plaintiff. The allegation here is not that the plaintiff delayed in giving its prior instructions and directions, but that it delayed in branding the shop, which responsibility is clearly not that of plaintiff’s as demonstrated by the agreement itself. It follows therefore, that any loss attributed to delay in respect thereof, cannot therefore be laid at the door step of the plaintiff. And in any event, I have already held in this judgment that the commencement date of the agreement between the parties was 1st of September, 2008, therefore, any allegation of default on the part of the plaintiff prior to that date, is a none starter and I so hold.

 

[52]  C.     That the plaintiff failed to provide stock to be

                distributed by the defendants.

 

[53]  Again the defendants contended this issue premised on the assumption that the agreement between the parties commenced on the 1st of May 2006 as per ZBK1. This assumption is clearly decipherable from the defendants affidavit. I will endeavour to reproduce excerpts of the said affidavit to demonstrate this fact. In paragraph 6.7 the defendants averred as follows:-

 

[54]  ‘‘ The plaintiff failed to honour its undertaking and duties contained in its letter of appointment, that is sending to the defendants the relevant distribution agreements, branding the shop space and did not provide stock to be distributed for purposes of making income’’

 

[55]  Then in paragraph 3.4.2.1, the defendants contend as follows:-

 

‘‘The conduct of the plaintiff of firstly delaying by a period of twenty three months to brand the shop space and to supply the goods and services necessary for the defendant to profitably run its business was totally against the undertaking it made and the spirit of the agreement’’.

 

[56]  It is obvious to me therefore, that the allegation that the plaintiff failed to supply stock related to the period  of 23 months prior to the 1st of September 2008, date of commencement of the agreement.  I have already held in this judgment that any allegation of default on the part of the plaintiff prior to the 1st of September 2008, cannot avail the defendants, for the simple reason that such alleged default happened outside the period of contract between the parties.

 

[57]  Assuming without conceding, that I were to hold that the allegation of failure to supply the said stock, relates to the period of the agreement, then the question is: Have the defendants demonstrated material facts to show that this defence is either bonafide or raises triable issues?   I think not. I say this because in terms of the agreement, it was for the defendants to place orders in writing for the supply of Airtime and virtual Airtime.  This fact is clearly depicted in paragraph 7.1 of ZBK3, on page 138 of the book of pleadings, in the following parlance:-

 

[58]    ‘ 7.1        The Distributor will be obliged to place orders for airtime in writing on an order form acceptable to the operator by facsimile, to a designated fax number to be advised by the operator from time to time, or computer link.  The operator will process such orders as soon as is reasonably practicable after receipt thereof (see Business Rules for more details)’’.

 

[59]  It was therefore incumbent upon the defendants in contending this issue, to place material facts before the court to ascertain for itself, what orders they made for the supply of stock, which the plaintiff failed to honour.  It is not enough for the defendants to allege that the plaintiff failed to supply stock to them, they were required to allege sufficient material particulars in this regard, to enable the court guage the substantiality of the defence they seek to set up.  As the case lies, the allegation in respect of this issue is equivocal. It has failed to descend upon particulars as is recommended by the case of National Motors Ltd V Moses Dlamini (supra), leaving the material facts of the defence in the realm of conjecture and surmise, thereby raising no triable issues.  It is worthy of note that paragraph 5.1 of page 155 of the book of pleadings also places the burden of ordering virtual Airtime, as per ZBK4, on the defendants.  Therefore, the anology ante also applies to that agreement. The court cannot therefore embark on an investigation of any alleged obscurities which enterprise is prohibited by case law.  See the dictum of Megary V.C in, Lady Anne Tennant v Associated News Paper and Another 1979 FS R 298. 

 

D. That the plaintiff breached the contract and occasioned financial loss to the defendants.

 

[60]  The papers demonstrate that the allegation of breach of contract and the alleged consequent loss to defendants, are predicated on the assumption that the contract commenced on 1st of May 2006, per ZBK1.  I have already held this posture of the defendants misconceived. I have also held any allegation of default or loss occasioned during this period not attributable to the plaintiff, as the alleged event did not happen during the period of the contract.  The allegation of default and loss as it relates to the period prior to 1st of September 2008, holds no water in the circumstances.

 

[61]  More to this fact is that I agree entirely with the plaintiff, that by the tenor of the agreement between the parties, the plaintiff was not to be held liable for any loss occasioned by the defendants under the contract. This term of the agreement was expressed in  unequivocal language in paragraphs 21.1 and 21.2 of ZBK3, as appear on page 144 of the book of pleadings, in the following terms:-    

 

[62]  ‘‘ The operator shall not be liable for any loss, claim, action expense, damage or injury suffered or sustained by the Distributor or sub Distributor whatever and howsoever arising pursuant to or as a result of its possession of or onward supply to any Distributor or third party of airtime, whether direct or  indirect, consequential or contingent and whether foreseeable or not, in particular, the operator will not be liable for any financial loss of business, profit saving, revenue or goodwill suffered or sustained by the Distributor or sub Distributor howsoever arising.  The operator shall, however, use its best endeavours to co-operate with the Distributor in defending any such claim where reasonably possible.

 

  • The provision of this clause shall survive any termination of this agreement for any reason’’. (Underline mine)

 

[63]  The foregoing terms, were replicated in paragraph 13.1 of ZBK4, as appears on pages 161 to 162 of the book, as follows:-

 

“13.1        The operator shall not be laible for any loss, claim, action, expense, damage or injury suffered or sustained by the Distributor, whatsoever and howsoever pursuant to entering into this agreement or as a result of its possession of or onward supply to any Distribution outlet, customer or third party of stock whether direct or indirect, consequential or contingent and whether forseable or not. In particular, the operator will not be liable for any   financial loss of business, profit, savings, revenue, damages or goodwill suffered or sustained by the Distributor on account of any delays or failure in performance of the VTU system, and / or network failures including but not limited to any inability to send or delay in delivery of transfer or vending instructions or other related activity on the VTU system or howsoever ansing.

 

13.2         Save to the extent expressly provided in this  Agreement, the operator makes no warranties or representations whatsoever in respect of the stock supplied by the Operator to the Distributor in terms of this Agreement : All other statutory, express, implied or tacit terms and conditions or warranties are excluded”  

 

[64]  It is thus incontrovertible, that Defendants allegations that they must be compensated by the plaintiff for the alleged losses suffered under the agreements, are in the circumstances, unmaintenable, thereby disclosing no bonafides.                      

 

  1. That the plaintiff sabotaged the defendants by stopping stock supply, thereby, occasioning financial loss to them.

 

[65]  I do not wish to embark on any  winding or long drawn out analysis of this issue, for same is but a simple one.  I say so because the express terms of the agreement empowered the plaintiff to discontinue the supply of airtime from time to time.  That term of the agreement encapsulated in paragraph 3.6 of ZBK3, as appears on page 136 of the book, as follows:-

‘‘ 3.6     The operator shall be entitled to discontinue the supply of airtime--- from time to time’’.

 

The parties covenanted and agreed to the foregoing terms, which drew no distinction whatsoever as to the length of time the plaintiff was entitled to discontinue supply of stock, referred, therein.  There is also no indication in the agreement that notice be afforded to the Defendants by the plaintiff, prior to said discontinuance of supply of stock.  This state of affairs in my view render the anxious contentions of the defendants on this issue, that by discontinuing of supply of stock in the month of February 2009, the plaintiff  breached the terms of the agreement and occasioned loss to the defendants,  unmaintenable. Besides as rightly contended by the plaintiff, the claim is for stock actually supplied to and utilized by the defendants, which the defendants do not deny. And in any event, I have already demonstrated herein, that the plaintiff was not to be held liable by any losses allegedly incurred by the defendant’s under the terms of the agreement

 

[66]   In the  final analysis, apart from the separate terms of ZB K3 and ZB K4, which I have enunciated herein, the parties also covenanted that the agreements are a complete, concise and accurate record of the parties’ rights and obligations, and is the entire agreement.  ZB K3 demonstrates this fact in paragraph 24.3 therein, under the head “entire contract” as appears on page 146 of the book, in the following terms:-

 

                “This argreement and the annexures hereto contains all the express provisions agreed on by the parties with regard to the subject matter of the agreement and the parties waive the right to rely on an alleged express or implied provision not contained in the agreement”

 

[67]  ZB K4 pronounces this same condition at paragraph 23 thereof, under the head “Whole Agreement”  as appears on page 165 of the book, as follows:-

 

                “This agreement constitutes the whole agreement between the parties as to the subject matter hereof, and no agreement, representation or warranties between the parties other than those set out herein are binding on the parties”

 

[68]  It appears to me in the light of the totality of the foregoing, that by the defence the defendants seek to set up  in relation to claim B, instant, that they seek in the main, to resile from the expressed terms of ZB K3 and ZB K4 respectively, upon which the claim is predicated. I have already demonstrated in full in this judgment, with reference to the case of Busaf (Pty) Limited (Supra) that the defendants are precluded from doing this, reason being that they are bound by the said agreements, in terms thereof.  That being the case, the law prohibits that the defendants be allowed to lead evidence outside the expressed terms of the agreement. I have demonstrated it in full in this judgment, that the allegations of fact which the defendants advance as a defence herein, are in contradistinction  to the expressed terms of ZB K3 and ZB K4 respectively, thereby disclosing no bonafides or triable issues. For the court to refuse summary judgment on these premises, and allow the defendants to proceed to trial to tout the same defence, is tantamount to a waste of time and an exercise in frivolity This is because any evidence in proof of these allegations of fact which clearly contradict the express terms of the agreement between the parties, is by law inadmissible.  

 

[69]  Now, we turn to the counter claim.  There is no doubt as rightly contended by the defendants, that generally, a counter claim will operate  as a bonafide defence to a summary judgment application, more especially where the amount of the counter claim, is more than the amount of the claim in convention, as is  the position in this case.

 

[70]  This position of the law was aptly captured by the learned author’s  Van Niekerk et al, in the Text summary judgment  A Practical Guide, Butterworths, 1998, at paragraph 9.5.7, in the following words:-

 

                “An unliquidated counter claim does constitute a bonafide defence to the plaintiff’s liquidated claim. A defendant may, accordingly, rely on an unliquidated counter claim to avoid summary judgment even when he admits owing a liquidated amount in money to the plaintiff.

 

There is no requirement that the counter claim should depend upon the same facts as those upon which the plaintiff’s claim is based.  Any unliquidated counter claim, even when it depends upon facts and circumstances differing entirely from those forming the basis of the plaintiff’s claim, may be advanced by a defendant and in law constitutes a bona fide defence in summary judgment proceedings”

[71]  Furthermore, at same paragraph 9.5.7 Niekerk et al (supra) continued as follows:-

 

“The principle that an unliquidated counter claim may be advanced against a liquidated claim is, in turn, based on the underlying principle attendant upon reconventional claims, namely that a defendant having a claim against a plaintiff is entitled to request that judgment in favour of the plaintiff be suspended until such time as the court has adjudicated upon the  counterclaim.  This procedural remedy enables the claim in convention and the claim in reconvention to be set off against each other”

 

[72]  Also in Abbot & another v Nolte 1951 (2) SA 419, the court declared thus “A counterclaim which exceeds the amount for which there is an application  for summary judgment is a defence against such claim.” Similarly in the work, The civil practice of the Supreme Court of South Africa 4th ed, page 444, the learned authors Herbstein and Van Winsen, stated thus:-

 

“It is open to the defendant to raise a counterclaim to the plaintiff’s claim. In this case also, sufficient detail must be given of the claim to enable the court to decide whether it is well founded.  The counterclaim may be unliquidated and need not necessarily arise out of the same set of facts as the claim in convention, though it must be of such a nature as to afford a defence to the claim”.

 

[73]  It is obvious from the foregoing, that a counterclaim is a defence to a summary judgment application, especially if same sounds in an amount greater than the amount of the claim in convention.  It is also obvious to me, that the mere allegation by a defendant that he has a counterclaim is not a sine qua non, to a refusal of summary judgment. This is because for the counter claim to quality as the vessel upon which the defendant must proceed to the realm  of trial, it must, in the words of Herbstein et al “ be well founded and must be of such a nature as to afford a defence to the claim” see also Trout v De Toit 1966 (1) SA 69 (0).

 

[74]  The question that naturally arises from the foregoing is: Does the counter claim urged by the defendants herein, exhibit a nature as to afford a defence to the claim? I think not.  I say this because, from the papers serving before me, it is clear that the counter claim is based on the same allegations of fact upon which the defendants contended that they have a bonafide defence to the claim, which are inter alia, set out in paragraphs A to E above.  This is an insuperable obstacle on the path of the defendants to trial. I say so because, I have already adumbrated upon these allegations of fact and have held that they lack in bonafides, as they violate the expressed terms of the agreement between the parties, therefore, any evidence to be lead in proof of them at the stage of trial will violently offend the parole evidence rule and is thus, inadmissible. I am therefore firmly convinced that the said counter claim is of no moment to this summary judgment application, in the circumstances.

 

[75]  In coming to this conclusion, I take my cue from the posturing of Masuku J, in Busaf (Pty) Ltd (Supra).  In that case the court was faced with this self same situation where the defendant sought to set up a counter claim, founded on facts au contraire the terms of the agreement between the parties.  The court declared thus:-

 

“I am of the view that the said counterclaim is not well-founded for the reason that it would seek to abrogate the agreement and do serious damage to the parole evidence rule. The contents of the agreement, ----- stipulate clearly that the plaintiff did not make any representation to the Defendant.  The Defendant also accepted that he had inspected the vehicles and purchased them on an is basis.  This position therefore renders the counter claim bad in law and facts in the affidavit resisting summary judgment therefore not sufficient to defeat the summary judgment application”

 

[76]  I am persuaded by the pronouncement of the court ante. In the same vein I hold, that the counter-claim instant is bad in law and therefore cannot defeat the summary judgment application. 

 

[77]  Now under claim A for the sum of E27,408.89, the defendants contend  that they were not to be charged for using the cell phone, since it was  a business tool used for furthering the business interests of the plaintiff.  

 

[78]  In paragraph 29 of the Replying Affidavit as appears on page 15 of the book, the plaintiff met the foregoing allegation of the defendants as follows:-

 

29.1        The Defendants were given specific Sim Cards and cell phones for use to further the business of the 1st Defendant. Certain conditions are attached to the use of this cell phone. For instance, the defendants were allowed to make calls (cell to-cell) between 07:00 hrs – 17:00 hrs daily, week days, this was to enable the Defendant to call the 1st Defendants clients/ customers and further the business.  It was made categorically clear that calls made to landline or international calls and using the internet would be charged as these were not business motivated calls and would be paid for by the Defendant on demand.  The Honourable Court is respectfully referred to clause 4.1.4 of the agreement.

 

29.2The 2nd Defendant further knows that he was supposed to settle, by cash, all the airtime he consumed, hence  he authored annexure “4” stating the position succinctly.. The contents of annexure “4” are incorporated  herein.

        However, the 2nd Defendant made international calls to South Africa, surfed the internet, called landlines and further made calls after 17:00 hrs to friends and acquaintances. The Honourable Court’s attention is drawn to annexure “3”  (collectively) being a list of the activities of the 2nd Defendant, well outside the time zones referred to.  This will show that the calls for which the defendants are being charged have nothing to do with business but are for the 2nd Defendant’s pleasure”

 

[79]  Now by paragraph 4 of the agreement in respect of claim, A, exhibited herein as annexure I, particularly 4.7.5 to 4.7.6 at  page 189 of the book, the parties covenanted as follows:-

 

4.7.5 Where the subscriber subscribes to the contract with weekend only inclusive minutes, the inclusive minutes may only be utilized on the weekend between midnight on Friday and midnight on Sunday.

4.7.6        Inclusive minutes where they are applicable to a contract, shall be limited to local and mobile to mobile calls, within the Kingdom of Swaziland as well as calls to the value added services to which the subscriber has free subscription, from time to time, international calls, calls made while roaming. and calls to value added services other than those to which the subscriber has free subscription, are specifically excluded ----“

 

[80]  It is indisputable that by the foregoing, the defendants are prohibited from using their inclusive minutes to surf the net, make international calls or call land lines within the kingdom of Swaziland. The excerpt of the call details on the Defendant’s account which appear on pages 51 to 86 of the book of pleadings, shows clearly, inspite of the foregoing,  international calls, calls from mobile  phone to land lines as well as internet surfing. They also show calls made outside the time frame allowed for such calls. I notice that the defendants have not denied making these calls. They have not denied that the call details belongs to their account or that they were excessively billed. All that they allege is that they were not to be billed for the usage of the cell phones. Of course this allegation has no legs to stand upon in the face of the terms of the agreement which show that the inclusive minutes dispensation,  prohibits some of the calls made by the defendants as per the call details, herein.

 

[81]  Infact, I am of the firm conviction, that the defendants fully recognize the fact that they were to pay for these calls, pursuant to the terms of the agreement.  My conviction on this subject matter is informed by the  contents of annexure 4, which appears on page 87 of the book of pleadings.  Annexure 4 demonstrates the following

 

 

20/03/2007

The adm Manager

Swazi MTN

P.O. Box5050

Mbabane

Dear Sir/Madam

 

RE:  WITHHOLD DEBIT TO THE BANK FOR CELL NO 6020212

 

I request that MTN does not process debit order, I will pay by cash so as to avoid a situation where there could be penalties for bounced debit orders.

 

I hope my request will receive your favourable attention,

 

Kind regards,

 

Bongizipho Dlamini

Director  - ZBK Services

It is beyond dispute from  the contents of annexure 4, and as rightly contended by the plaintiff, that the 2nd defendant knew that he was obligated to settle the said Airtime consumed, contrary to his contentions herein.

 

[83]  The defendants have therefore failed to demonstrate any material particulars in their affidavit on this issue  that discloses a bonafide defence or triable issue.

 

[84]  On the question of costs, defendants denied liability for punitive costs and collection commission.

 

[85]  The defendants contended this issue in paragraph 11 of the Answering Affidavit as follows:-

 

        “I deny that the 1st defendant’s liable to pay costs at the punitive scale nor am a liable to pay collection commission; to the plaintiff, even if after trial the defendant’s counterclaim can be dismissed because;

 

  • The plaintiff is not completely blameless in the conduct complained about in the issues in dispute and as such it is not entitled to legal costs at the high scale.
  • Collection commission is paid by a party who instruct attorneys to collect a debt and in this case, even if the alleged debt can be successfully collected, the plaintiff has a duty to pay its attorneys collection commission and not the defendants.  The defendants did not bind themselves to pay collection commission on any of the agreements (ZB K3 and ZB K4”

 

[86]  I must say that the foregoing allegation of the defendants is preposterous        , to say the least, I say this because it is common cause that the 2nd defendant signed an acknowledgement of debt, in favour of the plaintiff.  This document appears on pages 194 to 199 of the record. Now in paragraph 3.2 as appears on pages 195 to 196 of the record, the 2nd defendant warranted as follows:-     

 

[87]          “3.2 any cost incurred by the creditor in the recovery of amounts owing in terms hereof, including but not limited to all legal costs and collection commission shall be borne by the Debtor.

 

It is agreed that the Debtor shall be liable to legal costs at the attorneys own client scale”

 

[88]  By reason of the foregoing, the defendants are estopped from seeking to resile from their express obligation under the acknowledgement of debt.

 

 [89]In casu, there is no doubt that this entire claim is founded on a liquid document and liquidated demand in money. The defendants have not denied signing the agreements, annexures I, ZBK3 and ZBK4, respectively.  They have not denied the stock supplied to them subject matter of claim B. They did not deny using the cell phones or airtime, they did not deny the alleged amount owing on ZB K3 and ZB K4, as per claim B.  I have already held the defence they seek to set up in respect of claim A, a non issue.  The defendants did not deny that the bills were sent to them by the plaintiff. They did not deny that they did not raise any queries within 30 days of the bills, as stipulated in the agreements.  They did not deny sending the bounced cheques, to be seen on page 35 of the book,  in a bid to settle the debt owing on these transactions. They did not deny signing the acknowledgement of debt evidenced by annexure 3 wherein,

 

  1. They acknowledged their indebtedness to the plaintiff.
  2. The 2nd defendant bound himself personally liable for the debt.
  3. They waived their right to defend legal proceedings that may be instituted by plaintiff in ensuring due performance of the contract.
  4. They undertook to liquidate the debt by paying E100,000=00 on or before 30th day of June 2009, and thereafter via the instalments stipulated in that document.
  5. They agreed that in default of payment of one of the instalments the plaintiff was, entitled to call up the entire outstanding balance as due and payable.
  6. They agreed to pay collection commission and legal costs on the scale as between attorney and own client. I have hereinbefore discountenanced the defendants counterclaim as bad in law.

 

[90]  As the case lies, I see no obstacle whatsoever standing on the way of the plaintiff and its prayers for summary judgment. On these premises, summary judgment is hereby granted to the plaintiff as follows:-

 

        CLAIM A

 

  1. Payment of the sum of E27,408-89 (Twenty Seven Thousand Four Hundred and Eighty Emalangeni Eighty Nine Cents)
  2. Interest thereon at the rate of 9 % per annum a tempora morae,
  3. Collection Commission,
  4. Costs of suit at attorney and client scale.

                  

    CLAIM B

 

  1. Payment of the sum of E1,025,839.11 (One Million and Twenty Five Thousand Eight Hundred and Thirty Nine Emalangeni Eleven Cents)
  2. Interest thereon at the rate of 9 % per annum a tempora morae.
  3. Collection Commission.
  4. Costs of suit at attorney and client scale.

 

DELIVERED IN OPEN COURT IN MBABANE ON THIS THE…………………….DAY OF ……………………2011

 

 

 

OTA J.

JUDGE OF THE HIGH COURT