Court name
High Court
Case name
Ritz Reise (Pty) Ltd v Air Namibia (Pty) Ltd
Media neutral citation
[2007] NAHC 15

















SUMMARY






CASE NO. T (I) 3765/2006











RITZ
REISE (PTY) LTD
versus
AIR NAMIBIA (PTY) LTD






HINRICHSEN,
AJ






05 April 2007









PRACTICE -
Summary Judgment - Rule 32 leave to file supplementary affidavit –
applicable test – bona fide defence – Court no discretion in
terms of Rule 32 (7) read with 32 (3) – Court residual discretion –
overriding discretion to refuse summary judgment – counterclaim by
defendant not necessarily good defence per se – meaning of bona
fides within context of summary judgment – possibility of
plaintiff's claim incorrect – Court may, not must
grant summary judgment – probability of fairly triable and arguable
issue – defendant to discharge lighter onus than plaintiff –
reasonable possibility of injustice to defendant















































CASE NO. P (I)
3765/2006






IN
THE HIGH COURT OF NAMIBIA











IN
THE MATTER BETWEEN:





RITZ
REISE (PTY) LTD

APPLICANT/PLAINTIFF





and





AIR
NAMIBIA (PTY) LTD

RESPONDENT/DEFENDANT










Heard on: 03 April 2007






Delivered: 05
April 2007








JUDGMENT:





HINRICHSEN,
A J





[1] In this matter the
Applicant seeks summary judgment as prayed for by it as Plaintiff in
the main action. The Applicant via its representative one Fanus
Oosthuizen, its Managing Director relies on the mandatory grounds in
compliance with Rule 32 (2) namely that the Respondent/Defendant has
no bona fide defence and that its notice of intention to
defend has been delivered solely for the purpose of delay.






[2] The
Respondent denies this and advances reasons therefor in the Opposing
Affidavit of its representative one Franchia Menjono, the Manager
Revenue and Accounting of the Respondent.






[3] On
the 2
nd
April 2007 the Respondent filed a Supplementary Affidavit "to
provide some support for the allegation made in paragraph 6 of its



2






Opposing
Affidavit wherein it is alleged that "….. large amounts of
United Stated Dollars were illegally transferred to banking accounts
in Japan where the Respondent does not have accounts."






[4] Mr
Boesak for the Respondent sought leave for having filed a
Supplementary Affidavit, which was likewise deposed to by Franchia
Menjono.





[5] Mr
Heathcote appearing for the Applicant opposed the application for
leave to file the Supplementary Affidavit. He referred the Court to
the case of the Standard Bank of South Africa Limited vs Sewpersadh
and Another 2005 (4) SA 148 (CPD). This case deals with the practice
of filing Affidavits. It relates to an insolvency matter. Mr
Heathcote also cited the cases of Sealed Africa (Pty)( Ltd vs Kelly
and Another 2006 (3) SA 65 (WLD). This case deals with the filing of
further Affidavits after the Replying Affidavit as being in the
discretion of the Court. In that matter the Applicant instituted a
claim by way of motion proceedings, the cause of action being founded
upon a loan agreement. Finally Mr Heathcote cited the Namibia case
of Piechaczek v. Piechaczek 1921 (SWA) 51. This case illustrates the
procedure but does not carry the matter further for present purposes.





[6] In
the light of these cases, Mr Heathcote urged this Court not to grant
leave for the filing of the Respondent's Supplementary Affidavit.



3






[7] Mr Boesak referred to
the case of Juntgen t.a. Paul Juntgen Real Estate vs v Nottbusch
1989 (4) SA 490. This case deals directly with the issue of allowing
additional Affidavits in opposition to an application for Summary
Judgment. At page 491 F Flemming J had this to say:-






"generally a Court
has a discretion which is inherent to the just performance of its
decision reaching process to grant that relief which is necessary to
enable a party to make a full representation of his true case.
Amplification and rectification should be equally accessible in
Summary Judgment proceedings. If not, the reason cannot be found in
any expressed provision. It must follow from the nature and purpose
of Summary Judgment proceedings."






And
on page 493 C - D Flemming J states.






"It
follows that, because of the scrutiny of the
bona
fide
s of the Defendant in
respect of the defence to which he lays claim a Defendant may find
that his Affidavit is inadequate. He may have forgotten to tell his
attorney of an important fact or may have missed the significance
thereof. Attorneys, like other humans, make errors which are called
omissions. The attorneys view on what is adequate may differ from
what counsel or the Court thinks. A defence may develop subsequent
to the signing of the affidavit. It has all the potential to cause
injustice if the Court's discretion to allow improvement of defective
attempts is to be hampered by an application of the
dictum
in the Joubert
case in any literal meaning thereof."






(The
Joubert case is Joubert, Owens, van Niekerk Inc. v. Breytenbach 1986
(2) SA 357 (T). The dictum referred to appears on page 361 C –
E.)





[8] In
the present case the situation is similar. Initially in terms of
paragraph 6 of the Respondent's Opposing Affidavit it was advised not
to



4






reveal certain
preliminary findings at that stage beyond disclosing the information
in relation to United States Dollars illegally transferred to banking
accounts in Japan referred to above. In terms of paragraph 2 of the
Respondent's Supplementary Affidavit the advice to it with reference
to paragraph 6 of the Opposing Affidavit has now changed. The
Respondent's legal practitioner now advises "…..that it may be
prudent to provide some support for the allegation made in paragraph
6 ….."





[9] The
action taken by the Respondent in this matter squarely falls within
the ambit of the dictum of Flemming J in the Juntgen case referred to
above.





[10] This
Court accordingly grants leave to the Respondent and allows the
filing of its Supplementary Affidavit.





[11] The
law and procedure pertaining to Summary Judgment and the test
therefor have been set out and analysed in numerous decided cases and
this need not be repeated here. Mr Heathcote cited the case of Krump
v Rostami 1998 NR 79 (HC) regarding such tests.





[12] The
Respondent's Supplementary Affidavit immediately raises two issues.









5






Firstly, it casts doubt
on the correctness of the amount of USD169801,83 claimed by the
Applicant by raising the suspicion in paragraph 3, 3.4 of the
Supplementary Affidavit that the correct amount may be USD 115178.





Secondly,
and this is suggested by the Respondent in its Heads of Argument page
4, paragraph 5.4 a counterclaim may now have appeared in favour of
the Respondent ……"after proper reconciliation of the
accounts …..":


On
this issue of a counterclaim Mr Heathcote referred the Court to the
case of Soil Fumigation Services Lowveld CC v Chemfit Technical
Products (Pty) Ltd 2004 (6) SA 29 (Supreme Court of Appeal). (the
Soil Fumigation case).





[13] It
was held in the Soil Fumigation case inter alia that "a Court
should be less inclined to exercise its discretion in favour of a
Defendant where the answer to the Plaintiff's claim is raised in the
form of a counterclaim as opposed to a defence to the Plaintiff's
claim in the form of a Plea. Moreover a Court can exercise its
discretion in the Defendant's favour only on the basis of the
material placed before it and not on the basis of mere conjecture or
speculation."





[14] Mr
Heathcote also referred to the dictum of Brandt J A at page 35 D
which reads as follows:-






"The reason why the
remedy of summary judgment is referred to as 'stringent' and
'extraordinary' is because it effectively closes the



6









door
of the Court on the defendant without affording an opportunity to
ventilate the case by way of a trial. When the answer raised in the
opposing affidavit is in the nature of a counter claim instead of a
plea, the position is, however, somewhat different. Even where
summary judgment has been granted for that part of the claim that
would be extinguished by the counterclaim, the defendant can still
pursue the counterclaim by issuing summons in a separate action. Of
course, summary judgment would deprive the defendant of a significant
procedural advantage. But the fact remains that the doors of the
Court are not finally closed."






[15] This
Court does not take issue with the decisions in the Soil Fumigation
case. In fact, the Authors S J van Niekerk, H F Geier and R J
Mundell (the Authors) in their work on Summary Judgment - A Practical
Guide at page 9/36 summarise the Soil Fumigation case inter alia as
follows.



"The Court retains
an overriding discretion to refuse Summary Judgment – not only to
that part of the claim which would be extinguished by the
counterclaim, but also to the balance – this overriding discretion
to refuse Summary Judgment entitles refusal of the Application in its
entirety, even where a defence (i.e. by means of the counterclaim) to
only a part of the claim has been raised.


This
overriding discretion explains the fact that leave to defend the
Plaintiff's entire claim may be granted even if the counterclaim is
less than that of the Plaintiff's claim and even if no payment of the
balance into Court is made."






[16] The
Authors go on to state at page 9 – 37 ISSUE 4 paragraph 9.5.7:-






"A
Defendant, in raising a counterclaim, should provide full
particularity of the material facts upon which it is based. This
means that he must be as comprehensive as when advancing only a
defence. The Court must be placed in a position to be able to
consider not only the nature and grounds of the counterclaim, but
also the magnitude thereof and whether it is advanced
bona
fide
. The necessary
elements of a completed cause of action must be included. The
counterclaim must, moreover, be based on facts and not on mere
conjecture or speculation or on the deponent's belief."







7






And
the Authors cite decided cases in support.






[17] This
Court has difficulty deciding whether or not a counterclaim in this
case is advanced by the Respondent
bona
fide
, because it is made
entirely dependant upon "a proper reconciliation of the accounts
…." (Page 4, paragraph 5.4 Respondent's Heads of Argument).







[18] Bona
fide
s within the context of
Summary Judgment issues and with specific reference to Rule 32(3)(b)
of the Rules of Court is pronounced upon by Coleman J in the matter
of Breytenbach v Fiat S.A. (Edms) Bpk 1976 2 SA 226 TPD at 228 B as
follows:-







"It
cannot, therefore, be given its literal meaning when it requires the
Defendant to satisfy the Court of the
bona
fide
s of his defence. It
will suffice, it seems to me, if the Defendant swears to a defence,
valid in law, in a manner which is not inherently and seriously
unconvincing."






[19] Reverting
to the point raised under Firstly page 4 above, namely, that the
amount claimed by the Applicant could be incorrect it has been held
in the case of the Standard Bank National Industrial Credit
Corporation Limited v Postmasburg Metal and Mining Supplies (Pty) Ltd
1978 (3) SA page 812 (NC) at 816 A that the Court must guard against
granting Summary Judgment for an amount which may be incorrect and,
for that reason not owing by the Defendant. The onus, at the end of
the day, remains on the Plaintiff to prove






9






his
quantum and Summary Judgment proceedings do not shift that onus. (The
Authors page 11 – 35 issue 1.)






[20] Another
issue which the Respondent raises is that of prescription (in terms
of paragraph 4, page 4 of the Respondents Opposing Affidavit.) The
reason which the Respondent advances is that the Applicant's claim in
the main action is based on an agreement between the parties dating
back to 1995. However this defence would again depend upon a
reconciliation of the financial figures involved.





[21] The
Respondent annexed to its Opposing Affidavit as Annexure FN4 a
Statement or Remittance Advice reflecting a total due which
co-incides with the Applicant's claim. It needs to be observed that
Annexure FN4 does not show how the total due is arrived at and is
therefore not a reconciliation in itself.





[22] Annexure
FN5 is a letter by the auditors K P M G Namibia addressed to the
Applicant's directors. This cannot be considered to be clear
support of the Applicant's claim in that the figures referred to
therein are subject to qualification. It is stated in FN5 "since
the Angola operations go back to 1994 it was not possible to obtain
all the detailed information. We were not able to obtain profit /
loss figures for the 1994 to 1997 years." On page 2 of the
letter it is stated that "the principle of this is that all cash
profits would have



9






accumulated
on the account with Air Namibia if no cash were withdrawn from the
operations."


In
a letter by the Applicant to the Respondent, Annexure FN4 (page 40 of
the Record) it is stated inter alia that






"……when Ritz
Reise opened the Air Namibia office in Luanda in 1994 it was just
after the War and the Banking Rules and Procedures were of such
complexity that Air Namibia and Ritz Reise decided to work from one
bank account in the name of Air Namibia so as not to delay any
payments of transfers of monies from Angola to Air Namibia."






The
operation from one bank account at that stage must have made the
supervision of financial transactions complicated and would
constitute an urgent call for reconciliation.





[23] The
Respondent clearly states that FN4 (Record page 42) incorrectly
showed a credit balance amounting to the Applicant's claim. Counsel
for the Respondent submitted in argument that the "mistake"
as he called it was discovered afterwards.





[24] In
the upshot it has become necessary and is in fact a precondition of a
claim settlement between the parties that a proper reconciliation
takes place.





[25] Counsel
on both sides has gone rather deeply into the merits which really
serves to highlight the contradictions flowing from allegations and



10






counter-allegations and
submissions and counter-submissions. This shows how complicated
especially the financial relationship is between the parties.





[26] In
essence the respondent raises three possible defences -


Firstly,
that the sum claimed by the Applicant may be incorrect


Secondly,
that there may be prescription and


Thirdly,
that the respondent may have a counterclaim.


These
possible defences turn on the results of a comprehensive
reconciliation which is still outstanding. In this regard the
applicant alleges that respondent is in breach of an agreement to the
effect that the respondent was obliged to finalise such
reconciliation within one month after 1 August 1995 which the
respondent has not done.








[27] This
Court finds that without the benefit of a reconciliation the possible
defences raised by the respondent fall short of
bona
fide
s in the technical
sense. The Court is therefore not bound to dismiss the summary
judgment application in terms of rule 32 (7) read with 32 (3) which
would exclude its discretion.







[28] However
the Court has a residual discretion to refuse summary judgment. It
may,
not
must,
grant summary judgment. In this matter there are







11






simply far too many loose
ends creating doubts which can only properly be resolved in an
ordinary trial action on the basis of a reconciliation.


The
applicant may not have an unanswerable case.


Applying
the dictum Young J in the matter of Davis vs Terry 1957 (4) 98 (SR)
at 102 F.



"This case is not so
hopeless as to deprive the respondent of its normal right to go to
trial. Moreover in these proceedings the respondent is not required
to plead its case fully and there may be circumstances not yet
disclosed ….”






In
the instant case a proper reconciliation would bring such
circumstances to light.





[29] The
circumstances yield on a balance of probabilities that the respondent
raises a fairly triable and arguable issue, namely that of an overall
reconciliation called for in the light of the complicated situation
prevailing in this case. (see Barclays Bank Ltd vs Smith 1975 (4) 675
per Booysen A.J. at 684 A).





[30] In
having to assess the applicant's case more stringently than the
respondent’s case, the respondent having to discharge a lighter
onus than the applicant leading to doubt as to the unassailability of
the applicant's case the benefit of such doubt operates in favour of
the respondent.









12






[31] Ultimately
there exists in this case the reasonable possibility that the
respondent may suffer an injustice were summary judgment be ordered
against it.





[32] The
all important rendering of a comprehensive reconciliation will settle
the financial issues between the parties. In order to avoid an
injustice the defendants must be given the benefit of such
reconciliation being undertaken. In this regard the plaintiff itself
recognises its importance in its notice of application for Summary
Judgment where in it claims under prayer 3 "….that the
Defendant be ordered to finalise the reconciliation, and present
Plaintiff with the finalised reconciliated statement, and payment in
respect thereof."


This
Court finding that the plaintiff's claim in terms of prayer 1 of the
aforementioned application is open to doubt as to its correctness, it
falls away together with prayer 2 as a basis for claiming Summary
Judgment and the prayer for reconciliation becomes all important; but
which is of course not competent as a basis for Summary Judgment.





[33] As
regards the issue of costs this Court takes into consideration the
fact that at the time of the launching of the summary judgment
application the applicant did not have the benefit of considering the
contents of the supplementary affidavit filed by the respondent and
responding thereto.









13






[34] Considering all the
circumstances the following Order is made:-










  1. The supplementary
    affidavit filed by the respondent is admitted;



  2. The summary judgment
    application is dismissed;



  3. Costs shall be costs in
    the cause.

















__________________________________


HINRICHSEN,
AJ