Court name
High Court
Case name
GQI Energy (Pty) Ltd v Mendonca and Another
Media neutral citation
[2011] NAHC 341
Judge
Corbett AJ



















NOT
REPORTABLE





CASE
NO. I 2465/2011





IN
THE HIGH COURT OF NAMIBIA





In
the matter between:






















GQI
ENERGY (PTY) LTD



APPLICANT/PLAINTIFF




















and







ANTONIO EUZEBIO MENDONCA
…..................1st
RESPONDENT/2ndDEFENDANT







AUTOGAS NAMIBIA (PTY) LTD
…....................
2nd
RESPONDENT/2ndDEFENDANT



CORAM: CORBETT, A.J



Heard on: 25 October 2011



Delivered on: 7 November 2011



______________________________________________________________



















JUDGMENT







CORBETT, A.J: .







[1] This is an application for summary
judgment in terms of Rule 32 of the Rules of the High Court brought
against the defendants. For the sake of convenience, I shall refer to
the applicant as “plaintiff” and the first and second
respondents as the “first defendant” and the “second
defendant”.







[2] In the summons the plaintiff
claims re-payment of an amount of N$2,6 million which it paid to the
first defendant in respect of the purchase by the plaintiff of a 51%
shareholding in the second defendant. In terms of the memorandum of
agreement for the sale of shares signed by the plaintiff and the
first defendant, the first defendant was obliged to deliver a
resolution passed by the Directors of the second defendant approving
the transfer of the shares so purchased into the name of the
plaintiff, but the first defendant’s legal practitioners
informed the plaintiff on 11 January 2011 that such resolution could
not be obtained. It is pleaded by the plaintiff that this constituted
a repudiation of the agreement by the first defendant, which
repudiation plaintiff accepted, and as a consequence, the sale of
shares agreement had been cancelled with effect from 31 January 2011.







[3] It is further pleaded by the
plaintiff that during the negotiations for and the signing of the
agreement the first defendant represented to the plaintiff that he
was the sole shareholder and only Director of the second defendant
and the transfer of the 51% shareholding in the second defendant to
the plaintiff was a forgone conclusion and within his control. The
plaintiff pleads that these representations were false, alternatively
were negligently made by the first defendant, in that he did not make
enquiries to establish the true position, which he should have done
in view of the contemplated agreement. The plaintiff alleges that
these representations induced the agreement. A copy of the memorandum
of agreement for the sale of shares is annexed to the summons.







[4] The plaintiff further pleads that
he made payments in the total amount of N$253,968.70 for and on
behalf of and at the request of first defendant during the period 1
September 2010 to 1 February 2011. It is plaintiff’s case that
these payments were made as a consequence of the same false,
alternatively negligent, misrepresentations by the first defendant to
the plaintiff that the plaintiff was a 100% shareholder in the second
defendant and a 100% shareholder and Director of the second defendant
and that the transfer of the shareholding was a forgone conclusion
and within his control. It is pleaded that this amount was repayable
on demand, alternatively on cancellation of the agreement.







[5] The third claim against the first
defendant is based upon the allegation that the plaintiff, again
induced by the aforesaid misrepresentations, lent and advanced the
total amount of N$4,537,691.89 to the second defendant, alternatively
made such payments on its behalf during the period 22 August 2010 to
5 January 2011. The plaintiff claims this amount, less any amount
recovered from second defendant, as damages.







[6] In the alternative to this third
claim, the plaintiff relies upon the condictio indebiti in
claiming repayment of the sum of N$4,537,691.89 from the second
defendant.







THE VERIFYING AFFIDAVIT







[7] Manuel Alexandrino Joao, a
director of the plaintiff, made an affidavit substantially in the
form prescribed by Rule 32 (2) verifying the cause of action. In the
opposing affidavit filed by the first defendant on his own behalf and
also in his capacity as managing director of the second defendant,
the defendants claim that the verifying affidavit filed on behalf of
the plaintiff is defective. The point is taken that the deponent to
the affidavit must swear positively to the facts verifying the cause
of action and the amount claimed, that this had not been done and
accordingly that the application for summary judgment should be
dismissed on this basis alone.







[8] Mr Wylie, who appeared on behalf
of the defendants, submitted that there is no indication in the
affidavit that Manuel Joao could in fact swear positively to the
facts since he was not present when the negotiations took place
between the plaintiff and the first defendant in respect of the sale
of shares in the second defendant. It is true that it must appear
from the verifying affidavit that the deponent has personal
knowledge
1.
However, it is common cause that Manuel Joao is a director of the
plaintiff and thus generally can be assumed to have knowledge of the
plaintiff’s dealings. He in fact says so
2.
The defendants’ argument loses some of its force since no
allegation is made in the opposing affidavit that Manuel Joao was not
present when the negotiations indeed took place. The thrust of the
defendants’ argument is that
ex
facie
the memorandum of
agreement for the sale of shares Mr Riaan Steyn represented the
plaintiff in the signing of the agreement. The fact that Riaan Steyn
signed the agreement, clearly would not preclude Mr Joao from being
involved in the negotiations or indeed being aware of the content of
the negotiations and the representations made.







[9] In regard to the verifying
affidavit the relevant portion of Rule 32 (2) reads that the
plaintiff may deliver notice of the application -







“…accompanied
by
an
affidavit made by himself or herself or by any other person who can
swear positively to the facts verifying the cause of action and the
amount, if any, claimed, and stating that in his or her opinion there
is no
bona
fide
defence
to the action and the action and that notice of intention to defend
has been delivered solely for the purpose of delay …
.







All that is required is that the
plaintiff verifies, not the facts on which the cause of action and
the amount claimed is based, but rather the cause of action and the
amount claimed.
3







[10] Mr Coleman, who appeared on
behalf of the plaintiff, conceded that the deponent does not use the
words “
swear
positively
, but this
is of no import. What the deponent, on behalf of the plaintiff, does
confirm or verify positively is that the first and second defendants
are indebted to the plaintiff in the amounts set out in the summons
and on the basis of the cause of action and on the grounds stated in
the summons. In this sense, I am of the view that the plaintiff has
positively sworn to the facts verifying the cause of action and the
amount claimed.







[11] The plaintiff must also allege
that, in his opinion, no
bona
fide
defence exists 4
and the appearance to defend is
entered solely for the purposes of delay. What is required is that
the deponent expresses his or her own opinion and not that of another
person. This the plaintiff does. The defendants’ contention
that the verifying affidavit does not comply with the Rules, is
accordingly without merit.



















PAYMENT OF THE PURCHASE PRICE
FOR THE SHARES







[12] The first and second defendants
do not deny that the memorandum of agreement for the purchase of
shares was entered into between the plaintiff and the first
defendant. They also do not place in issue that the purchase
consideration in the amount of N$2,6 million was paid by the
plaintiff to the first defendant pursuant to the agreement. What the
first defendant does allege, is that there was a certain
understanding as to how the N$2,6 million would be utilized, namely
in settling certain claims against the second defendant. The first
defendant annexes a resolution of the members of the second defendant
in terms whereof the remaining shareholders were to transfer their
shares in the second defendant to the first defendant.







[13] It is common cause that this
transaction ultimately did not take place. This is why the first
defendant was unable to comply with his obligations in terms of the
purchase of shares agreement entered into with the plaintiff. Having
confirmed this, the first defendant in the opposing affidavit blandly
states:







I
further deny that I and the second defendant entered an appearance to
defend for the purposes of delay.







He goes on to specify that N$2,2
million would be used to pay the second defendant’s
shareholders and the remainder to settle liabilities towards some of
the second defendant’s creditors. The N$2,6 million was held in
Shikongo Law Chambers’ trust account and it is further alleged
that the plaintiff authorized certain payments to be made out of the
trust account amounting to a sum of N$263,794.17. The first defendant
claims that this was done without his or the second defendant’s
consent or knowledge. He further claims that an amount of
N$1,346,250.53 out of the N$2,6 million, was in fact reimbursed to
the plaintiff. He attaches a trust ledger account seeking to
substantiate this latter allegation.







[14] On the basis of the facts set out
in the opposing affidavit and bearing in mind the extraordinary
nature of summary judgment proceedings
5,
I am satisfied that the defendant has established a
bona
fide
defence in respect of
the amounts of N$263,794.17 and N$1,346,250.53. On the other hand, no
defence is established for the balance claimed by plaintiff. In the
circumstances, the plaintiff has established that it is entitled to
the repayment by the first defendant of the amount he paid for the
purchase of the shares in the second defendant, less the amounts
referred to above, which is an amount of N$990,000.04.



THE LIQUIDITY OF THE CLAIMS IN
RESPECT OF MONIES PAID/LENT AND ADVANCED







[15] The plaintiff claims that it paid
an amount of N$253,968.70 for and on behalf and at the request of the
first defendant during the period 1 September 2010 to 1 February
2011. The plaintiff further claims that it lent and advanced the
amount of N$4,537,691.89 to the second defendant, alternatively made
payments on behalf of the second defendant during or about 22 August
2010 to 5 January 2011. The first and second defendants contend that
these amounts are not based on a liquid document, nor are such
amounts liquidated amounts in money, and accordingly the plaintiff is
not entitled to summary judgment in respect thereof.







[16] It is trite that a claim for
monies paid or lent and advanced is generally labled as a claim for a
liquidated amount in money within the ambit of Rule 32 (1) (b). Since
the amount is set out, it is ascertained. The first and second
defendants do not cast doubt on this fact, nor in fact contest this
in the opposing affidavit. They simply resort to a bald denial that
the amount constitutes a liquidated amount in money. This cannot form
a
bona fide
defence to the plaintiff’s
claim.
6







[17] It is inherent in the law and
practice of summary judgment that the merits of a denial is one the
determining factors in deciding on the grant or refusal of an
application for summary judgment. It is incumbent upon the first and
second defendants in their opposing affidavit to advance facts to
show why,
in casu,
the plaintiff’s claim is not capable of easy and prompt
ascertainment.
7
They have not done so. I accordingly
find that there is no merit in the contention that the amounts
claimed under these heads are not in respect of liquidated amounts in
money.







THE DEFENCE OF NO KNOWLEDGE OF
THE PAYMENT







[18] In the opposing affidavit the
first defendant claims that he has no knowledge of the payments made
by the plaintiff in the amount of N$253,968.70. The deponent, on
behalf of the second defendant, further claims that as far as the
amount of N$4,537,691.89 is concerned, he has no knowledge of the
payment of N$522,370.77, of which N$461,185.62 has been repaid by the
second defendant to plaintiff, leaving an outstanding balance of
N$61,185.15. The first defendant does not deny that this latter
amount is owed by the second defendant. The second defendant further
denies knowledge of the payment by the plaintiff of the sum of
N$576,506.74 to Kulani Africa Gas (Pty) Ltd for gas delivered to the
second defendant.







[19] A simple denial in an opposing
affidavit is insufficient to avoid summary judgment.
8
It is important to note that the
defendants do not deny that these amounts were paid, but simply state
that they have no knowledge of any such payments being made by the
plaintiff to it. It is trite that the opposing affidavit need not
focus on each and every aspect of the defence. The defence need not
be presented with the precision of a plea, but the affidavit must at
least disclose the material facts of the defence. The Court is not
obliged to search for a defence between loosely made allegations.
9
The defendant must state his or her
defence unequivocally, or at the very least, a defence must appear
from the contents of the opposing affidavit.
10
The defendant must depose to facts
which, if accepted as the truth or which can be proved at the trial
with admissible evidence, disclose a defence.
11







[20] The defendant must properly
inform the Court of his or her defence. In deposing to the opposing
affidavit the defendant must not be vague or sketchy since these
attributes entitle the Court to form the impression that the
defendant cannot or will not play open cards.
12
It is stated on behalf of the second
defendant that the deponent simply has no knowledge of the payments.
He further says that after the sale of shares agreement was signed he
was no longer the managing director but a business director of the
second defendant and did not deal with financial aspects of the
second defendant. These bland statements simply do not constitute a
defence on the part of the defendants. Should the second defendant
have wished to do so, it should have put an affidavit from someone
with personal knowledge of the financial dealings of the second
defendant who could positively set out the basis of the denial of
indebtedness to the plaintiff. This the second defendant has
demonstrably failed to do.







[21] It was further contended on
behalf of defendants that the plaintiff’s particulars of claim
did not put up sufficient facts to enable the defendants to properly
set out their defence thereto. This contention does not appear in the
opposing affidavit. In the matter of
Diesel
Power Plant Hire CC v Master Diggers (Pty) Ltd, 1992 (2) SA 295 (W)

the defendant raised a similar
argument. Zulman J dealt with this contention as follows:
13







I
am singularly unpersuaded by this argument. It seems to me that the
defendant should certainly be in a position to indicate in his
affidavit what equipment he hired. If he had difficulty of knowing
what equipment the plaintiff was talking about in its summons, one
would have expected the defendant to say as much in his affidavit and
not have to rely upon counsel’s argument to advance such a
proposition. It would have been a simple matter for the defendant,
for example, to have said, if that was the case, that he had hired a
lot of equipment and that he was uncertain what equipment the
plaintiff was referring to, or that he was unable, by reason of not
having records and not having details, to deal with the statements in
the summons. No such allegations were made. The affidavit remains
vague in the extreme. I do not believe that the Rules go so far as to
indicate that it is only in unanswerable cases that summary judgment
is granted. An affidavit, to use the words of Coleman J in
Breytenbach
v Fiat SA (Edms) Bpk, 1976 (2) SA 226 (T), at 231 A

which



‘… lacks
the forthrightness, as well as the particularity, that a candid
disclosure of a defence should embody







is
in my view insufficient to successfully resist the grant of summary
judgment.







[22] In the matter of Nedperm
Bank Ltd v Verbri Projects CC, 1993 (3) SA 214 (W)
the
Court found this argument to be unpersuasive:
14







One
does not lightly wish to condemn a defendant without a trial to pay
such a large sum of money.



It
was urged upon me, indeed correctly so, that there are a number of
cases where Courts have said, in the exercise of discretion, that
they would not grant summary judgment. … I have looked at all
of these cases. They indeed support the proposition of a discretion,
but a discretion exercised in appropriate cases where there is some
factual basis, or belief, set out in the affidavit resisting summary
judgment which will enable a Court to say that something may emerge
at a trial, and there was a reasonable probability of it so emerging,
that the defendant would indeed be able to establish the defences
which it puts up in its affidavit and which at the particular time it
might have difficulty in precisely formulating or in precisely
quantifying because of lack of detailed information. I do not believe
that on a proper analysis of this application, and indeed of the
voluminous affidavits filed by the defendant, that there is an
indication that there is any real prospect of this happening.







The Court accordingly concluded:
15







It
seems to me that this is not a case where one can say, with any
degree of confidence or certainty, that a trial will provide all the
answers to the defendant’s problems or that this is a case
where this Court should exercise a discretion in favour of this
defendant.



I
have considered the remaining matters raised in the affidavits. None
of them seem to me to advance any further possible defences, and
accordingly it seems to me that the defendant has failed to establish
a defence as required in terms of the Rules. It therefore follows
that the plaintiff is entitled to summary judgment as claimed in the
notice of set down.







[23] In
casu
, I have a similar
view. There is no such thing as a plea of no knowledge of the
payments referred to in the plaintiff’s particulars of claim.
This does not amount to a denial of the claim, nor to a
bona
fide
defence in respect of
the plaintiff’s claim. It is true that the Courts have on
occasion taken the view that due to the paucity of information
contained in the plaintiff’s summons, the defendant ought to be
given a further opportunity to fully present its version. This is
particularly so where there has been a complete absence of a recordal
of individual transactions entered into over a period of more than
three years.
16
However, this matter can be
distinguished. The transactions referred to were over a relatively
short period of approximately five months, and in any event, the
first defendant does not state that there was no recordal of the
transactions by him, but rather that he has no knowledge of them,
because he was no longer the managing director of the second
defendant. This statement simply does not pass muster as a defence.







[24] Where the first defendant states
that the recipient of the amount of N$576,506.74 is not disclosed,
this is simply incorrect. In the particulars of claim it is alleged
that the payment was made to Kulani Africa Gas (Pty) Ltd for gas
delivered to the second defendant. The precise dates of payment are
pleaded and accordingly it would be a simple matter of investigation
for the second defendant to verify whether such payments were made or
not.











[25] The same cannot be said about the
amount of N$400,000.00 allegedly paid by the plaintiff as a loan to
the second defendant on 30 September 2008. It is pleaded by the
plaintiff that this amount forms part of the overall amount of
N$4,537,691.89 lent and advanced by the plaintiff to the second
defendant. However, the summons is contradictory in that the
allegation is made by the plaintiff that all such amounts, including
the amount of N$400,000.00 was lent and advanced by the plaintiff to
the second defendant during the period 22 August 2010 to 5 January
2011, i.e. two years after September 2008. On the face of it, the
dates are mutually exclusive and this aspect renders this portion of
the claim excipiable. I accordingly find that
ex
facie
the pleadings the
second defendant might have a defence to this particular portion of
the claim.







[26] It is pleaded by the plaintiff
that on 28 October 2010 an amount of N$3,5 million was paid by the
plaintiff to the Development Bank of Namibia, being re-payment of a
loan owed by the second defendant to the Bank. In this regard, the
first defendant states that he and the plaintiff had agreed that
before the loan was settled with the Bank, he and the plaintiff would
enter into a written agreement concerning the loan, but that this
step was never taken. Although not spelt out in as many words, it
would seem that the first defendant places reliance on the fact that
this transaction was unauthorized by the second defendant. In this
regard, I am persuaded that a possible defence is raised in the
opposing affidavit and that this issue should be referred to trial.







[27] In view of the approach I have
taken, I am satisfied that the plaintiff is entitled to judgment
against the second defendant in the amounts of N$61,185.15 and
N$576,506.74.







[28] In the circumstances, I make the
following order:








  1. Summary judgment is granted against
    the first defendant:










    1. in the amount of N$990,000.04,
      together with interest calculated thereon at the rate of 20% per
      annum, from 1 February 2011 to date of payment;











    1. In the amount of N$253,968.70,
      together with interest calculated thereon at the rate of 20% per
      annum from the date of judgment to the date of payment;










  1. Summary judgment is granted against
    the second defendant in the amount of N$637,691.80, together with
    interest calculated thereon at the rate of 20% per annum from the
    date of judgment to the date of payment.









  1. That the first and second defendants
    be granted leave to defend the balance of the plaintiff’s
    claims.









  1. That the costs of the application for
    summary judgment are to stand over for determination by the trial
    Court












_______________



CORBETT, A.J






ON
BEHALF OF THE PLAINTIFF
: Adv. G Coleman



Instructed by Viljoen &
Associates








ON
BEHALF OF THE DEFENDANTS
: Adv. T Wylie



Instructed by Koep & Partners






1Raphael
& Co. v Standard Produce Co. (Pty) Ltd, 1951(4) SA 244 (CPD) at
245E




2Sand
& Co. Ltd v Kollias, 1962 (2) SA 162 (T). A managing director is
presumed to be familiar with the facts. See Conradie v Landro en Van
der Hoff (Edms) Bpk, 1965 (2) SA 304 (G.W.P.A.), at 308 C - D




3Dowson
v Dobson Industrial Ltd v Van der Werf, 1981 (4) SA 417 (C), at 427
C - G




4Group
Areas Development Board v Hassim, 1964 (2) SA 327 (T), at p. 328 G -
H




5Arend
and Another v Astra Furnshers (Pty) Ltd, 1974(1) SA 298 (C) at 304 F
– H


Gamikaub
(Pty) Ltd v Schweiger, 2008 (2) NR 464 (SC), at 487 I – 488C




6Conradie
case supra, at 308 C - D




7Quality
Machine Builder v M I Thermo–Couples (Pty) Ltd, 1982 (4) SA
591 (W), at 596 A - C




8Mmabatho
Food Corporation v Fourie en Andere, 1985 (1) SA 318 (T), at p. 323
I




9Central
News Agency Ltd v Cilliers, 1971 (4) SA 351 (NC), at 352 in fin
– 353 A




10Premier
Finance Corporation (Pty) Ltd v Rotainers (Pty) Ltd, 1975 (1) SA 79
(W) at 82 C - G




11Estate
Potgieter v Elliott, 1948 (1) SA 1084 (C), at 1087




12Appliance
Higher (Natal) (Pty) Ltd v Natal Fruit Juices (Pty) Ltd, 1974 (2) SA
287 (D), at 290 H – 291 B




13at
298 H – 299 B




14at
224 B - F




15at
226 C - E




16Mahomed
Essop (Pty) Ltd v Sekhukhulu & Son, 1967 (3) SA 728 (D), at 732B
- D