Inzalo Communications & Event Management (Pty) Ltd v Economic Value Accelerators (Pty) Ltd

• Jurisdiction: South Africa
• Citation: 2008 (6) SA 87 (W)

Inzalo Communications & Event Management (Pty) Ltd v Economic Value Accelerators (Pty) Ltd
2008 (6) SA 87 (W)

2008 (6) SA p87

Citation	2008 (6) SA 87 (W)
Case No	20062/2006
Court	Witwatersrand Local Division
Judge	Symon AJ
Heard	June 22, 2007
Judgment	March 5, 2008
Counsel	Mr JJ Bitter for the excipient (plaintiff).; K Bailey for the respondent (defendant).

Flynote : Sleutelwoorde E

Contract — Remedies on breach — Claim for restitution — Compatibility with claim for enrichment — Defendant in counterclaim to action for repayment F of money alleging that principal claim one for restitution while simultaneously making allegations suggesting that claim one based on enrichment — Allegations of enrichment incompatible with claim for restitution — Counterclaim excipiable.

Headnote : Kopnota

The plaintiff had instituted an action in a local division for payment of an amount G of money representing a monthly retainer fee for the period October 2005 to February 2006 for assisting the defendant with its communications strategy. In its plea the defendant averred that, in breach of material terms of the agreement, the plaintiff had failed to perform the services which it had contracted to perform, whether properly or at all and that it had terminated the agreement. In a counterclaim the defendant repeated the H allegations contained in the plea and averred that, in 'the bona fide, but mistaken belief that the defendant was liable to the plaintiff for the services purportedly rendered by it for the defendant from April 2005 to September 2005, the defendant effected payment to the plaintiff of the aggregate sum of R144 438 to the plaintiff' and that 'arising from the plaintiff's material breach of its obligations under the agreement described above, the defendant I was not liable to pay such amount to the plaintiff, or any amount at all, and is accordingly entitled to repayment of the above sum from the plaintiff'. The plaintiff excepted to the counterclaim on the grounds that it was vague and embarrassing, alternatively that it failed to disclose a cause of action. The defendant failed to remedy the causes of complaint set out in the plaintiff's notice to that effect. The plaintiff's complaints against the J

2008 (6) SA p88

A counterclaim were, first, that the defendant had not alleged that the error had been excusable or even reasonable, which was an essential averment in an action based on the condictio indebiti. Secondly, although it was clear that the condictio indebiti was not available if there was no mistaken belief that the amount paid was owing, the defendant could not, on the facts alleged in the B counterclaim, have believed that the monthly amounts were due when they were paid. Thirdly, the defendant had alleged an ongoing breach of the agreement by the plaintiff, but did not claim damages arising therefrom, and had relied on enrichment, as a separate cause of action, to claim the repayment of the payments made by it to the plaintiff during the alleged ongoing breach. The complaint was that, even if the enrichment had been caused by breach of the agreement, as alleged by the defendant, it could not C be regarded as sine causa while the agreement still continued. Moreover, any such enrichment could not be unjustified because the agreement provided the causa or legal ground for the enrichment, notwithstanding the subsequent termination thereof. Hence, it was contended that the counterclaim disclosed no cause of action. The defendant conceded that, should D the counterclaim be construed as one based on unjust enrichment, the exception should succeed, but contended that the counterclaim was not based on enrichment at all, notwithstanding that it had been specifically alleged in the counterclaim that the payments in issue were made in the bona fide belief that they were owing. The defendant contended that, on a proper construction of the counterclaim, the cause of action alleged therein E was one for 'restitutionary damages' and that the exception should fail as being directed to an irrelevancy, viz the missing elements of an enrichment claim upon which the claim in reconvention was not based.

Held, that the question was not whether the counterclaim as pleaded could in theory support a claim for 'restitutionary damages' (as one of the alternative constructions to the pleading), but rather whether the imperfect allegations F relating to enrichment formed any part of the counterclaim made on any reasonable interpretation thereof, ie either enrichment or restitution. If not, the allegations in respect of which the exception has been taken were on any interpretation of the pleading either unnecessarily burdensome on the papers (and the evidence to be led at trial) or simply insufficient to sustain a claim on any reasonable interpretation thereof. In either such event, they fall to be struck out. (Paragraph [28] at 96F - G.)

G Held, further, that the relevant authorities relating to claims for restitution established not only that such claims could lie in certain circumstances, but also that allegations of enrichment do not form any part thereof and indeed are inimical thereto, and incompatible therewith. (Paragraph [43] at 100I - J.)

H Held, accordingly, that the exception was well taken insofar as it concerned not only the counterclaim based on unjust enrichment, but also insofar as the allegations made related to the alternative interpretation sought to be placed on the counterclaim as lying in restitution. In the latter event, the allegations suggestive of an enrichment claim were not only surplusage thereto, but positively contradict it. (Paragraph [44] at 101A - B.)

I Held, further, that, applying the test applicable to ambiguous pleadings, the allegations as to the making of a bona fide but mistaken error in making the payment did not sustain either cause of action and in consequence rendered the pleadings excipiable. (Paragraph [44] at 101B - C.)

Held, accordingly, that the words '(i)n the bona fide, but mistaken belief that the defendant was liable to the plaintiff for the services purportedly rendered by J it for the defendant from April 2005 to September 2005' in the counterclaim

2008 (6) SA p89

had to be struck out on the basis that they rendered the counterclaim A excipiable as disclosing no cause of action, and had no place in the counterclaim. (Paragraph [45] at 101D - E.)

Cases Considered

Annotations

Reported cases

Absa Bank Ltd v Leech and Others NNO 2001 (4) SA 132 (SCA) ([2001] 4 All SA 55): B dictum in para [8] applied

BK Tooling (Edms) Bpk v Scope Precision Engineering (Edms) Bpk 1979 (1) SA 391 (A): referred to

Baker v Probert 1985 (3) SA 429 (A): dictum at 438 applied

Barclays National Bank Ltd v Thompson 1989 (1) SA 547 (A): dictum at 553F applied C

Callender-Easby and Another v Grahamstown Municipality and Others 1981 (2) SA 810 (E): applied

Dharumpal Transport (Pty) Ltd v Dharumpal 1956 (1) SA 700 (A): dictum at 706 applied

Hamer v Wall 1993 (1) SA 235 (T): referred to

Iscor Pension Fund v Jerling and Others 1978 (3) SA 858 (T): dictum at 861 D applied

Klerck NO v Van Zyl and Maritz NNO and Another and Related Cases 1989 (4) SA 263 (SE): applied

Kudu Granite Operations (Pty) Ltd v Caterna Ltd 2003 (5) SA 193 (SCA) ([2003] 3 All SA 1): dictum in para [15] applied

Main Line Carriers (Pty) Ltd v Jaad Investments CC and Another 1998 (2) SA 468 (C) ([1997] 3 All SA 451): E referred to

Masters v Thain t/a Inhaca Safaris 2000 (1) SA 467 (W) ([1999] 4 All SA 618): considered

McCarthy Retail Ltd v Short Distance Carriers CC 2001 (3) SA 482 (SCA) ([2001] 3 All SA 236): applied

Pretorius v Commercial Union Versekeringsmaatskappy van Suid-Afrika Bpk F 1995 (3) SA 778 (O): applied

Rahim v Minister of Justice 1964 (4) SA 630 (A): dictum at 634A - C applied

Tweedie and Another v Park Travel Agency (Pty) Ltd t/a Park Tours 1998 (4) SA 802 (W): applied.

Case Information

Exception to a counterclaim. The allegations contained in the pleadings G appear from the reasons for judgment.

Mr JJ Bitter for the excipient (plaintiff).

K Bailey for the respondent (defendant).

Cur adv vult. H

Postea (March 5).

Judgment

Symon AJ:

Introduction I

[1] The plaintiff instituted action against the defendant. The latter pleaded to the plaintiff's claim, and delivered a counterclaim. The issue before me is an exception taken by the plaintiff to the defendant's counterclaim, and which is opposed. For ease of reference, the parties are referred to as in the action. J

2008 (6) SA p90

Symon AJ

The pleadings A

[2] The plaintiff claims an amount of R123 519 together with interest thereupon a tempore morae and ancillary relief. In its declaration the plaintiff formulates its cause of action as follows:

3.

During or about April 2005, and at Johannesburg, the plaintiff and B the defendant, duly represented, entered into an oral agreement, in terms of which the plaintiff would assist the defendant with the implementation of its communications strategy ('the agreement').

4.

The material, express alternatively implied, further alternatively tacit terms of the agreement were inter alia as follows:

4.1

The plaintiff would provide public and media relations expertise C to assist the defendant in developing its profile and attracting new business within the defendant's target markets ('the consultancy service').

4.2

The defendant would pay the plaintiff a monthly retainer fee of R20 000, excluding VAT and other sundry expenses, for the consultancy service.

4.3

D The monthly retainer fee was payable in advance upon presentation by the plaintiff of its tax invoice.

4.4

Each party was entitled to cancel the agreement at its election, by giving the other party one month's notice in writing of...