Soil Fumigation Services Lowveld CC v Chemfit Technical Products (Pty) Ltd

The respondent (plaintiff) sued the appellant (defendant) in the High Court for payment of R1 260 829.18 arising from the sale and delivery of methyl bromide under a written credit agreement. The defendant entered an appearance to defend but did not dispute the plaintiff’s claim or the material allegations. Instead, it opposed summary judgment by relying on a counterclaim for unliquidated damages of at least R590 492.50, allegedly arising from breaches of earlier agreements by the plaintiff, including overcharging, failure to disclose costs, loss of commission, and loss of profit. The High Court granted summary judgment for the full amount. The defendant appealed to the Supreme Court of Appeal.

The appeal was dismissed with costs, and summary judgment for the full amount of the plaintiff’s claim was upheld.

The case clarifies South African law on summary judgment by confirming that an unliquidated counterclaim, even for an amount less than the plaintiff’s claim, can in principle constitute a bona fide defence to that extent. It also affirms that payment into court is not a prerequisite for bona fides and emphasises the strict disclosure requirements of rule 32(3)(b) as well as the limited circumstances in which courts will exercise their discretion to refuse summary judgment.