Mtech SA (Pty) Ltd v Afoodable (Pty) Ltd and Others

The applicant, Mtech SA (Pty) Ltd, manufactures packaging materials and supplied the first respondent, Afoodable (Pty) Ltd, with packaging materials under a specified purchase order. A dispute arose as to whether the supplied packaging was defective. In an attempt to settle, the parties agreed that unused packaging would be returned to the applicant, who would pass a credit note for the returns, with the first respondent paying only for volumes used. A settlement agreement was drafted by the applicant's attorney and signed by the respondents on 30 October 2023. The applicant collected the returned stock on the morning of 31 October 2023. However, the quantity of returned stock exceeded what was anticipated. The respondents then communicated with the applicant's attorney seeking to reconcile the actual volumes returned before becoming bound to the fixed amount in the settlement agreement. The applicant's attorney responded by stating the settlement agreement had been signed and the respondents were bound by its terms. The respondents claimed they had withdrawn their offer before the applicant communicated acceptance of the settlement agreement.

• Whether the respondents' offer in the settlement agreement was validly withdrawn before it was accepted by the applicant
• Whether a valid and enforceable settlement agreement came into existence
• Whether the settlement agreement should be rectified due to a common mistake regarding the amount payable and the verification process for returned stock
• Whether the respondents' defences to the summary judgment application were bona fide or a sham

1. The application for summary judgment is refused. 2. The respondents (the defendants in the action proceedings) are given leave to defend the action. 3. The costs of the application are reserved for decision by the trial court.

In summary judgment proceedings, a respondent is not required to demonstrate that their defences will likely prevail; they need only show that the defences raised are genuine and bona fide. Where the respondent raises factual issues that are only capable of determination through the trial process — such as whether an offer was withdrawn before acceptance and whether a written agreement requires rectification due to common mistake — summary judgment should be refused. If the court has any doubt, summary judgment should not be granted.

The court observed that if the court has some doubt about the merits of the defences raised, it should not grant summary judgment. The court also noted that it is difficult to determine whether defences are a sham when the respondents allege that the applicant deceitfully supplied packaging material that did not meet the specified specifications.

This case reaffirms the well-established principles governing summary judgment in South African civil procedure, particularly the low threshold that a defendant must meet to resist summary judgment. It illustrates that where contractual disputes involve questions of offer and acceptance, withdrawal of offers, and rectification based on common mistake, these are inherently triable factual issues unsuitable for determination on affidavit in summary judgment proceedings. The case also reinforces the principle set out in First National Bank of SA Ltd v Myburgh and Tumileng Trading CC v National Security and Fire that defendants need only establish a bona fide defence and not a probability of success.