|
|
[Home]
[Databases]
[WorldLII]
[Search]
[Feedback]
South Africa: Supreme Court of Appeal |
[Database Search] [Name Search] [Recent Decisions] [Noteup] [Help]
84/87 /mb
IN THE SUPREME COURT OF SOUTH AFRICA
(APPELLATÉ DIVISION)
In the matter between:
CHARLES DEETLEFS FIRST APPELLANT
SANDRA DEETLEFS SECOND
APPELLANT
and
VOLKSKAS LIMITED RESPONDENT
CORAM : JANSEN, HOEXTER, MESTADT, KUMLEBEN
JJA et VILJOEN AJA
HEARD : 4 MAY 1988
DELIVERED
: 20 MAY 1988
JUDGMENT
KUMLEBEN JA/
2. KUMLEBEN JA:
The respondent, Volkskas
Limited, instituted action in the Witwatersrand Local Division of the Supreme
Court against six defendants
for payment of the sum of R38 170,75 jointly and
severally. It relied for its cause of action upon a written guarantee signed by
the defendants and incorporated in the particulars of claim. The first and
second appellants, who are husband and wife, featured
as defendants in this
action and gave notice of in-tention to defend. An application for summary
judgment followed but, after appellants
had lodged answering affi-davits setting
out their defence, it was by consent not pursued. In response to a request on
their behalf,
further particulars to the claim were furnished on 6 June 1986
by
respondent/
3. respondent. The appellants failed to plead within the
prescribed period of fourteen "court days", as defined in Rule 1 of the Uniform
Rules of Court, with the result that on 30 June 1986 a notice of bar was served.
In terms of Rule 26 (as it rsad at the relevant
time) they wers obiiged to plead
within three days. Thus appellants had in all some twenty seven days within
which to draft and serve
their plea. None was forthcoming during that period. On
9 July 1986 an attempt was made to serve one on respon-dent's attorneys.
They
refused to accept late service. On 15 July 1986 they enrolled the matter for
judgment by default of plea. This application was,
however, adjourned pending
the outcome of an application on the part of ap-pellants in terms of Rule 27 (3)
for condonation of their
failure/
4. failure to plead timeously and for an extension of the
period
within which to do so. This application came
before Leveson J who refused the
condonation sought and
dismissed the application with costs. Default
judgment
followed as a matter of course. Leave to appeal against
both orders was
refused but was subsequently granted by
this Court. The issue before us is
whether the decision
refusing the application for condonation ought to
be
reversed.
The two essential requirements to es-
tablish "good cause", which in terms
of Rule 27 (3)
must be shown before condonation will be granted, are
an
explanation for the failure to plead timeously and, on
the merits, the
prospects of a successful defence. Though
both/
5.
both requirements are ordinarily to be taken into account,
the
significance of each, considered independently, was
emphasised by Miller JA
in Chetty v Law Society, Transvaal
1985 (2) S.A. at 756 (A) 765 D - E in these terms:
"It is not sufficient if only one cf these two requirements is met; for obvious reasons a party showing no prcspect of success on the merits will fail in an application for rescis-sion of a default juágment against him, no matter how reasonable and convincing the ex-planation of his default. And ordered judi-cial process would be negated if, on the other hand, a party who could offer no explanation of his default other than his disdain of the Rules was nevertheless permitted to have a judgment against him rescinced on the ground that he had reasonable prospects of success on the merits."
Where an explanation is furnished and some prospect of
success on the merits is shown to exist, a court is called
upon/
6.
upon to consider these two requirements conjunctively and
decide whether
they, together with any other relevant con-
siderations, warrant the grant of
this indulgence:
"In deciding whether sufficient cause has been shown, the basic principle is that the Court has a discretion, to be exercised judicially upon a consideration of all the facts, and in essence it is a matter of fairness to both sides. Among the facts usually relevant are the degree of lateness, the explanation there-for, the prospects of success, and the import-ance of the case. Ordinarily these facts are interrelated: they are not individually deci-sive, for that would be a piecemeal approach incompatible with a true discretion, save of course that if there are no prospects of success there would be no point in granting condonation. Any attempt to formulate a rule of thumb would only serve to harden the arteries of what should be a flexible discretion. What is needed is an objective conspectus of all the facts."
per Holmes JA in Melane v Santam Insurance Co. Ltd. 1962
(4) S.A./
7.
(4) S.A. 531 (A) at 532 C - E. Both these decisions,
I should mention, deal with "good cause" and "sufficient
cause" in other
contexts but what is said in them applies
equally to the former term as used
in Rule 27 (3).
Before turning to the allegations in the affi-
davits, it is necessary to revert to the
guarantee, which,
as I have said, was the basis of respondent's cause of
action. It consists of two sheets of paper. The"first
document" is headed
' "VOLKSKAS SEPERK" "WAARBORG DEUR TWEE OF MEER BORGE - ONBEPERK"
and above the Volkskas logotype the reference V22(0) ap-
pears. It is a
standard form agreement with the terms of
the guarantee printed on both
sides. On the front page
at/
8.
at the appropriate place the name of the principal debtor,
KELDRO
MINING (EIENDOMS) BEPERK, ("KELDRO") and the names
of the six guarantors
(defendanrs) have been inserted. On
the reverse side at the foot of the
printed portion two of
the guarantcrs signed. It is common cause that the
first document is, on the face of it, a legal and binding
agreement of suretyship. The "second document" is headed
"BYLAAG TOT V22.(0) WAARBORG DEUR TWEE OF MEER BORGE - ONBEPERK TEN GUNSTE VAN KELDRO MINING (EIENDOMS) BEPERK."
All that appears
on this page of the document, apart from
this heading or inscription, are the
signatures of the
other guarantors, including those of the two
appellants;
the signatures of witnesses with details of their
occupations
and addresses; and the place and date of signing. The
reverse/
9. reverse side is blank. According to this document first
appellant signed it on 13 September 1984, that is, the day after the first
document was sicned, and second appellant on the next day.
Respondent's case
is that both documents form part of one agreement of guarantee. On the face of
it this plainly appears to be the
case. As I have indicated, the names of all
six guarantors appear on the first docu-ment; the second document purports to be
an appendage
to the first and refers to the principal debtor concerned; and ex
facie the second document no other reason for the four signatories having
signed it is evident.
Appellants were in the first place required to explain their failure to plead over the period from 6 June
1986/
10. 1986 to 30 June 1986 and, more particularly, their neglect to
do so after the notice of bar was served on the latter date. To
excuse this
omission first appellant alleges that as a commercial traveller he was for long
periods away frcm home; that "communication
problems" ("kommuni-kasie probleme")
arising from the nature of his work made regular contact with his attorney by
telephone or in
any other manner difficult if not impossible; and that over the
period from 27 June 1986 to 8 July 1986 both he and his wife were
ill and unable
to consult with their attorney on 1 July 1986 as arranged. Second appellant in
her affidavit repeats these allegations
and adds that she does not drive a motor
car.
Without any factual allegations to support what
are/
11.
are no more than general, and essentially inferential, as-sertions such statements are worthless. The appellants fail to disclose the reasons why they could not get in touch with their attorney, why the telephone could not serve as a means of communication, anc, if they were ill and im-mobilised, why the attorney could not have visited them. Moreoever, no details are furnished of the nature of this ailment or of its duration and severity. If the alleged grounds for the failure to plead were genuine,it is hardly con-ceivable that such essential details in support of them would not have been set forth.
Two medical certificates, identical save for the name of the patient, are relied upon by appellants. Each certificate simply states that the patient was examined
on/
12. on 27 June 1986, "is suffering from" some sort of infec-
tion and that they "will be" resuming normal activity
on 8 July 1986.
According to the date appearing at the
top of each certificate both were
written out and issued
on 3 July 1986. That same cay they must have been
handed
to appellants because, as appears from a supporting affi-
davit of
their attorney, the certificates were shown to
him on 8 July 1986. Inasmuch
as the certificates were
issued on that date, it is strange that each should
state
that the patient "is suffering" from the alleged ailment and
"will
be" able to resume normal activity on that date.
If in fact they consulted
the doctor on 27 June 1986
and he had predicted that they would have
reco-
vered by 8 July 1986, one would have expected
this to have been
properly recorded on the certificate. A
possible/
13. possible explanation - a far from satisfactory one - for
the form the certificate takes is that, when the doctor was visited on
8 July
1986 to obtain the certificates, he, acting on their say-so, certified ex
posr facto that for the period between the two dates they had been
incapaci-tated and unable to resume normal activities. These com-ments on
the
certificates are, however, largely by the way. Whatever the doctor intended to
say, since his statement is not on oath, his evidence
is inadmissible and cannot
be relied upon by appellants to advance their case.
Their attorney, as I have said, furnished a sup-porting affidavit. In it he confirms that they were due to consult with him on 1 July 1986 and that they failed to keep this appointment. This takes the matter no further
and/
14. and his statement that on 8 July 1986 they told him that
sickness was the cause of their failure to attend the
consultation is, of
course, hearsay. His affidavit
also lacks detail. He omits to explain how he
reacted
to their failure to consult with him at the time arran-
ged. One
would have expecred some reacticn on his
part having regard to the fact that
notice of bar had
been served on him the previous day. He does not
say
whether he attempted to get in touch with his clients
who were
presumably at home on account of illness and
therefore accessible.
In argument Mr Burger, who with Mr van
Oosten appeared for respondent, pointed out that in
the answering affidavits of appellants in the summary
judgment proceedings they set out their defence in more
than sufficient detail for a plea to have been drafted without
further/
15.
further consultation. Counsel submitted that there was no explanation for their attorney not having made use of those affidavits for that purpose. However, I notice that at the time the answering affidavits in the summary judg-ment proceedings were served on respondent their attor-ney was a Mr Lazzara Leicher whereas the person they con-sulted in connection with the plea was a Mr K R Aitken. In the circumstances, although both gentlemen were members of the same firm of attorneys, the latter may possibly not have been aware of this other source of information. For this reason the failure to make use of the summary judgment affidavits is left out of account.
In the result, although there was a delay in pleading of no more than six days after service of the notice
of/ .....
16.
of bar, I consider their explanations to be wholly unsatis-factory, in
fact tantamount to no explanation at all, and that on this
ground alone the
dismissal of the application was justified. (Cf. P E Bosman Transport Works
Committee and Others v Piet Bosman Transport (Pty) Ltd 1980 (4) S.A. 794 (A)
at 799 D - E.) The Court a quo, I should add, did not find it necessary
to consider the adequacy of the ex-planation. It refused the application on the
ground that
the defence raised was without substance.
As to the merits, according to the affidavit of first appellant, both appellants bought shares in Keldro at the instance of one Smit. The banking account of the company was at that time at the Volkskas branch in Nelspruit. As Smit was employed at the Johannesburg Stock Exchange and
was/
17.
was involved in the affairs of the company, he told them
that a banking
account in the name of Keldro ought to be
opened at the Stock Exchange branch
of respondent. First
appellant's affidavit, in which his defence is set
out,
conrinues:
"5.4 Gemelde SMIT het mettertyd vir my en my
eggenote meegedeel dat ter uitvoering van die ooreenkoms, 'n bankrekening geopen sal word by Volkskas Beperk se Effektebeurs-tak, en dat ek en my eggenote 'n dokument daaromtrent moes gaan teken; welke hy aan ons voorgehou het te doen het met die opening van die rekening aldaar. Nooit het hy met my bespreek dat ek 'n onbeperkte waarborg, of enige waarborg hoegenaamd, ten gunste van EISER of enige iemand, sou moes teken nie en dit is ook nie met my eggenote so bespreek nie. Ek vermeld hier ook meteens en kategories dat Volkskas Beperk dit ook nie so met my gereel het en/ of met my so ooreengekom het nie.
5.5/
18.
5.5 Ek is toe na die EISER se Effektebeurs-tak, en wel na die beampte van laasgenoemde wie se naam deur die gemelde SMIT aan my ver-strek is. Hierdie beampte het 'n vel papier gereed gehad en ek het dit geteken. Ek was by hierdie amptenaar vir ongeveer 'n minuut of twee en daar het geen bespreking plaasge-vind anders dat ek hom meegedeel het dat mnr. SMIT my versoek her om 'n dokumemt oor cie bankrekening te teken nie en dat ek hier is om dit te doen. Soos vermeld, het ek ver-staan dat dit te doen gehad het met die opening van 'n bankrekening." (My underlining.)
and adds:
"Ek vermeld hier kategories dat die eerste twee bladsye van die borgstelling, welke bladsye die gedrukte bladsye is, nie aan my voorgelê is nie en ek het dit ook nie toe gesien nie en sien dit vir die eerste keer toe die dagvaarding aan my beteken word."
The evidence of second appellánt, who, as I have said,
signed the second document the day after her husband (and not
in/
19.
in his presence),is to the same effect:
"6.3 Gedurende September. 1984 het my eggenoot my meegedeel dat die gemelde SMIT hom versoek het om 'n dokument te teken by VOLKSKAS BEPERK se Effektebeurs-tak en dat dit in verband staan met die opening van die bankrekening aldaar. Blykbaar was dit so ooreengekom dat die bankreken-ing verskuif moet word vanaf Nelspruit na Johannesburg. Ek dra kennis daarvan dat my eggenoot na Volkskas Beperk se Effekte-beurs-tak gegaan het om die dokumente met betrekking tot die opening van die rekening aldaar te gaan teken en ek is toe ook op 'n ander geleentheid na die bank. Aan my was die naam van 'n amptenaar van die tak van die bank gemeld by wie ek moes aanmeld. Ek het my by hom aangemeld en daar het 'n enkel vel dokument gereed gelê en ek het dit bloot net geteken." (My underlining.)
They both thus deny that they ever concluded
the alleged agreement of guarantee, or for that matter any
other/
20.
other, in favour of the respondent. In the circum-
stances
one would have expected them to have stated the purpose for which they thought
they were affixing their signatures to the
document. Instead they re-strict
themselves to the enigmatic statements which I have emphasised in the quoted
passages from their
evidence.
What does emerge from their affida-vits is that
the factual basis of their defence is, firstly, that in signing the second
document
they had no intention of concluding a guarantee agreement and,
secondly, that at the time of signature only the second document was
shown to
them (with or without the typed inscription on it at the time).
In/
21. In reply to the first contention, Mr van
der
Westhuizen, the manager of the Stock Exchange
branch of respondent, in an
answering affidavit states
that, according to his information, the first
appellant
was well aware of the fact rhac he had concluded this
suretyship agreement by signing the guaranree. The
deponent substantiates
this admittedly hearsay state-
ment by annexing to his affidavit a copy of
the appli-
cation of Smit and first appellant, as applicants,
for the
liquidation of KELDRO. In those proceedings
Smit had annexed to his affidavit
a copy of an
agreement of sale between Smit, first appellant and a
third party, as sellers, and one Jonker, as purchaser,
to which agreement
KELDRO and another company were also
parties/
22.
parties. The subject matter of the sale was shares
in KELDRO. The significance of the agreement for
present purposes is that
it records that:
"Die verkopers het sekere waarborge aan Volkskas Bank en Satico gelewer vir die terugbetaling van die bedrae aan Vclks-kasbank en Satico verskuldig."
And further that:
"Die Koper sal poog om die Verkopers vry te stel van die borgverpligtinge teenoor Volkskasbank Beperk en Satico."
Smit in his affidavit
implicitly acknowledges the
authenticity of this agreement of sale and first
appel-
lant in his supporting affidavit confirms all the
allegations made by
Smit. Copies of letters annexed
to Smit's affidavit (and of one dated 9
September 1985
addressed to first appellant and furnished in reply
to a/....
23.
to a request for further particulars in the main
action)
confirm the allegation of van der Westhuizen that the guarantee in issue in this
case is the Volks-kas guarantee referred
to in the agreement of sale. In the
absence of any replying affidavib on the part of first appellant explaining, or
even suggesting,
that the agreement of sale has reference to some other
guarantee in favour of respondent, this can be con-clusively accepted. The
inescapable inference, since what is alleged by van der Westhuizen and what is
stated in the agreement is not refuted or explained
in any way, is that first
appellant was well aware of the fact that he was signing the guarantee and
that
his evidence to the contrary is false. Mr Lawrence,
who with Mr Constantaras appeared for the appellants,
drew/
24. drew attention to the fact that respondent did not
furnish an affidavit sworn by the bank official or
officials, who must
have presented - on respondent's
version - the guarantee on each occasion for
signature.
In such manner, counsel submitted, rssconcent cculd,
and
should, have proved that appellants knew they were
signing a guarantee and
that both documents were placed
before them. It is true that (subject to such
person
or persons being indentifiable, available and recollec-
ting what
took place) such evidence would have been
significant. But evidence of this
kind would have
created a dispute of fact and raised an issue of
cre-
dibility. The form of refutation relied upon did not
present any such
problem.
The/
25
The acknowledgment of the guarantee in the agreement of sale is
restricted to first appellant since second appellant was not a party
to the
agree-ment or to the liquidation proceedings. Nevertheless, to my mind, such
acknowledcment also serves to refute her contention
that she was unaware that
she was signing a guarantee. Their defence implies fraud on the part of Smit in
that he told them to go
to the bank to sign the document "in connection with the
banking account" whereas he must have told the bank (since there is no
suggestion
that it was a party to any misrepresentation) that the appellants
would be coming in to sign a guarantee. But if the agreement of
sale proves, as
I hold, that no such misrepresen-
tation/.....
26.
tation was made to first appellant, it is inconceiva-
ble
that Smit would have made second appellant, and not
both of them, the target of his subterfuge. In other
words, he must have
told both that they were to sign a
guarantee. I say this because he
had no assurance that
they would not go together to sign the required
document
at the bank. Moreover he must surely have foreseen the
likelihood that first appellant would have told his
wife the purpose for
which he was required to sign the
document.
The conclusion that both appellants were
aware of the fact that they had
signed the guarantee
clearly has a bearing upon the second factual
issue
to be examined, viz., whether only the second document
was shown to
them. It is inherently unlikely that
the/
27. the bank official or officials concerned, knowing that
the guarantee was to be signed and that none of its
terms appears on the
second document, would not have
placed both documents, in all probability attached
to each other, before the appellants. Had this not
been done, it is as
unlikely that appellanrs would not
have noticed the omission and queried it.
There are
further grounds for rejecting this contention. It is .
to be noted that
their case is not that they were pre-
sented with a document with print or writing on it
which they then signed,
without identifying it or
reading its contents, in the bona fide belief that
it
was an application for the opening of a banking account
or for some
purpose unrelated to their accepting lia-
bility as guarantors. If, as they contend, the
inscription/......
28.
inscription ("Bylaag tot V.22(0) etc") was not on
the
document at the time of signing, it was to all
intents and purposes a blank sheet of paper with pro-
vision for persons
to sign as witnesses. In these
circumstances, unless one concludes that they
signed
with their eyes closed, their assertion that they did
not
appreciate what they were signing cannot be accepted.
This conclusion applies
a fortiori to their alternative
contention, namely, that the
inscription might have
been on the document but they did not see it
when
signing. As has been stressed, there is a conspicuous
failure on
their part to state with any degree of pre-
cision the purpose for which they
thought they
were signing the document. This confirms thé
inference/
29.
inference that their defence of nescience is base-
less.
The prospect of appellants proving their de-fencs in the main
action, if one exists at all, must therefore be minimal.
In the course of the
appeal and in the court. a quo a number of legal arguments were advanced.
All were founded on one or both of the factual premises which have been
considered and
rejected as false. In the circumsrancss the need to discuss and
decide those legari issues falls away.
In the result, quite apart from the
inadequacy of the expianacion for the deiay, I consider that on this ground, the
one relied upon
in the court below, the application
for/
30. for condonation was. correctly refused. (See Glazer
v Glazer N O 1963(4) S.A.694(A) at707E and United
Plant Hire (Pty) Ltd v Hills & Others 1976(1) S.A.
717(A) at 723 H.)
The appeal is dismissed with costs inciudinc
(i) the costs in regard to the dismissal of the appli-
cation for leave to appeal in the court a quo, (ii)
the costs, if any, incurred by respondent in connec-
tion with the petition to this court for leave to
appeal and (iii) the costs of two counsel in this
appeal.
M E KUMLEBEN JUDGE OF APPEAL
JANSEN ) - JA
HOEXTER ) - JA
NESTADT ) - JA -Concur
VILJOEN ) -
AJA
SAFLII:
|
Terms of Use
|
Feedback
URL: http://www.saflii.org/za/cases/ZASCA/1988/52.html
.PDF of original document
.RTF of original document