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IN THE HIGH COURT OF SOUTH AFRICA

FREE STATE DIVISION, BLOEMFONTEIN

Case No.: 643/2020

In the matter between:

KISHOOR PITAMBER                                                                      1^st Plaintiff

WILLIAM HENRY BENDER                                                            2^nd Plaintiff

and

JOHANNES STEPHANUS BENDER                                          1^st Defendant

THE STANDARD BANK OF SOUTH AFRICA LIMITED             1^st Defendant

 

HEARD ON: 3 SEPTEMBER 2020

JUDGMENT BY: MATHEBULA, J

DELIVERED ON: The judgment was handed down electronically by circulation to the parties’ legal representatives by email and release to SAFLII on 9 DECEMBER 2020. The date and time for hand-down is deemed to be 9 DECEMBER 2020 at 09:30

 

[1] This is a summary judgement application brought by the plaintiffs and opposed only by the first defendant.

[2] The plaintiffs instituted an action against the first defendant seeking payment in the combined amount of R480 447.70, interest thereon to be calculated at the rate of 7% per annum a tempore morae and costs of suit.  On 13 May 2020 a notice of intention to defend was filed with the Registrar of this court.  A plea was served and filed on 19 June 2020.  In terms of the amendments to Rule 32, the applicants brought this application based on their particulars of claim dated 13 February 2020 and alleging that the first defendant has no bona fide defence to their claim.  On 29 July 2020 the first defendant filed an answering affidavit contending that he has a bona fide defence and that the application is vexatious warranting its dismissal with costs.

[3] Counsel for the plaintiffs argued that only two aspects concern this matter, that being the signature and rectification of the main deed of suretyship as well as prescription.  He submitted that indeed the deed of suretyship was not signed with the full signature on page 67 initialled by the second plaintiff.[1]  In total all seven (7) pages of the document were initialled with the sole intention of identifying the second plaintiff.  He relied extensively on the celebrated work of the authors Forsyth and Pretorius to conclude that the argument advanced on behalf of the defendant has no merit. On the issue pertaining to Prescription he argued that the debt between the second defendant and an entity called Blue Lounge Trading 50 (Pty) Ltd had a thirty (30) years prescription period.  The high point of the argument is that the period of prescription of the debtor shall be thirty (30) years in respect of debt secured by a mortgage bond as stipulated in the Prescription Act and the decided cases.  In this case it was a continuing security bond.  The sureties had declared themselves bound as long as the second defendant has a mortgage bond in his favour.  Given these facts, the defendant did not have a bona fide defence impeding the granting of the order prayed by the plaintiffs.

[4] Counsel for the defendant commenced his submissions by stating that the second defendant who deposed to the founding affidavit had committed perjury. He pointed out that he could not positively swear to the facts because he had resigned as the director of Blue Lounge Trading 50 (Pty) Ltd.  He relied on the Windeed extract annexed to the opposing papers marked annexure “B3”[2].  The argument is that this material defect makes him untrustworthy and unable to verify the facts.  Still on this aspect he referred to the averments made in paragraph 4.1.3.1 of the founding affidavit that during early 2015 Blue Lounge Trading 50 (Pty) Ltd was still making payments on the bond for the housing loan agreement.  However, in paragraph 18.2 of the founding affidavit in support of the Liquidation application it was averred that the company was not meeting its obligations and the plaintiffs paid out of their own sources.  The second main point, he submitted that the case of the plaintiffs was premised on rectification.  As the law stands, the party can only move for summary judgement as the pleadings stand.  Therefore, in the absence of the deed of suretyship being rectified, then it brings the proceedings to an abrupt end.  Thirdly, he raised the issue that the litigation between himself and Standard Bank is still pending.  In essence this matter is brought prematurely against him and the defences raised in casu have also been raised in that matter.  The issue, as argued, is that the papers are not in order and as such the argument on whether there is a defence or not cannot even be entertained.  Fourthly, on the issue of the mortgage bond he submitted that the sureties are not mere sureties but co-principal debtors. Therefore, they stand next to other co-principal debtors whose debt was secured by a bond. Their debt stands individually and separate from a bond.  Importantly that it is not stated anywhere that the prescription period for such a debtor is also thirty (30) years.  For the aforegoing submissions he concluded that the application should be dismissed with punitive costs.

[5] The starting point is Rule 32 which require that the application may only be applied for after the delivery of the plea.  The rule reads as follows:

“(1) The plaintiff may, after the defendant has delivered a plea, apply to court for summary judgment on each of such claims in the summons as is only—

(a) on a liquid document;

(b) for a liquidated amount in money;

(c) for delivery of specified movable property; or

(d) for ejectment;

together with any claim for interest and costs.

(2) (a) Within 15 days after the date of delivery of the plea, the plaintiff shall deliver a notice of application for summary judgment, together with an affidavit made by the plaintiff or by any other person who can swear positively to the facts.

b) The plaintiff shall, in the affidavit referred to in sub-rule (2)(a), verify the cause of action and the amount, if any, claimed, and identify any point of law relied upon and the facts upon which the plaintiff’s claim is based, and explain briefly why the defense as pleaded does not raise any issue for trial.”

The new amended rule, as it is commonly referred to, enable the plaintiff to briefly explain in the founding affidavit why the defendant is not raising triable issue(s).  The enquiry into the defence raised as per this amendment will be more detailed than in the past. 

[6] The defendant placed heavy reliance on the decision of this court in Phofung Project Consulting (Pty) Ltd v Standard Bank of South Africa Ltd.  At paragraph 18 the court said the following:-

“…. The starting point in adjudicating summary judgement applications is the application itself. Once it is found to be defective, then “cadit quaestio”.  Even of the court a quo’s criticism of appellants’ answering affidavit is regard as fair and it is accepted that appellants failed to set up a defence to meet the standard required to successfully resist summary judgement, this is immaterial for the reasons stated by Wallis J in Shackelton Credit Management supra.  Consequently the appeal is bound to succeed……..”[3]

[7] It is a requirement of the rule that a person deposing to an affidavit must swear positively to the facts and the court must be satisfied prima facie that the deponent is such a person.  The person making such a statement must do so beyond mere assertion but fully appreciating the meaning of his words.  The averments must transcend the mere repeating of the words contained in the rule.

[8] In this matter, the second plaintiff avers that he was a shareholder and director of (Blue Lounge Trading 50 Pty Ltd from its inception until its liquidation in 2016. There was an intermission from December 2009 until August 2014 only concerning his directorship.  He goes further and state that during the time of his directorship he acquired personal knowledge of the business dealings and financial standing of the company.  The defendant refers to the Windeed extract that shows the only active director recorded as Sizwe Dlamini.

[9] On the facts, the argument for the defendant cannot be sustained and the document relied upon cannot advance his case. The second defendant averred that he did resign in December 2009 although it is recorded as January 2010.  It will be a tall order to hold him complicit of misleading information where the difference is only one month or at best a matter of few days.  There is no solid evidence to contradict his averment that he was re-elected a director in August 2014.  The argument against his directorship is also selective in that, the defendant does not take issue with annexure “B2” attached to the founding affidavit in the Liquidation Application. This indicate that he remained a shareholder throughout the relevant period. At all times he was associated with the activities of the company.   The only reason it seems, that his name as a director is not recorded can be attributed to poor record keeping by the relevant authority. This brings an end to the argument that the second respondent could not swear positively to the facts verifying the cause of action.  The argument that the application is defective on that ground has no merit. It is also unclear whether the first defendant desire that a credibility finding be made based on the papers.  There is no basis for such a finding.

[10] The defendant would have me to hold that the Deed of Surityship is not susceptible to rectification and the signing thereof does not comply with the formal requirements of the law.  In this instance section 6 of The General law Amendment Act 50 0f 1956 provides that:-

“No contract of suretyship entered into after the commencement of this act, shall be valid, unless the term thereof are embodied in a written document signed by or on behalf of the surety.  Provided that nothing in this section contained shall affect the liability of the signer of an aval under the laws relating to negotiable instruments”

[11] I was not referred to any authorities that the absence of a full signature is not in accordance with the law. There is no requirement that such a signature should be in a particular manner.  In amplification of his argument counsel for the plaintiffs referred to a paragraph on page 69 of Caney’s “The Law of Suretyship”.[4]  The learned author wrote the following:-

“Section 6 requires that the document embodying the contract of suretyship must be signed by or on behalf of the surety.  The word “sign” is derived from the Latin signum, a mark, and it should be interpreted to mean the placing of a mark on a document identifying or representing the person signing.  Thus, “signature” means any mark – whether it be a person’s full name and surname, or his initials and surname, or only his initials, or a mere mark – placed on the contract with the intention to identifying the signatory.  A signature need not be in ink, nor be written in a specific manner or in a specific place.  An agent must indicate that he is signing in a representative capacity in order to escape personal liability on the contract”

It has long been accepted in our courts that these writings have a persuasive value in the adjudication of disputes.  I am persuaded by their exposition of the principles backed by decided cases as discussed in their work.  This defeats the argument on behalf of the first defendant on this point.

[12] More tellingly, the learned authors discussed the right of recourse which they summarised as follows:-

“The surety who has paid the debt of the principal debtor to the creditor has a right of recourse against the debtor; he is entitles to reimbursement by the principal debtor of what he has paid the creditor”[5]

[13] It appears trite that a surety could be regarded as a creditor of the principal debtor when he had paid the creditor.[6]  In Zunga-Elgin Engineering (Pty) Ltd v Jeany Industrial Holdings (Pty) Ltd and two (2) others the court held that the same principle applies to the right of recourse between co-sureties.[7]

[14] The Prescription argument should not detain us for long as it is perfectly plain that it is flawed.  The court in Botha v Standard Bank said the following:-

“Section 11 fixes the period of prescription for a debt secured by mortgage bond at 30 years, and s 12(1) provides that prescription commences running as soon as the debt is due. Thus read, the Act requires a debt to be classified as a debt secured by a bond when it is due — not when the bond is registered — because that is when prescription begins to run. This was also the law applicable in Oliff.”[8]

[15] The main contention is that the debt to Standard Bank prescribed three (3) years after the last instalment payment was made.  In that case the debt of the surety also lapsed by way of prescription.  The main argument is that the plaintiff paid a non-existent debt.  The difficulty is that the surety bond which secured the debt is a continual acknowledgement of debt.  Plainly the sureties lagged along with it.  In short, the first defendant is raising defences that are bad in law which does not constitute a triable issue. Given the aforegoing reasons, the plaintiffs are entitled to the relief prayed in the notice of motion with costs.

[16] I make the following order against the first defendant:-

16.1. FIRST PLAINTIFF:

(a) Payment of the amount of R240 223.85;

(b) Moratory interest on the abovementioned amount calculated at 7% per year a tempore morae;

(c) Costs of suit;

16.2. SECOND PLAINTIFF:

(a) Payment of the amount of R240 223.85;

(b) Moratory interest on the abovementioned amount calculated at 7% per year a tempore morae;

(c) Costs of suit;

 

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M. A. MATHEBULA, J

 

 

On behalf of the applicant: Adv. H. Benade

Instructed by: Symington & De Kok

BLOEMFONTEIN

On behalf of the respondents: Adv. C. Snyman

Instructed by: Neuhoff Attorneys

BLOEMFONTEIN

 

 

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