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REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

CASE NO: 25506/2017

31/10/2017

(1)          NOT REPORTABLE

(2)          NOT OF INTEREST TO OTHER JUDGES

(3)          REVISED

In the matter between

FIRSTRAND BANK LIMITED                                                    Plaintiff

and

ALL SQUARE MEDIA (PTY) LTD                                             First Defendant

MORNE BOTHA                                                                           Second Defendant

HERMANUS JACOBUS VISAGIE                                            Third Defendant

JUDGMENT

MADIMA. AJ

[1]          The plaintiff and the first defendant, the latter duly represented by the second and third defendant, entered into a verbal agreement ("the agreement") in terms of which a Business Current Account (" the account") was opened for the benefit of the first defendant.

[2]           The agreement entitled the first defendant to, inter alia overdraw the account by withdrawing more funds than the credit allowed. The first defendant was similarly obliged to repay the monies so lent and advanced immediately upon demand.

[3]           On 30 January 2013 the first defendant applied for, and was granted by the plaintiff, an overdraft facility in the amount of R50 000.00 to be linked to the account. On 17 December 2013 the first defendant applied for the overdraft facility to be in­ creased to R120 000.00. The plaintiff again obliged. On 27 August 2014 the first defendant again applied for an increase of the overdraft facility to R220 000.00. The first defendant applied again on 4 February 2015 for an increase to R255 556.00.

[4]           The second and third defendants bound themselves, in writing, as surety and co-principal debtors for the payment when due of all present and future debts of the first defendant, to the plaintiff. As at 14 March 2017 the defendants were indebted to the plaintiff in the amount of R284 998.00 together with interest as reflected in the certificate of balance.

[5]          It is common cause that the agreement does not fall within the ambit of the National Credit Act 34 of 2005. The plaintiff has complied with the provisions of s72(1) insofar as it is applicable. The defendants have also not responded to the notices and/or letters of demand.

[6]          The plaintiff has, on two earlier occasions applied for summary judgment against the defendants. The first attempt was on 22 August 2017, then again on 22 September 2017. On both occasions the matter was postponed for reasons that do not take the matter any further. It suffice to state that the defendants were ordered to pay costs on an attorney and client scale and party and party wasted costs on the two occasions respectively.

[7]           The defendants raise, in their affidavit repelling summary judgment, mainly three issues. The first is that the summons was issued prematurely. The second is that the first defendant denies that it is in breach of the terms of the agreement, and thereby not indebted to the plaintiff. Finally the second and third defendants claim that the suretyships have fallen away due to the fact that no surety documents were signed on 4 February 2015.

[8]          The plaintiff denies that the summons was served prematurely. The summons was served on the first defendant on 25 April 2017 and on the second defendant on 28 April 2017, and on 24 June 2017 with respect to third defendant. The defendants submitted that the summons was served ten days earlier. They do not say with respect to which of the defendants this applies. There is therefore no merit in the defendants' assertions that the summons was served earlier than supposed.

[9]          The second issue raised by the defendants is that they deny any indebtedness to the plaintiff, let alone the sum of R284 998.00. It is a trite principle in our law that a certificate of balance constitutes prima facie proof of the amount due by a defendant to a plaintiff. Apart from a bare denial of indebtedness, the defendants offer nothing by way of explanation. This point must also fail.

[10]      The final point raised by the defendants is that the suretyship agreements were signed on 17 December 2013 and the overdraft faculty only on 4 February 2015. This, according to the defendants, makes the suretyship to fall away. The submission does not make much sense. The second and third defendants remain bound by the surety­ ship agreement. They shall remain so bound until formally released. This point too must fail.

[11]          The issue to be determined are, according to the defendants, the following: (a) is the first defendant in mora under the agreement?, (b) has the plaintiff complied with all its obligations under the agreement?, (c) has the plaintiff made out a proper case for summary judgment? And (d) has the defendant set out a bona fide defense to the claim?

[12]          There is little doubt that the defendants are in mora. One need go no further than the certificate of balance. The plaintiff has also performed its obligations to the first defendant by extending credit facilities to the defendants. That too is not in dispute. I have no doubt that the plaintiff has, till this point, made out a proper case for summary judgment. What remains is the question whether the defendants have set out a bona fide defence-in order to repel the application.

The Law

[13]          Rule 32(3)(b) of the Uniform Rules of Court requires that a respondent opposing an application for summary judgment to "satisfy the court by affidavit that he has a bona fide defence to the action. It is a further requirement that the affidavit also disclose fully the nature and grounds of the defence and the material facts relied upon. Corbett JA in Maharaj v Barclays National Bank Ltd 1976 (1) SA 418 (A) stated that " Accordingly, one of the ways in which a defendant may successfully oppose a claim for summary judgment is by satisfying the Court by affidavit that he has a bona fide defence to the claim. Where the defence is based upon facts, in the sense that material facts alleged by the plaintiff in his summons, or combined summons, are disputed or new facts are alleged constituting a defence, the Court does not attempt to decide these issues or to determine whether or not there is a balance of probabilities in favour of the one party or the other. All that the Court enquires into is (a) whether the defendant has fully disclosed the nature and grounds of his defence and the material facts upon which it is founded, and (b) whether on the facts so disclosed the defendant appears to have, as to either the whole or part of the claim, a defence which is both bona fide and good in law. If satisfied on these matters the Court must refuse summary judgment, either wholly or in part, as the case may be. The word fully, as used in the context of the Rule (and its predecessors,) has been the cause of some judicial controversy in the past. It connotes, in my view, that, while the defendant need not deal exhaustively with the facts and the evidence relied upon to substantiate them, he must at least disclose his defence and the material facts upon which it is based with sufficient particularity and completeness to enable the Court to decide whether the affidavit discloses a bona fide defence".

[14]           The defendants submit that the application ought to fail because the summons did not indicate that the first defendant was in default for longer than 20 business days as stipulated in the agreement. The main point is that the summons is premature. I have already dismissed this point as having no merit. The defendants further claim that there was no written notice given by the first defendant as per its own default procedure.

The defendant laments the fact that it was not given any notice of a possible default prior to the letter of demand dated 15 March 2017. The first defendant submits that because of the alleged failure to deliver a notice, this in itself translates into a bona fide defence to the claim. The first defendant denies being in default.

[15]          I was hoping for a more serious and substantial challenge by the first plaintiff to the application for summary judgment. My enquired to the defendants' counsel whether the first defendant owed the plaintiff was met with an incoherent response. I pressed on and counsel eventually conceded that first defendant did.

[16]         The material facts alleged by the plaintiff in the summons are not disputed. What the first defendant is offering are preliminary points that even if I were to grant the defendant leave to defend, would not defeat the claim at trial.

[17]         I have a discretion in terms of Rule 32(5) of the Uniform Rules of Court to grant or refuse summary judgment and grant the defendants leave to defend. I am not per­ suaded that the defendants have set out a bona fide defence in their affidavit. I am further not persuaded that I should refuse summary judgment on the basis of an alleged failure by the plaintiff to give proper notice.

[18]         I am particularly disturbed by the delaying tactics of the first defendant to deny and/or delay the plaintiff justice. The first defendant has to this day not made good its indebtedness to the plaintiff. A defendant who was serious about staving off an application such as this one would have made some good gesture payment to the plaintiff long before this matter came to court.

[19]         Tuchten J, in Standard Bank of SA v Kroonhoek Boerdery CC and 2 Others Case Number 23054/2011 para 18 NGHC stated the following "1 mention in passing that to my mind the conclusion to which I have come eliminates the consequences, which I think will be absurd and inimical to the interests of justice, that unmeritorious defendants found to be so on the merits after a full consideration of the defence raised by those defendants in a procedural framework most advantageous to them, would be entitled to a place on the trial roll in due course to the potential prejudice of other litigants with genuine issues to be tried who are waiting in the queue to be heard . The court in Joob Investments (Pty) Ltd v Stocks Mavundla ZEK Joint Venture 2009 (5) SA 1 (SCA), para 33 said that " Having regards to its purpose and its proper application, summary judgment proceedings only held terrors and are drastic for a defendant who has no defence. Perhaps the time has come to discard these labels and co concentrate rather on the proper application of the Rule, as set out with customary clarity and elegance by Corbett JA in the Maharaj case at 425G-426E "

[20]          I cannot agree more. The first defendant has not been candid with the Court. Relying solely on technical defences against the application for summary judgment proved to be a bad idea.

[21]          In the circumstances I make the following order:

1.           The application for summary judgment succeeds.

2.           The defendants to pay the plaintiff the amount of R284 998.00, jointly and severally, the one paying the others to be absolved.

3.           The defendants to pay interest on the sum of R284 998.00 at the applicable rate, calculated daily and compounded monthly in arrears from 1 March 2017 to date of payment (both days inclusive).

4.           The defendants to pay the plaintiffs costs, on a scale as between attorney and client, jointly and severally, the one paying the others to be absolved.

 

T.S MADIMA

ACTING JUDGE OF THE HIGH COURT

 

On behalf of the Applicant / Plaintiff:                    Adv LA Pretorius

Instructed by:                                                           Vezi & De Beer INC

319 Alpine Way

Lynnwood

Pretoria

Tel: 012 361-2746

 

On behalf of the Respondents / Defendants:         Adv N Gaffoor

Instructed by:                                                         Thomson Wilks INC

23 Impala Road

Chislehurston

Sandton

011 784-8984

Dates of Hearing:                                                  13 October 2017

Date of Judgment:                                                 31 October 2017

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