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IN THE KWAZULU-NATAL HIGH COURT, DURBAN

REPUBLIC OF SOUTH AFRICA

CASE NO. 10958/10

In the matter between:

OLD MUTUAL LIFE ASSURANCE

COMPANY (SOUTH AFRICA) LIMITED …...........APPLICANT/PLAINTIFF

and

TARE PANDA CC ….............................1^ST RESPONDENT/ DEFENDANT

BOU-KAI HUANG …..............................2^ND RESPONDENT/DEFENDANT

JUDGMENT Delivered on 15 December 2010

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SWAIN J

[1] What I have to decide is whether the defendants have a bona fide defence to the claim of the plaintiff, for summary judgment in the amount of R894,256.95, together with interest and costs.

[2] The cause of action of the plaintiff, verified as it is on oath by one Adrian Raw, is for the payment of arrear rentals owing by the first defendant to the plaintiff, in respect of premises leased by the first defendant from the plaintiff. As a consequence of the first defendant’s breach in failing to pay the rental, the plaintiff cancelled the lease on 17 May 2010, and as a result the first defendant vacated the premises on 19 July 2010. The liability of the second defendant arises from his having bound himself as surety and co-principal debtor, jointly and severally with the first defendant to the plaintiff, for the due and proper fulfilment of all the obligations of the first defendant, arising in terms of the lease.

[3] None of the above is placed in issue by the defendants in their affidavit filed in opposition to the grant of summary judgment. The defence raised by the defendants was the following:

[3.1] After taking occupation, the premises hired were not suitable for the purposes of the first defendant and the kitchen and dining area had to be re-fitted to meet the standards of the Health Inspector. It is alleged that the applicant undertook to attend to the repairs which would have been phased in over a period of time. However, owing to the urgency of taking occupation it was agreed that the first defendant would undertake the renovations at its cost but would “receive a credit in rentals for such costs”. After the renovations had been completed, the second defendant contacted the plaintiff and it was agreed “that the agreement would be rectified to incorporate the terms of the verbal undertaking between the parties”. The deponent alleges that the “first respondent intends issuing summons for the rectification of the lease agreement in so far as may be necessary”.

[3.2] As a consequence of extensive power outages in the area due to load shedding, the first defendant experienced a dramatic drop in patronage and the business of the first defendant suffered. It was consequently agreed that “the first respondent would receive credits and a reduction of rentals” and that “the lease agreement would be rectified to incorporate the verbal undertaking between the parties”. The deponent again alleges that the first respondent “intends to issue summons for the rectification of the lease agreement”.

[4] Before considering the defences raised, it is necessary to consider what are referred to as two “points in limine” by Mr. Ender, who appeared for the defendants.

[5] The first “point in limine” is that the deponent to the affidavit in support of the application for summary judgment, the said Adrian Raw, avers positively that “the respondent” is indebted to the applicant in the amount claimed and on the grounds set forth in the summons. In addition, he states that in his opinion “the respondent” does not have a bona fide defence to the claim.

[6] The application seeks summary judgment against the “respondents/defendants, jointly and severally, the one paying the other to be absolved” which is consistent with the relief sought in the particulars of claim, annexed to the summons, as well as the averment made in the particulars of claim, that the second defendant bound himself as surety and co-principal debtor, jointly and severally liable in solidum, with the first defendant.

[7] The argument advanced by Mr. Ender was that by virtue of the use of the word “respondent” in the supporting affidavit, it was not clear against which of the two defendants the plaintiff sought summary judgment.

[8] In my view the word “respondent” must not be read in isolation, but must be considered in the context of the application for summary judgment to which it is attached, in which summary judgment is expressly sought against “the respondents/defendants jointly and severally”. The affidavit is used in support of such relief and consequently there cannot be any doubt that the reference to a “respondent” in the affidavit is nothing more, nor less than, a typographical error. This does not mean that the Court is entitled to read the papers as saying something which they do not say, but simply that the Court is entitled to accord to the papers a meaning which they plainly have.

[9] The “second point in limine” is that on the papers there is nothing to establish that the said Adrian Raw, has the requisite knowledge of “the inner workings” of the plaintiff and specifically the plaintiff’s cause of action, such that he might be vested with “personal knowledge” of the plaintiff’s claim.

[10] It is apparent however from the lease agreement which is annexed to the particulars of claim and boldly headed “Gateway Theatre of Shopping” that the said Adrian Raw is described as one of the individuals who are authorised to represent Old Mutual Life Assurance (S A) Ltd. (the plaintiff) which is described as the “landlord”. Adrian Raw describes himself in the affidavit as “the Centre Manager for the Gateway Theatre of Shopping”. It is therefore quite clear that he has personal knowledge of the facts, relating as they do, to the alleged breach of a lease agreement by a tenant in the centre.

[11] Returning to the issue of whether the defendants have set out a bona fide defence. In terms of Rule 32, the defendants are required to set out “fully the nature and grounds of the defence and the material facts relied upon therefore”. The affidavit has to disclose “a bona fide defence to the action”.

[12] It is clear that the word “fully” should not be given its literal meaning and require the defendant to set out in the affidavit, full details of all the evidence which he proposes to rely upon in resisting the plaintiff’s claim at the trial.

Breitenbach v Fiat S A (Edms) Bpk

1976 (2) SA 226 (T) at 228 C

No more is required than that the statement of material facts be sufficiently full to persuade the Court that what the defendant has alleged, if it is proved at the trial, will constitute a defence to the plaintiff’s claim.

Shepstone v Shepstone 1974 (2) SA 462 (N) at 466 - 467

If however the defence is averred in a manner which appears in all the circumstances to be needlessly bald, vague or sketchy, that will constitute material for the Court to consider in relation to the requirement of bona fides.

Breitenbach supra at 228 E

[13] The problems which the defendants face in showing that what has been alleged, if proved at the trial, will constitute a defence to the plaintiff’s claim, lie in the provisions of the lease agreement as follows:

[13.1] Clause 22 provides, inter alia, that the lease agreement constitutes the whole agreement between the parties and no warranties or representations, whether express or implied, shall be binding on the parties, other than is recorded in the agreement.

[13.2] Clause 22 also provides that any agreement to vary the agreement shall be in writing and signed by the parties.

[13.3] Clause 16 of the schedule in the lease provides as follows:

“Special Condition – Tenant would be required to re-model the shop-fittings in terms of a shop-fitting proposal approved by the landlord within three months of commencement of this lease”.

Clause 2 also provides that the first defendant undertakes to have completed the shop-fitting of the premises to the satisfaction of the landlord in accordance with the “shop design” annexed to the lease, and to the standard of workmanship and quality of materials and finishes specified in a further annexure.

[13.4] Clause 5.2 provides that the landlord does not warrant that the premises are suitable for the purposes of the tenant, nor that it will be granted any licence, or consent in respect of its business and the premises are let “voet stoots”.

[13.5] Clause 10.1 provides that the landlord is not responsible for loss of any nature, including loss of profits as a result, inter alia, of any “electrical fault “.

[13.6] Clause 14.16 provides that where the nature of the tenant’s business entails cooking on the premises, the tenant “shall retain all equipment in clean and good working order at all times”.

[14] The defendant’s claim that summons will be issued for the “rectification” of the agreement “as may be necessary” to provide for the landlord’s undertaking to pay for the “re-fitting” of the premises to comply with the demands of the Health Inspector and the loss of profits suffered by the defendants due to interruption to the supply of electricity. However, no factual averments are made as to how this is to be achieved in the face of the provisions of the lease to the contrary.

[15] I am accordingly not satisfied that what the defendants have alleged, if proved at trial, will constitute a defence to the plaintiff’s claim.

[16] In addition, the defence of the defendants is set out in a needlessly bald, vague and sketchy manner, such that I am not satisfied as to the bona fides of the defence. I would have expected at the very least details of when, where and with whom, representing the plaintiff, the second defendant concluded the agreements relied upon. In addition, some quantification of the claims to be advanced could be expected, as according to the second defendant, the defendants had to pay for the renovations. The cost to them should be readily available. In addition, the defendants must be able to advance some estimation of the losses suffered by the first defendant, as a consequence of the interruption of the electricity supply. The fact that no details whatsoever are supplied speaks volumes as to the defendant’s absence of bona fides, in setting out the defence.

[17] A further important factor to be considered is that the grant of summary judgment will not prevent the defendants from pursuing their claims against the plaintiff, in a separate action. The fact that the plaintiff allegedly agreed to compensate the defendants by way of credits against rentals to be paid, would obviously not prevent the defendants from instituting action, as this alleged undertaking would relate to the mode of payment and not the underlying obligation to pay. This is obviously appreciated by the defendants, who allege that they will be issuing summons.

Summary judgment is accordingly granted against the defendants jointly and severally, the one paying the other to be absolved, for

a) Payment of the sum of R894,256.95.

b) Interest on the amount of R894,256.95 at the rate of 15.5 percent per annum, calculated from 16 May 2010 to date of the final payment, both days inclusive.

c) Costs of suit on the attorney and own client scale.

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K. Swain J

Appearances: /

Appearances:

For Applicant/Plaintiff : Mr. K. Mackintosh

Instructed by: : Garlicke& Bousefield Inc.

Durban

For 1^st Respondent/Defendant : Mr. G. Ender

Instructed by : Fathima D. Rajah & Co.

Durban

Date of Hearing : 07 December 2010

Date of Filing of Judgment : 15 December 2010

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