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[2021] ZAWCHC 13
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South African Securitisation Programme RF Ltd v Fullimput 11 (Pty) Ltd t/a Barons Place and Another (16569/2019) [2021] ZAWCHC 13 (4 February 2021)
Republic
of South Africa
IN
THE HIGH COURT OF SOUTH AFRICA
WESTERN
CAPE DIVISION, CAPE TOWN
Case
number: 16569/2019
Before:
The Hon. Mr Justice Binns-Ward
Hearing
: 28 January 2021
Judgment:
4 February 2021
In
the matter between:
SOUTH
AFRICAN SECURITISATION PROGRAMME (RF) LTD
Plaintiff
and
FULLIMPUT
11 (PTY) LTD t/a BARONS PLACE
First Defendant
FOURIE,
PIERRE DU
PRE
Second
Defendant
JUDGMENT
(Delivered
by email to the parties’ legal representatives and by release
to SAFLII.
The
judgment shall be deemed to have been handed down at 10h00 on 4
February 2021.)
BINNS-WARD J:
[1]
In this matter the plaintiff has applied
for summary judgment in the
action it instituted against the defendants for performance in terms
of a ‘Master Rental Agreement’
in respect of certain
camera equipment supplied to the first defendant and a related
‘guarantee’ agreement in terms
of which the second
defendant bound himself personally as co-principal debtor with the
first defendant in respect of the latter’s
obligations under
the rental agreement. The application is opposed. It was
brought in terms of the quite recently amended
rule 32, and therefore
after the defendants had already delivered their plea.
[2]
Much of the factual background is uncontentious.
The second
defendant runs a hotel business in Oudtshoorn. The business is
housed in the first defendant company. The
second defendant
determined that the hotel needed an upgraded security camera system.
He consulted with one Michiel Marais
of Canon in that regard and
accepted the product that Marais recommended. The new system
was installed in due course, whereafter,
according to the second
defendant’s opposing affidavit, one Robert Mostert, evidently
also of Canon, for he installed the
new system, presented the second
defendant with the relevant documentation for the rental agreement
and ‘guarantee’
agreement to be executed. As I
shall discuss in some detail later in this judgment, the terms of the
rental agreement recorded
that the lessor (referred to as ‘the
hirer’) had purchased the camera system chosen by the first
defendant for the
purpose of hiring it to the latter (referred to as
‘the user’) in terms of the rental contract.
[3]
The rental and associated ‘guarantee’
agreements were,
according to their tenor, concluded between Astfin EC (Pty) Ltd t/a
Astfin, of the one part, and the first and
second defendants,
respectively, of the other parts. In terms of certain preceding
contractual arrangements to which the
defendants were strangers,
Astfin had ceded its rights in all agreements of the nature concluded
by it with the defendants to a
third party. The rights so ceded
had in turn been on-ceded to Sasfin Bank Ltd. Sometime
after the conclusion of
the two agreements at issue in the current
case, Sasfin sold its rights in the agreements to South African
Securitisation Programme
(RF) Ltd, which, qua ultimate cessionary, is
the plaintiff in the action now before the court.
[4]
The application for summary judgment was
brought outside the time
limit prescribed in rule 32. The plaintiff accordingly applied
for condonation of its non-compliance
with the rule. The
defendants opposed that application too. I do not propose to go
into the detail of why the application
for summary judgment was
brought late. Suffice it to say that a few days before the
expiry of the period within which the
application should have been
lodged a stage- 5 lockdown was announced by Government in
terms of the Disaster Management
Act because of the Covid-19
pandemic. During that lockdown, which endured from late March
until the beginning of May 2020,
the registrar’s office was
closed for the filing of documents. The application was filed
promptly as soon as it again
became possible to lodge papers at the
court. The late filing therefore occurred in a type of
vis
major
context.
[5]
The defendants have complained, however,
that the plaintiff neglected
to apply timeously for the required condonation and that it has not
given a full enough explanation
for the delay. It is trite that
condonation, when it is needed, should be applied for without delay.
I agree that condonation
could and should have been sought sooner
than it was, but the essential question in determining whether to
condone non-compliance
with procedural rules is where the interests
of justice lie. The dislocating consequences of the
pandemic-related lockdowns
have been all around us and starkly
evident for everyone to see. I doubt that there is anyone who
has not been affected in
some or other way by them. The
defendants have not shown that the plaintiff’s delay in
bringing the application for
condonation has occasioned them any
prejudice. Time is no longer as important as it used to be
under rule 32 in its pre-amendment
form. It is evident that the
parties were actually engaged in settlement discussions during some
of the period concerned.
Mr
Lotz
, who appeared for the
defendants at the hearing (which was conducted online because of the
continuing effects of the pandemic),
admitted that the principal
reason for the defendants’ dogged opposition to the condonation
application was strategic; viz.
mindful that if condonation were
refused, the matter would go to trial by default and the defendants
‘would get their day
in court’, as he put it.
[6]
Various authorities were cited by the defendants’
counsel in
support of the argument that the application for condonation was
deficient. Heavy reliance was placed on
Van Wyk v Unitas
Hospital and Another
[2007] ZACC 24
(6 December
[2007] ZACC 24
;
2007); 2008 (2)
SA 472
(CC);
2008 (4) BCLR 442
(CC) at para 22, in particular.
[7]
In
Van Wyk v Unitas
,
at the place cited, the court stated ‘
An
applicant for condonation must give a full explanation for the
delay. In addition, the explanation must cover the entire
period of delay. And, what is more, the explanation given must
be reasonable.
’ The statement
should be read in context. When that is done it is evident that
the intention was to express an
ideal, not an imperative. The
criterion by which applications for condonation are decided is well
established. It was
referred to in the very first sentence of
the opening paragraph of the section on condonation in the
Constitutional Court’s
judgment
[1]
as follows: ‘
This Court has held that
the standard for considering an application for condonation is the
interests of justice
’. It is a
misconception to construe the jurisprudence as laying down rigid
rules or requirements.
[8]
There is not an exclusive list of factors to
which a court will have regard in deciding whether it would be in the
interests of
justice to grant condonation. The factors to which
regard will usually be had were described in the following terms in
Van Wyk v Unitas
:
‘
Whether it is in the interests of
justice to grant condonation depends on the facts and circumstances
of each case. Factors
that are relevant to this enquiry include
but are not limited to the nature of the relief sought, the extent
and cause of the delay,
the effect of the delay on the administration
of justice and other litigants, the reasonableness of the explanation
for the delay,
the importance of the issue to be raised in the
intended appeal and the prospects of success.
’
[2]
The weight to be given to each of the various factors taken into
consideration will vary depending on the circumstances of
the case;
thus a weak explanation for the delay might in a given case be
compensated by the applicant’s strong prospects
of success in
the main case or the importance of the issue in that case. That
is wholly inconsistent with the prescriptive
approach that the
defendants’ counsel misapprehended the judgment in
Van
Wyk v Unitas
to lay down.
[9]
Condonation of non-compliance with the time
limits prescribed in the rules of court is a matter within the
court’s discretion
- to be exercised judicially, of course.
It will be granted where there is sufficient cause to do so.
The term ‘sufficient
cause’ equates to ‘good cause’
in the sense in which the latter expression is used in rule 27 of the
Uniform
Rules.
[3]
The literature testifies to the interchangeable use of the
expressions.
[4]
It has very wisely long been acknowledged that ‘sufficient
cause’ is a concept that defies finite definition;
see
Cairns
Executors v Gaarn
1912 AD 181
at 186.
As Innes J noted in that judgment, endorsing what Cotton LJ said
in
In re Manchester Economic Society,
24
Ch.D., at p. 48, sufficient cause is ‘“
something
which entitles him
[the applicant for
condonation]
to ask for the indulgence of the
Court.” What that something is must be decided upon the
circumstances of each particular
application.
’
[5]
[10]
I am satisfied in all the circumstances that sufficient cause has
been shown for the late filing of the summary judgment application to
be condoned. It would not be in the interests of the
efficient
administration of justice in the circumstances of this case to
require an action to go to trial when there was a reasonable
prospect
that it could be finally determined in a summary judgment
application. Sending the matter to trial in those circumstances
would also be inimical to the objectively assessed best interests of
the litigants on both sides because it might materially and
quite
unnecessarily increase the costs of the litigation. The
opposition to the application was unreasonable in my view.
Fairness suggests that each party should bear its own costs in regard
to the proceedings for condonation.
[11]
The defendants took two preliminary points against the summary
judgment application. Firstly, as to the form in which the
application was brought and secondly, to the competence of the
deponent to the supporting affidavit to confirm the cause of action
and the facts upon which the claim was brought.
[12]
As to the first point, the defendants contended
that the application should have been brought in the long form.
There is no
merit in the contention, and the defendants’
counsel advisedly did not advance any oral argument in support of
it.
An application for summary judgment is incidental to a
pending action; it is not a stand-alone application. It is
brought
on notice (i.e. in the form contemplated by rule 6(11)).
That follows from rule 32(2)(a), which speaks of ‘a notice
of
application’.
[6]
The rule does not contemplate an application on ‘notice of
motion’ (i.e. in the form contemplated by rule 6(1)).
The
only matter that a plaintiff needs to take into account when bringing
an application for summary judgment is that the selection
of the date
of set down must allow time for the defendant to deliver an opposing
affidavit as provided in rule 32(3)(b), if it
so wishes.
[13]
The second preliminary point taken by the defendants is also without
merit in my judgment.
[14]
The deponent to the supporting affidavit qualified herself in these
terms:
1.1
I am a major female employed by Sasfin bank
limited (Sasfin) as its litigation manager.
1.2
Sasfin inter alia administers and manages rental
agreements ceded to the plaintiff and performs all administrative
functions in
relation to the enforcement of the said rental
agreements.
2.
I have the plaintiff’s records relating to
the transactions forming the subject matter of the plaintiff’s
current action
under the above case number in my possession and under
my control.
3.
In the premises the facts set out herein are within my
own personal
knowledge and all to the best of my belief both true and correct.
4.
I am duly authorized to represent the plaintiff and depose
to this
affidavit in support of summary judgment on the plaintiff's behalf.
5.
I swear positively to the facts set out in the plaintiff’s
particulars of claim insofar as same relates two Sasfin and the
plaintiff and I verified the parties, the cause of action and the
amount claimed.
[15]
The objection taken by the defendants is not a novel one.
It is
of a sort that has been raised and addressed in a number of
comparable cases. In my view, the dicta of Swain AJA in
Stamford Sales & Distribution (Pty) Limited v Metraclark (Pty)
Limited
[2014] ZASCA 79
(29 May 2014) at para 10-12 are
dispositive of the point adversely to the defendants. The
learned judge pronounced himself
as follows at the place cited:
[10] This
court in
Dean
Gillian Rees v Investec Bank Limited
(330/13)
[2014]
ZASCA 38
(28 March 2014),[
[7]
]
in dealing with the issue of whether personal knowledge of all of the
facts forming the basis for the cause of action, had to
be possessed
by the deponent to the verifying affidavit, said the following in
para 15:
‘
As
stated in
Maharaj
,
[
[8]
]
“undue formalism in procedural matters is always to be
eschewed” and must give way to commercial pragmatism. At the
end of the day, whether or not to grant summary judgment is
a
fact-based
enquiry
.
Many summary judgment applications are brought by financial
institutions and large corporations. First-hand knowledge of every
fact cannot and should not be required of the official who deposes to
the affidavit on behalf of such financial institutions and
large
corporations. To insist on first-hand knowledge is not consistent
with the principles espoused in
Maharaj
.’ (My
emphasis.)
In my view, as long as there is
direct knowledge of the material facts underlying the cause of
action,
which may be gained by a person who has possession of all
of the documentation
, that is sufficient.
[11] The enquiry, which is
fact-based, considers the contents of the verifying affidavit
together with the other documents
properly before the court. The
object is to decide whether the positive affirmation of the facts
forming the basis for the cause
of action, by the deponent to the
verifying affidavit, is sufficiently reliable to justify the grant of
summary judgment. Those
high court decisions which have required
personal knowledge of all of the material facts on the part of the
deponent to the verifying
affidavit are accordingly not in accordance
with the principles laid down by this court in
Maharaj
.
[12] An insistence upon
personal knowledge by a deponent to a verifying affidavit of all of
the material facts forming the
basis for the cause of action, where
the cessionary of a claim seeks summary judgment against the debtor,
in most cases would effectively
preclude the grant of summary
judgment. The consequences of this narrow approach is illustrated by
the decision in
Trekker Investments (Pty) Ltd v Wimpy Bar
1977 (3) SA 447
(W). It was held that it had to appear from the
verifying affidavit that the facts relating to the claim of the
cedent against
the debtor were within the knowledge of the deponent
who was able to swear positively thereto. The deponent in such a case
was
prima facie making the affidavit on behalf of a cessionary and
there was nothing in the affidavit to indicate that the deponent
had
any connection with the cedent, which presumably would have enabled
him to acquire this knowledge. To insist on personal knowledge
by the
deponent to the verifying affidavit on behalf of the cessionary of
all of the material facts of the claim of the cedent
against the
debtor, emphasises formalism in procedural matters at the expense of
commercial pragmatism.’
(Underlining supplied for
emphasis.)
It
was pointed out by Corbett
JA
in
Maharaj
(supra) that an evident lack of first-hand knowledge of the facts by
the deponent that might detract from the supporting affidavit’s
strict compliance with the requirements of rule 32(2) may, depending
on the circumstances, be cured by the effect of reference
to the
papers in the matter as a whole. The court looks at the matter
‘at the end of the day’ on the basis of
all the material
that is properly before it. As Mr
Botha
for the plaintiff reminded me, I rehearsed the pertinent principles
in some detail in an earlier judgment, in
Absa
Bank Ltd v Future Indefinite Investments 201 (Pty) Ltd and Others
[2016] ZAWCHC 118
(12 September 2016). There is no need for me
to repeat here what may easily be read there.
[9]
[16]
Subject to the matter of rectification that
has been raised by the defendants (of which I shall treat presently),
the issue in this
case turns on the meaning and effect of the written
contracts that are properly before the court. Those contracts
are under
the deponent’s administration, at least in matters in
which a default gives rise to litigation as the ones in issue in the
current case have. I accordingly consider, with regard to the
aforementioned principles and the matters that are in issue
in the
case, that the deponent was adequately qualified for the purposes of
meeting the requirements of rule 32(2)(a) and (b).
[17]
Turning then to the claims themselves and the defendants’
answers to them. It is apparent from the pleadings and
affidavits that the rental agreement is in the nature of a financing
agreement. The new camera system was evidently supplied to the
first defendant by Canon at the second defendant’s instance
and
paid for by Atfin or its delegatees. The circumstances in which
the rental and associated ‘guarantee’ agreement
were
executed were described as follows in the defendants’ opposing
affidavit:
26.
I asked Mr Michiel Marais [of Canon] to provide me with a quotation
for
the replacement costs of the existing cameras.
27.
Mr Michiel Marais furnished me with a single page from Canon, George,
which I accepted.
28.
At a later juncture, and after the new camera system was installed,
Mr
Robert Mostert furnished me with the documentation from AssetFin.
Mr Mostert was in a hurry and requested me to sign the aforesaid
documentation from AssetFin. Unfortunately, and due to the fact
that I trusted Mr Mostert, I did not read the documentation
from
AssetFin and signed the documentation.
29.
After the installation, the 1
st
Defendant had various
problems with the camera equipment as installed by Mr Robert Mostert.
[18]
The camera system did not work satisfactorily. It appears
from
the nature of the problems, which are enumerated in the defendants’
plea and supported by a report commissioned by the
first defendant
from Scholtz Management Services, a copy of which is attached as an
annexure to the plea, that they lie in the
installation of the
equipment, rather than in the integrity of the camera system itself.
[19]
The first defendant stopped payment of the monthly rental that it
had
undertaken to pay in terms of the rental agreement because of its
dissatisfaction with the new camera system. The defendants
contend that the first defendant is entitled to suspend payment
because of the shortcomings in the operation of the new camera
system. The rental agreement provided that in the event of the
first defendant defaulting on its rental payments, the hirer
was
entitled to claim return of the goods and enforce payment of the full
amount outstanding for remainder of the lease period,
upon payment of
which the goods would again be made available to the user until the
expiry date of the contract. The plaintiff
claims return of the
goods and payment of the total outstanding rental in respect of the
remainder of the lease, against receipt
of which the goods will be
made available for return to the first defendant for use until the
expiry of the lease. The claim
against the second defendant is
under the aforementioned ‘guarantee agreement’.
[20]
Against that background it is appropriate at this stage to consider
certain of the terms of the rental agreement.
[21]
On the facing page of the deed of contract, in a section printed
immediately above a place signed by the second defendant on behalf of
the first defendant, the following appears in capital letters:
1. YOU [i.e. the
first defendant] HEREBY ACKNOWLEDGE AND AGREE THAT
a. NOTHING THAT IS
NOT DISTINCTLY SET OUT HEREIN IS BINDING ON US (i.e. Assetfin)
b. YOU WERE REFERRED
BY THE SUPPLIER OF THE EQUIPMENT TO US.
c. WE HAVE BOUGHT
THE EQUIPMENT FROM THE SUPPLIER AT YOUR SPECIAL INSTANCE AND REQUEST.
[22]
Clause 24 of the rental agreement provides:
The USER [i.e. the first defendant] confirms that
maintenance or service for or relating to THE EQUIPMENT is expressly
excluded
from the terms of this agreement and dissatisfaction by the
USER relating to the serviceability or performance of THE EQUIPMENT
does not in any way constitute an excuse to withhold any rental
payment to HIRER.
Clause 28 provides:
THE EQUIPMENT has been or will be acquired by HIRER
[i.e. Assetfin] at USER’S request and solely for the purposes
of renting
THE EQUIPMENT to USER. THE EQUIPMENT and the supplier have
been selected by USER and USER has negotiated the specifications,
warranties
and guarantees required by it with the Supplier. HIRER
makes no warranties or representations whatsoever whether expressed
or implied
to user as to the condition of THE EQUIPMENT and/or the
Supplier, whether singularly or jointly, as to their fitness for any
purpose
whatsoever.
[23]
It is plain that those provisions are inconsistent with, and indeed
exclude, any right by the first defendant to stop payment of the
rentals on account of its dissatisfaction with the camera system
equipment.
[24]
The rental agreement also expressly recorded Assetfin’s right
to cede any or all of its rights in terms of the agreement to any
third party without prior notice to ‘the user’.
[25]
At the same time as the rental and guarantee agreements were signed,
the second defendant, acting in a representative capacity for the
first defendant, also signed a written ‘
Acknowledgment of
Receipt of Equipment
’ that was printed under an Assetfin
logo header. That document listed the components of the
equipment hired in terms
of the rental agreement and set out the
following in clearly legible print immediately above the space
provided for the second
defendant’s signature:
S
BEEN EFFECTED
I/We
hereby state that I/we have
received all of the goods as scheduled above.
The goods have been installed at the address / addresses
stated above.
The goods are exactly what I/we ordered.
I/ We have tested it and found it to be in good working
order.
You, the hirer, may pay for the purchase of the goods.
The serial number/s on the goods
correspond with the serial number/s on the schedule and have been
insured in accordance with clause
20 and its subclauses.
(The reference to clause 20 is a reference to one of the
standard clauses in the rental agreement that imposes an obligation
on
the party renting the goods to insure them against loss or
damage.) The wording makes it clear that ‘the supplier’
and ‘the hirer’ are different parties and that the hirer
will pay for the goods only upon the lessee’s assurance
that
the goods are those that it ordered and they have been received by
the lessee in good working order.
[26]
In the face of the aforegoing provisions of the rental agreement
and
‘Acknowledgment of Receipt’, the second defendant made
the following averments in the defendants’ opposing
affidavit
in the summary judgment application:
37.
The Plaintiff avers that the equipment as
furnished by Assetfin was selected by the 1st and 2nd Defendant and
that we negotiated
the specifications, warranties and guarantees with
the supplier.
38.
I categorically deny that:
38.1 I was
referred, on behalf of the 1st Defendant by the “SUPPLIER OF
THE EQUIPMENT”
to AssetFin.
38.2 I and/or
the 1st Defendant selected the “EQUIPMENT”.
38.3 I and/or
the 1st Defendant selected the “
Supplier
”.
38.4 I and/or
the 1st Defendant “
...has negotiated the specifications,
warranties and guarantees required by it, with the supplier
”.
39.
I invite the Plaintiff to provide proof to the contrary as stated
above.
40.
I respectfully submit that the allegations by the Plaintiff that I
have
selected the equipment and negotiated the specifications,
warranties and guarantees as is required by it with the supplier, is
totally absurd. I am a hotelier and know nothing about cameras,
security systems as supplied by AssetFin. I trusted Mr Michiel Marais
to furnish the 1st defendant with the equipment.
41.
At all material times I was under the impression that AssetFin would
be
responsible for the warranties / guarantees of the equipment as
well as all warranties / guarantees pertaining to the installation
of
the equipment.
It is notable that the second defendant gives no
explanation of how the defendants came to deal with Assetfin and
makes it clear
that he trusted Marais (of Canon,
not
Assetfin)
‘
to furnish the 1st defendant with the equipment
’.
[27]
In argument, Mr
Lotz
submitted that the second defendant had
been mistaken when he concluded the agreements, and had thought that
the defendants were
contracting with Canon. How that could have
been the case is difficult to credit because the documentation signed
by the
second defendant refers in bold letters in several places to
AssetFin, and nowhere mentions Canon. More to the point,
however,
the submission derived no support from the content of the
opposing affidavit, where no such claim was made. Indeed, the
second
defendant gives no explanation whatsoever of how the first
defendant was to pay for or finance the new camera system that he had
installed.
[28]
What is clear from the content of the opposing affidavit is that
the
second defendant cannot have read the terms of the rental agreement
or paid proper attention to the content of the acknowledgment
of
receipt of equipment document. He expressly admits as much in
paragraph 28 of the affidavit, which has been quoted above.
[29]
Relying on the well-established principles rehearsed in
George v
Fairmead
(Pty) Ltd
1958 (2) SA 465
(A) and
National and
Overseas Distributors Corporation (Pty) Ltd v National Potato Board
1958 (2) SA 473
(A), the plaintiff’s counsel pointed out
that the defendants had not alleged or pleaded any facts that would
establish that
any error on the part of the second defendant in his
apprehension of the terms of the rental agreement had been
reasonable; in
other words, the defendants had not shown that they
might be able to establish at a trial that any error by the second
defendant
had been
iustus
. The submissions advanced by
Mr
Botha
in this regard were well made in my judgment.
There was no reliance by the defendants on fraud or misrepresentation
by Assetfin.
[30]
Insofar as the defendants’ counsel appeared to contend that
the
defendants would be done an injustice by being held to the wording of
the rental agreement signed by the second defendant,
it must be
remembered that the test is an objective one. The following
observations by Schreiner JA in the
National Potato Board
case
supra, at p. 479G-H succinctly summarise the position that pertains
in law:
Our law allows a party to set up his own mistake in
certain circumstances in order to escape liability under a contract
into which
he has entered. But where the other party has not made any
misrepresentation and has not appreciated at the time of acceptance
that his offer was being accepted under a misapprehension, the scope
for a defence of unilateral mistake is very narrow, if it exists
at
all. At least the mistake (error) would have to be reasonable
(
justus
) and it would have to be pleaded. In the present case
the plea makes no mention of mistake and there is no basis in the
evidence
for a contention that the mistake was reasonable.
[31]
Similarly, at a trial it would not be permissible, save in the
context of rectification, for the defendants to adduce evidence as to
the terms of the agreement with Assetfin that were at variance
with
the objectively determinable import of the content of the written
agreement, especially in a situation like the current matter
where
the deed of contract provides that it is the sole memorial of the
agreement. That is the effect of the parol evidence
rule; see
KPMG Chartered Accountants (SA) v Securefin Ltd and Another
2009 (4) SA 399
(SCA) at para 39.
[32]
The defendants have alleged that the rental
agreement is susceptible to rectification in certain respects.
[10]
The plaintiff’s counsel has pointed out that were the contract
to be rectified in the manner contended for by the defendants
it
would be internally contradictory in material respects. That
might be so, but if a case for rectification were made out,
the
difficulties to which rectification might give rise would be no
reason to refuse it. It is a sad fact that it is not
uncommon
for persons to make unbusinesslike agreements. The fact that
the rectification contended for would give rise to
an unbusinesslike
result is merely a factor to be weighed in the determination of
whether or not the alleged common mistake relied
upon by the party
seeking rectification has been established on the probabilities.
It is trite that a court seized of an
opposed application for summary
judgment should not base its decision on its assessment of the
prospects of success (or lack thereof)
of a defence made out on the
papers. The court’s enquiry is limited to whether the
defendant has demonstrated ‘a
bona fide defence’ in the
well-established meaning of that term in rule 32(3)(b).
[11]
[33]
In the latter regard, it is significant that the defendants have
not
alleged any facts, other than their own mistake, that would support
their claim for rectification. It is difficult to
conceive how
Assetfin could have been mistaken about the content of what on the
face of matters appears to be a standard form contract
document used
by the company. The defendants have not made any allegations
that would suggest how they might overcome that
difficulty were the
matter to go to trial. On the contrary, the second defendant
has admitted that he signed the contract
without reading it because
he trusted Mr Mostert, apparently the installer of the equipment
who handed him the finance contracts
to be signed, no doubt intending
to present them to Assetfin in order to obtain payment for the goods
supplied to the first defendant.
That does not afford a basis
to claim rectification; cf.
Acacia Mines Ltd v Boschoff
1957
(1) SA 93
(T) at 101H-102B.
[34]
How was Assetfin to know that the second defendant did not by his
signature to the contract intend to bind the first defendant to the
recorded terms of the rental agreement? The defendants’
plea and opposing affidavit do not provide an answer. Consider
in this regard the oft quoted observations of Wessels JA in
South
African Railways & Harbours v National Bank of South Africa Ltd
1924 AD 704
at 715-716: ‘
The law does not concern
itself with the working of the minds of parties to a contract, but
with the external manifestation of their
minds. Even therefore if
from a philosophical standpoint the minds of the parties do not meet,
yet, if by their acts their minds
seem to have met, the law will,
where fraud is not alleged, look to their acts and assume that their
minds did meet and that they
contracted in accordance with what the
parties purport to accept as a record of their agreement. This
is the only practical
way in which Courts of law can determine the
terms of a contract.
’
[35]
It has not been alleged that there were any prior discussions on
the
terms of the agreement with a representative of Assetfin. There
is no evidence that the second defendant had any discussions
with
anyone from AssetFin at all, which suggests as a matter of
probability that the sales representatives of Canon must have
attended to the formalities of arranging the financing of the
transaction, which would explain Mr Mostert’s conduct described
above. There is also nothing in the opposing affidavit or the
defendants’ plea to indicate how the defendants might
otherwise
be able to show the
common
intention between the parties which
by
mutual
error was wrongly expressed in the rental
agreement. In my judgment, the allegations in the papers to
support the pleaded
defence of rectification are therefore
fundamentally lacking. In the result, the defendants have
failed to satisfy me that
the defence that the defendants purport to
advance is a bona fide defence.
[36]
It follows that the plaintiff is entitled to summary judgment against
the defendants. There is no reason for me to exercise my
overriding discretion to withhold judgment at this stage and send
the
matter to trial.
[37]
I should perhaps state for the record that during the argument
of the matter I requested counsel to consider the possible
application of the Consumer Protection Act on the given facts, more
particularly in the context of the defendants’ complaint that
the rental agreement left them remediless in regard to the
allegedly
defective equipment supplied to the first defendant. I am
grateful for the additional written submissions they
provided after
the hearing. I agree with the plaintiff’s counsel that
the Act appears to have no application in this
case (and the
defendant’s counsel did not contend to the contrary), but that
that does not mean that the first defendant
necessarily has no right
of recourse against the supplier and installer of the equipment.
[38]
In response to my request for a note on the possible application
of
the Consumer Protection Act, the defendant’s counsel took the
opportunity to contend that the plaintiff ‘as well
as its
predecessors’ (by which I understood him to include Assetfin)
are ‘financial institutions’ as defined
in the Financial
Advisory and Intermediary Services Act 37 of 2002 (the FAIS Act) and
that Assetfin’s transaction with the
first defendant
contravened the provisions of the General Code of Conduct for
authorised financial services providers. I
do not intend to
traverse the argument advanced in this regard in any detail. It
was a point not raised in either the plea
or the opposing affidavit.
Suffice it to say three things: (i) the term ‘financial
institution’ is not defined
in the FAIS Act, (ii) the
lease agreement is not a ‘financial product’ within the
meaning of the Act and Assetfin
was not providing a ‘financial
service’, as defined in the Act, by concluding the lease
agreement and (iii) the alleged
breaches of the Code of Conduct are
in any event not established, even prima facie, on the papers.
[39]
The following order will issue:
(a) The plaintiff’s application
for condonation of the late delivery of its application for summary
judgment
is granted, with no order as to costs.
(b) Summary judgment is granted in favour of
the plaintiff:
i.
For delivery up, subject to the provisions of paragraph (iii)
of this
Order, by the first defendant of the following goods (as described in
prayer 1 of the particulars of claim):
·
1 x CCTV Surveillance Camera System with serial no.
2F48775B00532;
·
1 x 32 CH embedded NVR;
·
3 x 16-CH HDTVI turbo DVR;
·
4 x 4MP vari-focal IR network dome cameras;
·
4 x 2-MP high performance vari-focal turbo bullet cameras;
·
24 x 2-MP Oudsthoor WDR infra-red network dome cameras;
·
37 x HD IR turbo turret cameras;
·
1 x Netgear prosafe smart switch;
·
1 x Netgear prosafe 8 port smart switch;
·
1 x Netgear 8 port unmanaged fast ethernet desktop switch;
·
5 x Seagate surveillance 4TB 3.5’ SATA hard drive;
·
3 x 2000VA line interactive UPS;
·
3 x Samsung 32” HD FLAT TF; and
·
5 x Access Control Management PC.
ii.
Jointly and severally against the first and second defendants,
for –
a) Payment of
the sum of R440 252, 56.
b) Interest
thereon
a tempore morae
from 1 July 2019 to date of payment at
the prime interest rate charged to its customers from time to time by
the bankers of Assetfin
EC (Pty) Ltd.
c) Costs of
suit on the scale as between attorney and own client (as provided in
terms
of the Master Rental Agreement concluded between Assetfin EC
(Pty) Ltd and the first defendant, a copy whereof is annexed marked
SAS 1a and SAS 1b to the particulars of claim).
iii.
As against payment in full by the defendants of the amounts
due in
terms of subparagraphs (ii) (a) and (b) of this Order, the plaintiff
shall make available the goods surrendered by the first
defendant in
terms of paragraph (i) for use by the defendant during the then
remaining currency of the Master Rental Agreement.
A.G.
BINNS-WARD
Judge
of the High Court
[1]
In para 20.
[2]
Ibid. Repeating the
rehearsal of applicable principles by Yacoob J in
Brummer
v Gorfil Brothers Investments (Pty) Ltd and Others
[2000] ZACC 3
(30 March
[2000] ZACC 3
;
2000); 2000 (5) BCLR 465
;
2000 (2) SA 837
(CC) in para 3.
[3]
Rule 27 regulates the basis
upon which the court may upon application make an order extending or
abridging any time prescribed
by the rules. The plaintiff’s
application for condonation is in essence an application in terms of
rule 27.
[4]
See e.g.
Silber
v Ozen Wholesalers (Pty) Ltd
1954
(2) SA 345
(A) at 352 in fin-353A, where the expressions were
described by Schreiner JA as being ‘
practically
synonymous
’.
[5]
Most recently endorsed by the
Constitutional Court in
National
Credit Regulator v Quick Step Finance (Pty) Ltd
[2018] ZACC 203
(20 February 2018) at para 19.
[6]
See also DE Van Loggerenberg,
Erasmus,
Superior Court Practice
vol 2, RS 11 2019,
at D1-392B, s.v. ‘
notice of
application
’.
[7]
2014 (4) SA 220 (SCA).
[8]
Maharaj v Barclays National Bank Ltd
1976 (1) SA 418 (A).
[9]
The relevant part of the judgment is quoted
in
extenso
in the commentary on rule 32 in
Erasmus, Superior Court Practice
supra, in vol 2 at RS 3, 2016, D1-402 – RS 13, 2020, D1-402F.
[10]
The defendants alleged that
the rental agreement fell to be rectified by the deletion of clause
1(b) (quoted in paragraph 21 above)
and by the rewording of clause
28 (quoted in paragraph 22 above) by ‘
Substituting
paragraph 28 with the following paragraph:
“
THE
EQUIPMENT has been or will be acquired by hirer at user’s
request and solely for the purpose of renting the equipment
to user.
It is recorded that
THE EQUIPMENT and the Supplier have
not
been selected by USER, and
the
USER has
not
negotiated the specifications, warranties and guarantees required by
it, with the Supplier.”
’
and
by ‘
deleting the following words
in paragraph 28: “HIRER makes no warranties or representations
whatsoever whether expressed
or implied to USER as to the condition
of the equipment and/ or the Supplier, whether singularly or
jointly, as to their fitness
for any purpose whatsoever”.
’
[11]
Cf.
Maharaj
supra,
at p.426A-E and
Breitenbach v Fiat SA (Edms)
Bpk
1976 (2) SA 226
(T), at 228B-229A.