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[2012] ZAGPJHC 273
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Changing Tides 17 (Pty) Ltd NO v Vitex Investments 878 CC and Another (2012/14278) [2012] ZAGPJHC 273 (26 October 2012)
REPUBLIC OF SOUTH AFRICA
SOUTH GAUTENG HIGH COURT
(JOHANNESBURG)
CASE NO: 2012/14278
In the matter between:
CHANGING
TIDE
S 17 (PTY) LIMITED N.O.
….........................
Plaintiff
and
VITEX
INVESTMENTS 878
CC
....................................................
First
Defendant
VAN
DER LIST, THEODORUS JACOBUS
...............................
Second
Defendant
JUDGMENT
This is an application for summary judgment.
The claim arises out of a suite of agreements.
Blue Banner Securitisation Vehicle RC1 (Pty) Ltd (“Blue
Banner”) lent
and advanced a capital sum of R3 640 000 and an
additional sum of R1 million to the first defendant. The South
African Home
Loans Guarantee Trust (“the Trust”)
guaranteed compliance by the first defendant with its obligations to
Blue Banner
in terms of the loan agreement. The first defendant
executed a written indemnity in favour of the Trust. That indemnity
was
secured by the registration of an indemnity bond over Portion 5
of Erf 2176, Bryanston Township, registration division IR, Province
of Gauteng, held by the first defendant in terms of Deed of Transfer
No. T59756/2009. The sole trustee of the Trust is the plaintiff,
being Changing Tides 17 (Pty) Ltd N.O. The manager of the trustee,
Changing Tides, is South African Home Loans (Pty) Ltd. The
various
agreements were concluded on 6 July 2010 and the indemnity bond was
registered under bond No. 46670/2010 on 15 October
2010. The
indemnity bond constitutes a mortgage securing the first defendant’s
obligations under the indemnity up to an
amount of R4 million.
On 6 July 2010, the second defendant executed a
written deed of suretyship in terms of which he bound himself
jointly and severally
to the Trust as surety and co-principal debtor
for the due payment to the Trust by the first defendant of any sum
owing by or
claimable from the first defendant from any cause
whatsoever.
The plaintiff alleges that the first defendant
failed timeously to perform its obligations under the loan agreement
by falling
into arrears with the monthly instalments. These amounts
have, despite demand, not been paid. The arrears as at 28 March
2012
amounted to R150 452,39. As at 1 February 2012, the full
balance owing by the first defendant under the loan was R3 721
956,42.
The plaintiff holds the second defendant liable for the same amount
in terms of the deed of suretyship.
The defendants have filed an affidavit resisting
summary judgment in which they raise two points
in
limine
and a defence on the merits.
The defence on the merits is based on the
allegation that the financing to be provided by Blue Banner in terms
of the suite of
agreements, represented only 30% of the total
financing required for a particular property development. The
balance of the finance
was to be provided by a different entity.
That finance was conditional upon the first defendant’s
securing finance in
respect of the 30% to be provided by Blue Banner
in terms of the suite of agreements.
The defendants allege that they dealt with a bond originator, one
“Brent” who was employed by SA Home Loans (Pty)
Ltd and
who gave the assurance that the registration of the indemnity bond
would be a quick and simple process.
They aver further that this did not turn out to
be the case
. It is averred that as a
result of delays on the part of SA Home Loans (Pty) Ltd, the
condition upon which finance was to be
provided in respect of the
balance of 70%, failed. The property development could not proceed.
This resulted in a loss of profits
in the amount of R9 350 000.
Accordingly, the defendants allege that they have a counterclaim
against the plaintiff
in an amount substantially in excess of the
amount claimed in terms of the suite of agreements.
There is, however, a fundamental flaw with the
counterclaim. For a counterclaim to be set up as a valid basis for
resisting a
summary judgment application, the
counterclaim
must obviously lie against the plaintiff. However, on the
defendant’s own version, the claim lies against
SA Home Loans
(Pty) Ltd and not against the plaintiff, Changing Tides 17 (Pty)
Ltd.
On thi
s basis alone, no
bona fide defence is raised by the defendant on the merits. It is
not necessary for me to consider the further
argument advanced by
the plaintiff that the essential elements of the counterclaim were
not properly set out in the affidavit
resisting summary judgment.
It will immediately become apparent that, that
being the only defence proffered on the merits, it is not in dispute
on the defendants’
affidavit, that the suite of agreements was
validly concluded, that the first defendant is in default in its
repayment of the
loan and that the total amount due is the amount
claimed by the plaintiff.
I now turn to deal with the points
in
limine
.
The first point
in
limine
is that the summons and
particulars of claim are vague and embarrassing and that on this
basis summary judgment should be refused.
The basis upon which this
is alleged is that, whilst the loan agreement, indemnity and
suretyship agreement all refer to the
borrower as being Vitex
Investments 878 CC (ie the first defendant), having a company
registration number 2007/207893/23, the
indemnity bond refers to
Vitex Investments 878 CC but with company registration number
2007/207889/23.
Reference to the relevant CIPC records reveal
s
that the latter number, 2007/207889/23, is in fact the registration
number of a different close corporation being “Consep
Construction CC”. However, closer scrutiny of the indemnity
bond documentation shows that there was an attempt to amend
the
registration number whereby one of the digits “8” was
deleted, leaving a purported registration number of 2007/20789/23.
In fact, this number is not the number of Consep Construction CC
and, containing insufficient digits, is probably not the
registration number of any entity.
All of the other documents referred to had also
referred initially to the incorrect registration number being that
of Consep Construction
CC but amendments had been fully and
successfully effected to reflect the registration number of the
first defendant. The probabilities
are overwhelming that a similar
attempt was made to correct the registration number reflected on the
indemnity bond, but failed
insofar as the deletion of the one digit
“8” was not followed by the insertion of the digit “3”
after
the digit “9”. The first defendant is manifestly
the party to that document.
In any event, as was pointed out in
Venter
and Others NNO v Barritt; Venter and Others NNO v Wolfsberg Arch
Investments 2 (Pty) Ltd
:
1
“
An
exception to particulars of claim on the basis that they are vague
and embarrassing
strikes at the formulation
of the cause of action and not its legal validity. It must go the
‘root of the matter’.
Such an exception may not refer
only to certain paragraphs of the particulars of claim; it ‘must
go to the whole cause of
action, which must be demonstrated to be
vague and embarrassing’.”
2
Accordingly, there is no substance in this point
in limine
.
The second point
in
limine
challenges the certificates of
balance relied on by the plaintiff. This point
in limine
is undermined from the
outset by the fact that the defendants in their affidavit resisting
summary judgment do not deny that
the first defendant received the
funds advanced, nor do they deny the quantum of the sum claimed.
Accordingly, the defendants’
affidavit is in itself
corroboration of these components of the plaintiff’s claim. I
will nonetheless consider the point.
The defendants contend that the certificate of balance relied on is
not signed by the person envisaged in clause 20 of the loan
agreement between Blue Banner and the first defendant. However, as
pointed out by counsel for the plaintiff, the plaintiff’s
cause of action is based on the indemnity rather than the loan
agreement. The relevant provision in the indemnity provides as
follows:
“
5. Certificate
of Indebtedness
The amount
of my/our indebtedness hereunder at any time (including interest and
the rate of interest and the manner in which same
is calculated
and/or
charged) shall be determined and
prima facie proved by a certificate signed by any manager, trustee or
accountant of the South
African Home Loans Guarantee Trust. It shall
not be necessary to prove the identity and/or appointment of a person
signing any
such certificate.”
The certificate of balance itself reads as follows:
“
SA
HOME LOANS (PROPRIETARY) LIMITED … (herein represented by the
undersigned Amina Bassa in her capacity as its duly authorised
representative) in its capacity as the duly appointed Manager of the
SOUTH AFRICA HOME LOANS GUARANTEE TRUST … (IT10713/00)
(‘the
Trust’) certifies that VITEX INVESTMENTS 878 CC is indebted to
the Trust:
in
an amount of R3 721 956,42;
plus
interest on the sum of R3 721 956,42 calculated at the
rate of 9,30% per annum, compounded monthly in arrear from
01/02/2012 to date of payment (being the Base rate of 5.60% as at
01/02/2012 plus 3.70%);
which indebtedness is
presently owing, due and payable.
Dated at
Durban on this the 23
rd
day of March 2012.
_____________________
SA Home Loans (Pty) Ltd
(herein
represented by Amina Bassa) in its capacity as Manager of the South
African Home Loans Guarantee Trust …”
The point made by plaintiff’s counsel is
that the certificate is not purportedly signed by Amina Bassa in her
own right
but rather by SA Home Loans (Pty) Ltd. To the extent that
it is signed by Amina Bassa, she does so only in her capacity as
representative
of the juristic entity SA Home Loans (Pty) Ltd. It
is that entity which imposes itself as the signatory to the
certificate of
balance and which describes itself as “
Manager
of the South African Home Loans Guarantee Trust”
.
This, in my view, is compliant with clause 5 of the indemnity which
provides for signature of a certificate by “
any
manager
trustee or accountant of the South African Home Loans Guarantee
Trust.”
In this regard it was
common cause that SA Home Loans (Pty) Ltd is manager of the South
African Home Loans Guarantee Trust.
The respondent argued that reference to “
manager,
trustee or accountant
” must be
taken as referring to a natural and not a juristic person. However,
he was not able to point to any textual basis
for that
interpretation other than, perhaps, the maxim
noscitur
a sociis
. In my view that is not a
sufficient basis for the interpretation contended for.
Accordingly, there is in my view, no merit in the
second point
in limine
.
In argument, counsel for the defendant also
challenged the capacity of the deponent to the affidavit filed in
support of the application
for summary judgment to swear positively
to the facts verifying the cause of action and the amount claimed
,
as required by rule 32(2).
The argument of counsel for the defendant was
encapsulated in his heads of argument as follows :
“
Bearing in mind the
fairly complex structure of the plaintiff’s claim it is
submitted that the deponent summary judgment (sic)
cannot be said to
have the requisite personal knowledge of the facts upon which the
plaintiff’s cause of action is based
and is unable to verify
and to confirm the facts recorded in the particulars of claim…
It is submitted that it is clear
that the deponent does not have
personal knowledge and cannot commit herself under oath to the truth
of the allegations made.
She is simply deposing to hearsay.”
The affidavit in support of the application for summary judgment is
signed by one Rashumi Missra who deposes as follows:
“
1. I
am employed by SA Home Loans (P
roprietary)
Limited (“SAHL”) … as a Supervisor in the
litigation department. I have, save where the context
clearly
indicates otherwise, personal knowledge of the facts herein contained
which are, to the best of my belief, both true and
correct and I can
and do swear positively thereto.
2. SAHL :
2.1 originates and administers
loans for their duration on behalf of, inter alia, Blue Banner
Securitisation Vehicle RC1 (Proprietary)
Limited … as defined
in the Plaintiff’s particulars of claim and is entitled in
terms of the provisions of the loan
agreement to exercise all rights
attaching to the Lender under the loan agreements on behalf of the
Lender; and
2.2 administers
and manages on behalf of the Plaintiff, being the sole trustee of the
South African Home Loans Guarantee Trust …
the affairs of the
Trust, including but not limited to protection and enforcement of the
Trust’s rights under and in terms
of written indemnities
executed and indemnity bonds registered in favour of the Trust.
3. In my capacity as a
supervisor in the litigation department of SAHL, I have access to and
have under my control all documents,
records and information to
enable me to monitor and determine:
3.1 the status of the loans
administered by SAHL (which includes the loan referred to in this
action) and the compliance by borrowers
(which the defendants are)
with their obligations to the Lender in terms of the loans and Trust
in terms of the written indemnities
in the indemnity bonds; and
3.2 the
nature and extent of the indebtedness of the borrowers (which the
First Defendant is) to the Lender in terms of such loans
and the
Trust in respect of the written indemnities and indemnity bonds.
I confirm that I have
familiarised myself with the contents of the aforesaid records,
documents and information relating to the
claims against the First
and Second Defendant.
4. I hereby, on behalf of the
Plaintiff:
4.1 verify
and confirm the facts recorded in the Summons and Particulars of
Claim and annexures thereto and I verify the cause of
action of the
Plaintiff against the First and Second Defendant, based on the
grounds stated in the Summons and Particulars of Claim
and the
annexures thereto;
4.2 verify
and confirm the amount claimed in the Plaintiff’s Summons and
Particulars of Claim and the relief prayed for in
the Summons and
Particulars of Claim by the Plaintiff as against the First and Second
Defendant.”
Both parties referred me to the recent decision
of Davis J in the Western Cape High Court in
First
Rand Bank Ltd v Huganel Trust.
3
That judgment conducts a helpful and extensive survey of the
relevant case law commencing with the decision of Corbett JA (as
he
then was) in
Maharaj v Barclays
National Bank Ltd.
4
He also considers the
“post-Maharaj
jurisprudence”
including the
decisions in
Shackleton Credit
Management (Pty) Ltd v Microzone Trading 88 CC and Another
,
5
First Rand Bank Ltd v Beyer
,
6
Standard Bank Ltd v Kroonhoek Boerdery CC and others
,
7
Standard Bank of SA Ltd v Han-Rit
Boerdery CC and Others
8
and Chandler Coal (Pty) Ltd v Fruin.
9
On the basis of that survey he concludes a follows:
“
What
is one to make of these conflicting judgments which all followed from
that of
Maharaj
?
It appears to me that there are at least three important points that
should be emphasised.
While
summary judgment is an order which will prevent
a defendant from having his day in court, there are many cases where
the plaintiff is entitled to relief on the basis that, ex
facie the
papers which have been filed, there is no justification for
concluding that opposition can be regarded as anything
other than a
delaying tactic.
As
Corbett JA emphasises in
Maharaj
,
excessive formalism should be eschewed. Hence the substance of the
dispute, together with the purpose of summary judgment, needs
to be
taken into account during the evaluation of the papers which have
been placed before court in order to determine whether
the summary
form of relief should be justified.
While
a measure of commercial pragmatism needs to be taken into account,
in that many of the summary judgment applications are
brought by
large corporations and, accordingly, it may well be that first-hand
knowledge of every fact cannot and should not
be required, each case
must be assessed on the facts which were placed before the court.
It follows therefore that the nature
of the defence becomes the
starting point. For example, in
Maharaj
’s
case Corbett JA found that it was a borderline case but one which
fell on the right side of the border insofar as the
plaintiff /
applicant was concerned. On an evaluation of both the claim and the
defence, it could be concluded with justification
that the deponent
had sufficient knowledge to depose to the affidavit, which formed
the basis of the factual matrix to sustain
an application for
summary judgment.
By
contrast, there will be cases where, given the defence raised, some
further knowledge is required beyond an examination of the
documentation. In other words knowledge of a personal nature may be
required if it is relevant to the contractual relationship
as alleged
by the defendant and, if the defendant’s version is proved,
could constitute an adequate defence to the claim.”
10
I am in agreement with this analysis
.
It appears to strike the necessary balance between formalism and
pragmatism. The defendant in the present matter relied upon
the
somewhat complex suite of agreements and the wide range of parties
involved, to challenge the capacity of the deponent to
swear to the
requisite range of factual material. That criticism might have been
justified had the defendant raised a defence
on the merits which
pertained to the invalidity, interpretation or implementation of
that suite of agreements or something else
which required more from
the deponent by way of personal knowledge.
However, as will appear from the preceding
analysis of this judgment, the defendants do not dispute either
their indebtedness
in terms of the suite of agreements or the
quantum of their indebtedness under them. Rather, they sought to
raise a counterclaim,
the merits of which
were
conceded by the defendants, as being of no assistance to them.
In those circumstances, I am not persuaded that the deponent to the
affidavit supporting summary judgment lacked the requisite
knowledge
to do so.
I am fortified in my conclusion by the following
extract from the judgment of the Supreme Court of Appeal in
Joob
Joob Investment (Pty) Ltd v Stocks Mavundla Zek Joint Venture:
11
“
[32] The
rationale for summary judgment proceedings is impeccable. The
procedure is not intended to
deprive a
defendant with a triable issue or a sustainable defence of her / his
day in court. After almost a century of successful
application in
our courts, summary judgment proceedings can hardly continue to be
described as extraordinary. Our courts, both
of first instance and of
appellate level, have during that time rightfully been trusted to
ensure that a defendant with a triable
issue is not shut out. In the
Maharaj
case at 424G – 426E, Corbett JA, was keen to ensure, first, an
examination of whether there has been sufficient disclosure
by the
defendant of the nature and grounds of his defence and the facts upon
which it is founded. The second consideration is that
the defence so
disclosed must be both bona fide and good in law. A court which is
satisfied that this threshold has been crossed
is then bound to
refuse summary judgment. Corbett JA also warned against requiring of
a defendant the precision apposite to pleadings.
However, the learned
Judge was equally astute to ensure that recalcitrant debtors pay what
is due to a creditor.
[33] Having
regard to its purpose and its proper application, summary judgment
proceedings only hold terrors that are ‘drastic’
for a
defendant who has no defence. Perhaps the time has come to dis
card
these labels and to concentrate rather on a proper application of the
rule, as set out with customary clarity and elegance
by Corbett JA in
the
Maharaj
case at 425G – 426E.”
The defendants in this matter do not have a
triable issue or a sustainable defence to offer.
I accordingly grant summary judgment against –
the first and second defendants, jointly and
severally, the one paying the other to be absolved for:
payment of the sum of R3 721 956,42;
interest on the sum of R3 721 956,42 at the
rate of 9,30% per annum, compounded monthly in arrear from the 1
st
day of February 2012 to the date of payment;
costs of suit on the attorney and client scale;
against the first defendant that-
portion 5 of Erf 2176 Bryanston Township, Registration Division IR
in the Province of Gauteng and held by Certificate of Registered
Title No. T59756/2009, is declared specially executable;
the Registrar is authorised to issue a warrant of
execution against the immovable property as described in paragraph
35.2.1 above.
____________________
A C DODSON AJ
COUNSEL
FOR THE PLAINTIFF: A PULLINGER
INSTRUCTED BY:MOODIE & ROBERTSON, 7
TH
FLOOR, 209 SMIT STREET, BRAAMFONTEIN
COUNSEL
FOR THE 1
ST
AND 2
ND
DEFENDANT: JG BOTHA
INSTRUCTED
BY:
MINNAAR VENTER ATTORNEYS, C/O ROSSLEE &
LION-CACHET, 5 LEMON STREET, AUCKLAND PARK, JOHANNESBURG
HEARD:
23 OCTOBER 2012
JUDGMENT
DELIVERED: 26/10/12
1
2008 (4) SA 639
(C) at para 10.
2
The cases which are, in turn, relied on for
authority for the statements in this extract are
Trope
and Others v South African Reserve Bank
[1993] ZASCA 54
;
1993
(3) SA 264
(A) at 269 I;
Jowell v
Bramwell-Jones and Others
1998 (1) SA
836
(W) at 899 F-G;
General Commercial
and Industrial Finance Corporation Ltd v Pretoria Portland Cement Co
Ltd
1944 AD 444
at 454;
Wilson
v South African Railways and Harbours
1981
(3) SA 1016
(C) at 1019A.
3
2012 (3) SA 167
(WCC).
4
1976 (1) SA 418
(A).
5
2010 (5) SA 112
(KZP).
6
2011 (1) SA 196
(GNP).
7
GNP Case No. 23054/2011; [2011] ZAGPPHC 132; 1 August 2011.
8
GNP Case No. 32371/2010; [2011] ZAGPPHC 120; 22
July 2011.
9
WCC Case NO. 16850/11.
10
At 176H – 177E.
11
2009 (5) SA 1
(SCA).