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[2015] ZASCA 88
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South African Land Arrangements CC & Others v Nedbank LTD (20063/2014) [2015] ZASCA 88 (29 May 2015)
SUPREME
COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not
Reportable
Case
No: 20063/2014
In
the matter between:
SOUTH
AFRICAN LAND ARRANGEMENTS CC First
Appellant
GUIDO
LOUIS MARC MARIEN
Second
Appellant
ANNE
JOSEPHA LOUIS DELAET Third
Appellant
and
NEDBANK
LIMITED
Respondent
Neutral
citation:
South African Land Arrangements CC &
Others
v
Nedbank
LTD
(20063/2014)
[2015] ZASCA 88
(29
May 2015).
Coram:
Mhlantla, Majiedt, Pillay and Mbha JJA and Van der Merwe AJA
Heard:
05
May
2015
Delivered:
29 May 2015
Summary:
Civil procedure–summary
judgment–defence–counterclaim–reliance on agreement
which never came into operation–not
bona fide defence–summary
judgment correctly granted.
ORDER
On
appeal from:
Western Cape Division of
the High Court, Cape Town (Griesel and Samela JJ sitting as court of
appeal):
1
The application for the postponement of the appeal is dismissed with
costs on an attorney and client scale.
2
The appeal is dismissed with costs on an attorney and client scale.
JUDGMENT
Mhlantla
JA (Majiedt, Pillay and Mbha JJA and Van Der Merwe AJJA concurring):
[1]
This appeal, with special leave of this court, arises from summary
judgment proceedings in the Magistrates’ Court, Somerset
West
launched by Nedbank Limited (the bank) against South African Land
Arrangements CC (the first appellant), Guido Louis Marc
Marien and
Anne Josepha Louis Delaet (the second and third appellants
respectively). An appeal to the Western Cape Division of
the High
Court, Cape Town (per Griesel J and Samela J concurring) against the
summary judgment granted in the magistrates’
court, was
dismissed. It is against this decision that the appellants appeal to
this court.
[2]
The appeal concerns two issues. First, whether leave to adduce
further evidence in the form of a written agreement should be
granted. Second, whether the appellants have set out sufficient facts
to establish a defence on the merits and in the form of a
counterclaim. The background is set out hereafter.
[3]
During July 2009 the bank concluded a loan agreement with the first
appellant in terms of which the bank lent and advanced to
the first
appellant an amount of R1 250 000 on various terms. The
bank also granted the first appellant an overdraft
facility with a
limit of R365 000 which was later increased to R667 000. A
mortgage bond over the property of the first
appellant was registered
in favour of the bank. The second and the third appellants signed
deeds of suretyship guaranteeing the
first appellant’s
obligations to the bank.
[4]
The first appellant defaulted with the repayment of the loan capital
and exceeded the limit of the overdraft facility. As a
result the
bank instituted action in the magistrates’ court, against the
first appellant as principal debtor as well as against
the second and
third appellants in their capacities as sureties. The bank claimed an
amount of R1190 590.27, being the balance
on the loan, and R725
966.75 in respect of the overdraft facility. The appellants entered
an appearance to defend.
[5]
Upon the expiry of the dies, the bank applied for summary judgment.
The appellants opposed this application. In their opposing
affidavit,
the appellants admitted that they were indebted to the bank but
averred that the amounts were not yet due. They further
alleged that
they had a counterclaim which was in excess of the amounts claimed by
the bank. The appellants’ defence was
that the facility
agreement relied upon by the bank had been superseded by a credit
restructuring agreement dated 28 June 2010
(the restructuring
agreement). In terms of this agreement, the first appellant would be
replaced by another entity, Seasons Find
593 CC (Seasons Find), as
principal debtor. Furthermore the appellants alleged that the bank
had breached the terms of that agreement
and that they had demanded
from the bank payment of an amount of R2 800 000. In support of
this allegation, a letter of demand
which had been sent to the bank
was annexed to the opposing affidavit. This was their counterclaim to
the bank’s claims.
[6]
After the application was heard, the magistrate concluded that the
appellants had no bona fide defence to the bank’s claim
and
granted summary judgment. An appeal against the magistrate’s
decision was dismissed by the Western Cape Division of the
High
Court, Cape Town. Griesel J held that the restructuring agreement was
subject to suspensive conditions and these had not been
fulfilled. He
concluded that that agreement never came into effect and therefore
the appellants had failed to disclose a defence.
[7]
In the circumstances that will be described later, the appeal in this
court proceeded in the absence of the appellants’
counsel after
their application for the postponement of the appeal was dismissed
with costs. In the result, this court when considering
the issues in
the appeal, had regard to the appellants’ heads of argument
which were filed on 6 October 2014.
[8]
Regarding the first issue, the appellants in their heads of argument
sought leave to adduce further evidence, in the form of
the
restructuring agreement. They contended that the said document was
erroneously omitted and should have been attached to the
affidavit
opposing summary judgment. They further submitted that their legal
representative had referred to this agreement during
the hearing of
the summary judgment application and the magistrate had deprived them
of an opportunity to tender this written agreement
in evidence.
[9]
Section 19
of the
Superior Courts Act 10 of 2013
empowers a court on
hearing an appeal to receive further evidence. It is incumbent upon
an applicant for leave to adduce further
evidence to satisfy the
court that it was not owing to any remissness or negligence on his or
her part that the evidence was not
adduced at the trial
[1]
.
[10]
In this case, no application was launched for leave to present a
supplementary affidavit to introduce the restructuring agreement.
The
appellants could have done so in the Magistrate’s Court in
terms of
Rule 55
[2]
. Furthermore
no proper application was launched in this court. Instead, the
appellants raised this issue in their heads of argument.
No
explanation has been furnished for the failure to tender the document
save to state that the restructuring agreement was erroneously
omitted from the record. In my view, that explanation is insufficient
and does not constitute exceptional circumstances. In the
result, the
application to adduce further evidence must fail.
[11]
In my view, the granting of leave to adduce further evidence would,
in any event, not have assisted the appellants in that
the
restructuring agreement relied upon was not signed by all the parties
and it was subject to suspensive conditions or ‘conditions
precedent’. In this regard, the first appellant and Seasons
Find were obliged to provide various documents, amongst others;
their
financial statements, auditor’s certificates, cession of
certain insurance policies, suretyships by the second and
third
appellants as well as by a third party. Furthermore they were
required to register a first covering bond over certain immovable
property in favour of the bank. It is common cause that the
suspensive conditions were never fulfilled, and that therefore the
restructuring agreement never came into existence.
[12]
This then brings me to the next question, that is, whether the
appellants disclosed a bona fide defence and in particular whether
their counterclaim can be regarded as a defence that is good in law.
Rule 14 of the Magistrates’ Courts Rules and which
is similar
to Uniform rule 32 of the Superior Courts enables the plaintiff to
apply for summary judgment where the claim is:
(a)
on a liquid document;
(b)
for a liquidated amount in money;
(c)
for delivery of a specified movable property; or
(d)
for ejectment,
together
with any claim for interest and costs. The defendant, on the other
hand, must set out a defence that is bona fide and good
in law and
also disclose fully the nature and grounds of his or her defence.
[13]
The legal principles governing summary judgment proceedings are
well-established. In
Maharaj
v
Barclays
National Bank Ltd
,
[3]
Corbett JA outlined the
principles and what is required from a defendant in order to
successfully oppose a claim for summary judgment
as follows:
‘…
[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 had “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]
Regarding the remedy provided by summary judgment proceedings, Navsa
JA said in
Joob
Joob Investments (Pty) Ltd
v
Stocks
Mavundla Zek Joint Venture
[4]
:
‘
[31]…The
summary judgment procedure was not intended to “shut a
defendant out from defending”, unless it was
very clear indeed
that he had no case in the action. It was intended to prevent sham
defences from defeating the rights of parties
by delay, and at the
same time causing great loss to plaintiffs who were endeavouring to
enforce their rights. [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 applications in
our courts, summary judgment
proceedings can hardly continue to be
described as extraordinary.’
[15]
Where a counterclaim is put up as a defence, a full disclosure of the
nature and the grounds of the counterclaim as well as
the material
facts upon which a defendant relies must be made in order for it to
be successful in a defence
[5]
.
[16]
In this case the appellants relied on their counterclaim as a
defence. They contended that the bank had breached the terms
of the
restructuring agreement in that it prevented the first appellant from
accessing its available funds and that it closed all
the banking
facilities of Seasons Find in breach of the agreement. The appellant,
however, did not provide any facts supporting
the allegation of the
breach.
[17]
On the appellants’ own version they admit that they are
indebted to the bank. Furthermore on their own version they admit
that the restructuring agreement never came into effect. This is so
because that agreement was subject to suspensive conditions
which
were not fulfilled. It follows that an agreement that never came into
effect cannot be breached. No reliance can be placed
on this contract
and the alleged breach thereof. The appellants’ reliance on
this non-existent contract is misplaced and
the counterclaim falls
away. In the result, the defence raised by the appellant is not bona
fide. Therefore, I am satisfied that
the court a quo was correct when
it dismissed the appeal against the grant of summary judgment. The
appeal falls to be dismissed.
[18]
Insofar as the costs are concerned, counsel for the bank advised the
court from the bar that clause 17 of the agreement concluded
by the
parties made provision that all legal costs shall be on an attorney
and client scale. An order to that effect will be made.
[19]
It remains for me to deal with the issue of the application for the
postponement of the appeal. The appeal in this court was
heard on
Tuesday 5 May 2015. On the day before the hearing of the appeal, the
appellants filed an application for a postponement
of the appeal.
This application was supported by an affidavit deposed to by the
second appellant. The bank opposed the application.
After considering
argument the application was dismissed with costs. Mr Lubbe, who
represented the appellants, excused himself
from the proceedings
stating that he held no instructions with regard to the appeal. As
previously indicated, the appeal thereafter
proceeded in the absence
of appellants’ representative.
[20]
It is apposite at this stage to consider the principles governing the
grant or refusal of postponements. In
National
Police Service Union & others
v
Minister
of Safety and Security & others
,
[6]
Mokgoro J held that a
postponement of a matter set down for hearing on a particular date
cannot be claimed as of right. An applicant
for a postponement seeks
an indulgence from the court and must show that there is good cause
for the postponement. The applicant
must furnish a full and
satisfactory explanation of the circumstances that gave rise to the
application. Lastly, whether a postponement
will be granted is in the
discretion of the court and cannot be secured by mere agreement
between the parties.
[21]
In
McCarthy
Retail
v
Shortdistance
Carriers CC
,
[7]
Schutz JA said:
‘
A
party opposing an application to postpone an appeal has a procedural
right that the appeal should proceed on the appointed day.
It is also
in the public interest that there should be an end to litigation.
Accordingly in order for an applicant for a postponement
to succeed,
he must show a “good and strong reason” for the grant of
such relief…’
[22]
The Constitutional Court restated these principles in
Lekolwane
& another
v
Minister
of Justice and Development,
[8]
where it held:
‘
The
postponement of a matter set down for hearing on a particular date
cannot be claimed as a right. An applicant for a postponement
seeks
an indulgence from the court. A postponement will not be granted,
unless this Court is satisfied that it is in the interests
of justice
to do so. In this respect the applicant must ordinarily show that
there is good cause for the postponement. Whether
a postponement will
be granted is therefore in the discretion of the court. In exercising
that discretion, this Court takes into
account a number of factors,
including (but not limited to) whether the application has been
timeously made, whether the explanation
given by the applicant for
postponement is full and satisfactory, whether there is prejudice to
any of the parties, whether the
application is opposed and the
broader public interest.’
[23]
In this matter, the application for a postponement was filed in court
on the eve of the hearing of the appeal. The second appellant
furnished an explanation that their advocate had returned his brief
on 21 April 2015 and their attorney, Mr Osborne, had withdrawn
on 28
April 2015 after he was not successful in engaging new counsel to
argue the appeal on short notice. The second appellant,
however,
failed to take the court into his confidence and set out the steps he
took to obtain the services of new attorney and
counsel, nor did he
provide the reason for Mr Osborne’s withdrawal, who continued
to act for the appellants in other matters
before the high court.
Regarding counsel’s withdrawal, the second appellant merely
stated that counsel who previously attended
to the matter was
involved in a dispute with Mr Osborne. It is worth mentioning that
the notice of withdrawal prepared by the attorney
stated that the
appellants had terminated the mandate. This explanation differs from
the explanation provided by the second appellant
under oath.
[24]
In the result the applicant has failed to provide a full and
satisfactory explanation of the circumstances that gave rise to
the
application. The application on this ground alone had to fail.
[25]
In addition to the abovementioned factor it became clear to the court
that the appellants had no intention of proceeding with
the appeal in
view of their responses to the respondent when the issue of a
postponement was raised between the parties. In this
regard it is
apposite to refer to the decision of Harms JA in
Take
and Save Trading CC & others
v
Standard
Bank of SA Ltd,
[9]
where he said:
‘
A
supine approach towards litigation by judicial officers is not
justifiable either in terms of the fair trial requirement or in
the
context of resources. One of the oldest tricks in the book is the
practice of some legal practitioners, whenever the shoe pinches,
to
withdraw from the case (and more often than not to reappear at a
later stage), or of clients to terminate the mandate (more
often than
not at the suggestion of the practitioner), to force the court to
grant a postponement because the party is then unrepresented.
Judicial officers have a duty to the court system, their colleagues,
the public and the parties to ensure that this abuse is curbed
by, in
suitable cases, refusing a postponement. Mere withdrawal by a
practitioner or the mere termination of a mandate does not,
contrary
to popular belief, entitle a party to a postponement as of right.’
[26]
This is precisely what transpired in this case. The second appellant
raised every possible excuse in an attempt to have the
appeal
postponed. He initially relied on the withdrawal of their legal
representatives. When he was advised that he could engage
another
team of legal representatives from Cape Town or Bloemfontein, he
responded that there was insufficient time to do that.
When it was
then brought to his attention that he, as a member of the first
appellant, could represent it and himself, he furnished
a bizarre
explanation that the first appellant had since April 2015 been
converted into a company and since directors were not
allowed to
appear on behalf of companies, he could not attend court. There is
however no confirmation from the Registrar of the
Companies and
Intellectual Property Commission of the first appellant’s
conversion. Regarding his appearance, he stated that
he had to appear
in the court a quo in respect of other applications (this turned out
to be interlocutory applications where his
presence was not
required). Strangely enough, Mr Osborne who had withdrawn in this
matter, was representing the appellants in those
applications. The
third appellant, in her affidavit, deposed that she was ill and
annexed a doctor’s certificate dated 28
April 2015. Curiously,
the diagnosis was that she suffered from general anxiety disorder and
that she should not be exposed to
any form of stress or to appear
before any court. It is clear that the appellants tried every trick
in the book to get the appeal
to be postponed.
[27]
On the other hand, the interests of the bank had to be considered.
The bank would be severely prejudiced by the postponement
as it would
not obtain final determination of its claim and payment of a debt
that has been outstanding since 2011.
[28]
It was for these reasons why the postponement was refused. For
purposes of completeness, I intend to include an order in respect
of
the appellants’ application for a postponement.
[29]
Consequently, I make the following order:
1
The application for the postponement of the appeal is dismissed with
costs on an attorney and client scale.
2
The appeal is dismissed with costs on an attorney and client scale.
__________________
NZ
MHLANTLA
JUDGE
OF APPEAL
APPEARANCES
:
For
Appellant:
E L Lubbe
Instructed
by:
Thomas Wilks Inc
Stellenbosch
c/o
Van Pletzen Lambrechts Attorney
Bloemfontein
For
Respondent:
C W Kruger
Instructed
by:
Van der Spuy Attorneys
Cape
Town
c/o
Hill, McHardy & Herbst Inc,
Bloemfontein
[1]
De
Aguiar
v
Real
People Housing (Pty)
Ltd
2011
(1) SA 16
(SCA) at para 11.
[2]
Rule
55 (1) (
a
)
of the Magistrates’ Courts Rules provides:
55
Applications
(1)(a)
Every application shall be brought on notice of motion supported by
an affidavit as to the facts upon which the applicant
relies for
relief.’
[3]
Maharaj
v
Barclays
National Bank Ltd
1976
(1) SA 418
(A) at 426 A-D.
[4]
Joob
Joob Investments (Pty) Ltd
v
Stocks
Mavundla Zek Joint Venture
2009
(5) SA 1 (SCA).
[5]
Soil
Fumigation Services Lowveld CC
v
Chemfit
Technical Products
2004
(6) SA 29
(SCA) at para 10.
[6]
National
Police Service Union & others
v
Minister
of Safety and Security & others
2000
(4) SA 1110
(CC) at 1112C-F.
[7]
McCarthy
Retail Ltd
v
Shortdistance
Carriers CC
[2001]
3 All SA 482
(A) para 28.
[8]
Lekolwane
& another
v
Minister
of Justice and Constitutional Development
2007(3) BCLR 280 (CC) para 17.
[9]
Take
and Save Trading CC & others
v
Standard
Bank of SA Ltd
2004
(4) SA 1
(SCA) at para 3.