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[2014] ZASCA 38
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Rees and Another v Investec Bank Limited (330/13) [2014] ZASCA 38; 2014 (4) SA 220 (SCA) (28 March 2014)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case
No: 330/13
In
the matter between
DEAN
GILLIAN
REES
..................................................................
FIRST
APPELLANT
EDWARD
CHRISTOPHER JOWITT
....................................
SECOND
APPELLANT
and
INVESTEC
BANK
LIMITED
.............................................................
RESPONDENT
Neutral
citation:
Dean Gillian Rees v
Investec Bank Limited
(330/13)
[2014]
ZASCA 38
(28 March 2012)
Coram:
Mthiyane DP, Lewis, Ponnan, Maya and
Saldulker JJA
Heard:
20 FEBRUARY 2014
Delivered:
28 MARCH 2014
Summary:
Summary Judgment – Rule 32(2) –
Affidavit in support of application for summary judgment complying
with the requirements
of the sub rule– Deponent employee of
bank – averring facts obtained in the ordinary course of her
duties as employee
of bank – Personal knowledge of every fact
not required.
ORDER
On
appeal from:
South Gauteng High Court
(Johannesburg), Hutton AJ sitting as court of first instance.
The
appeal is dismissed with costs, such costs to include the costs of
two counsel.
JUDGMENT
Saldulker
JA (Mthiyane DP, Lewis, Ponnan, Maya JJA concurring):
[1]
This is an appeal against the judgment and order by Hutton AJ in
summary judgment proceedings in the South Gauteng High Court
(Johannesburg) on 5 March 2013. The appeal is with the leave of the
high court .
[2]
Described by Hutton AJ as a ‘work of epic proportions’,
the combined summons issued by the respondent, Investec
Bank Limited
(Investec) against the first appellant, Dean Gillian Rees (Mr Rees),
the second appellant, Edward Christopher Jowitt
(Mr Jowitt), and
Benjamin Henry Jowitt NO, in his capacity as trustee of the Aljebami
Trust (the trust), runs into some 250 pages,
consisting of 14 claims
in all, set out in the particulars of claim from claim A to claim
N.
[1]
The claims are supported
by annexures which in turn run into some 770 pages, consisting of
loan agreements, mortgage bonds, deeds
of
suretyships
,
certificates of balances and so on. The aggregate of these claims
excluding interest amounts to R34 050 118.
[3]
The claims are based on an agreement between Investec and 12
principal debtors, each of which is a company. Two of the principal
debtors feature in two claims each. In all but one of the claims,
Claim G, the alleged principal indebtedness arises from one or
more
loan agreements entered into between Investec and the principal
debtor, secured by a mortgage bond. Claim G is based simply
on an
agreement of loan in existence between Investec and the principal
debtor. Mr Rees and the trust are alleged to be sureties
for the
indebtedness of the principal debtor in each of the claims. Investec
pleaded that either a default judgment had been taken
against the
relevant principal debtors or that the principal debtors had been
wound up.
[4]
After the appellants gave notice of their intention to defend the
action, Investec launched summary judgment proceedings against
the
first and second appellants: the latter is alleged to be a surety in
respect of claims E and J only. The trust was not included
in that
application and for present purposes this appeal does not concern the
Aljebami trust.
Verifying
affidavit
[5]
The application for summary judgment was supported by an affidavit by
Ms Mirielle Ackermann, who is employed as a recoveries
officer by
Investec. It is necessary to quote her affidavit in full, which
reads:
‘
1.
I am an adult female
Recoveries Officer
employed as such by the applicant at 100 Grayston Drive, Sandton.
2. I am duly
authorised to bring this application and depose to this affidavit on
behalf of the applicant. I refer in this regard
to the resolution of
the applicant annexed hereto marked “
A”
.
3.
In my capacity
as Recoveries Officer
, I have in my possession and under my
control all of the applicant’s records, accounts and other
documents relevant to the
claims forming the subject matter of the
action instituted against the respondents under the above case number
(“
the action”
).
4.
In the
ordinary course of my duties as Recoveries Officer and having regard
to the applicant’s records, accounts and other
relevant
documents
in my possession and under my control, I have acquired
personal knowledge of the respondents’ financial standing with
the
applicant and I can swear positively to the facts alleged and the
amounts claimed in the applicant’s particulars of claim.
5. I hereby verify
5.1
the causes of action set out in the applicant’s particulars of
claim;
5.2
that, on the grounds set out therein, the respondents are indebted
to the applicant in the amounts claimed by it.
6. In my opinion,
the respondents –
6.1 do not have a
bona fide
defence to the action; and
6.2
they have delivered a notice of intention to defend the action solely
for purpose of delay.’ (my emphasis.)
[6]
In response the appellants filed an affidavit by Mr Rees resisting
summary judgment. It stated:
‘
8.
It is clear from the affidavit in support of summary judgment that Ms
Ackermann derives her
knowledge of the
case solely from files, books of account
and other documents in her possession.
9. I am advised and
accept the
advice that it has been held that where a
deponent
acquires her knowledge solely from
documents to which she had
access
, she cannot swear positively to the facts.
10. I deny that Ms
Ackermann has personal
knowledge of the financial standing
of
the Respondents with the Applicant.
11. I submit further
that Ms Ackermann did not,
during any of the times when the
various suretyships in this matter were concluded, have any dealings
with the Respondents
.
12. Ms Ackermann
also did not sign any of the
certificates of indebtedness upon
which the Applicant bases its claims.
13. Having regard
to the case law on this issue, I am advised and submit that the
Applicant has failed to comply with the requirements
of Rule 32(2) of
the Uniform Rules of Court as the deponent to the affidavit in
support of the application for summary judgment
does not have
personal knowledge of the facts of the matter and cannot verify the
causes of action and the amounts claimed.
14. Importantly, Ms
Ackermann is also unable to affirm that the Respondents have no
bona
fide
defence to the action.
15.
For these reasons alone I submit that the application for summary
judgment ought to be dismissed with costs and the Respondents
granted
leave to enter into the merits of the action.” (my emphasis.)
[7]
After having considered the affidavits filed in the matter, and
applying the principles laid down in
Maharaj
v Barclays National B
an
k
Ltd
1976
(1) SA 418
(A) and certain other authorities,
[2]
Hutton AJ granted summary judgment in favour of Investec in
respect of 13 of the 14 claims. Leave to defend was granted to
Mr
Rees in respect of claim D as the suretyship that Investec relied
upon in support of that claim was allegedly not signed
by Mr
Rees. Investec also did not persist in its claim in respect of its
various prayers for penalty interest.
[8]
The primary contention advanced on behalf of the appellants is that
Ms Ackermann was not a person who could ‘swear positively
to
the facts’ as envisaged in rule 32(2).
[9]
Rule 32(2) provides that the plaintiff’s notice of application
for summary judgment shall be accompanied by
‘
an
affidavit made by himself or by any other person who can swear
positively to the facts verifying the cause of action and the
amount,
if any, claimed and stating that in his opinion there is no bona fide
defence to the action and that notice of intention
to defend has been
delivered solely for the purpose of delay’.(
My
emphasis.)
The
applicable law
[10]
In
Maharaj,
[3]
Corbett JA in considering the requirement that the affidavit should
be made by the plaintiff himself ‘or by any other person
who
can swear positively to the facts’ stated:
‘
Concentrating
more particularly on requirement (
a
)
above, I would point out that it contemplates the affidavit being
made by the plaintiff himself or some other person “who
can
swear positively to the facts”.
In the latter event, such other person’s
ability
to swear positively to the facts is essential
to
the effectiveness of the affidavit as a basis for summary judgment;
and the Court entertaining the application therefor must
be
satisfied, prima facie, that the
deponent is such a person.
Generally
speaking, before a person can swear positively to facts in
legal
proceedings they must be within his personal knowledge.
For this reason
the practice has been
adopted, both in regard to the present Rule 32 and in regard to some
of its provincial predecessors (and the
similar rule in the
magistrates’ courts), of requiring that a deponent to an
affidavit in support of summary judgment, other
than the plaintiff
himself, should state, at least, that the facts are within his
personal knowledge (or make some averment to
that effect),
unless such direct knowledge appears from other facts stated . . .
The mere assertion by a deponent that
he “can swear positively to the facts” (an assertion
which merely reproduces the
wording of the Rule) is not regarded as
being sufficient, unless there are good grounds for believing that
the deponent fully appreciated
the meaning of these words. . .
In my view, this is a salutary practice.
While
undue formalism in procedural matters is always to be eschewed
,
it is important in summary judgment applications under Rule 32 that,
in substance, the plaintiff should do what is required of
him by the
Rule. The extraordinary and drastic nature of the remedy of summary
judgment in its present form has often been judicially
emphasised . .
. The grant of the remedy is based upon the supposition that the
plaintiff’s claim is unimpeachable and that
the defendant’s
defence is bogus or bad in law. One of the aids to ensuring that this
is the position is the affidavit filed
in support of the application;
and to achieve this end it is important that the affidavit should be
deposed to by either by the
plaintiff himself or by someone who has
personal knowledge of the facts.
Where
the affidavit fails to measure up to these requirements, the defect
may, nevertheless, be cured by reference to other documents
relating
to the proceedings which are properly before the Court. . .The
principle is that, in deciding whether or not to grant
summary
judgment, the Court looks at the matter “at the end of the day”
on all the documents that are properly before
it….
’
(My emphasis.)
[11]
In
Barclays
National Bank Ltd v Love
[4]
(quoted with approval in
Maharaj
at 424B-D) the following is said:
‘
We
are concerned here with an affidavit made by the manager of the very
branch of the bank at which overdraft facilities were enjoyed
by the
defendant. The nature of the deponent’s office in itself
suggests very strongly that he would in the ordinary course
of his
duties acquire personal knowledge of the defendant’s financial
standing with the bank. This is not to suggest that
he would have
personal knowledge of every withdrawal of money made by the defendant
or that he personally would have made every
entry in the bank’s
ledgers or statements of account;
indeed,
if that were the degree of personal knowledge required it is
difficult to conceive of circumstances in which a bank could
ever
obtain summary judgment.’
(My
emphasis.)
[12]
Since
Maharaj,
the requirements of rule 32(2) have, from time to time, occupied the
attention of our courts.
[5]
In
Shackleton
Credit Management (Pty) Ltd v Microzone Trading 88 CC & another
2010
(5) SA 112
(KZP), para 13, it was held that:
‘
[F]irst-hand
knowledge of every fact which goes to make up the applicant’s
cause of action is not required
, and
that where the applicant is a corporate entity, the deponent may well
legitimately rely on records in the company’s
possession for
their personal knowledge of at least certain of the relevant facts
and the ability to swear positively to such facts.’
(My
emphasis.)
Did
the Ackermann affidavit meet the requirements of rule 32?
[13]
Here Investec had issued a combined summons annexed to which was a
comprehensive particulars of claim setting out the cause
of action
against the appellants, supported by written agreements concluded
with the principal debtors in each instance and suretyship
agreements
concluded with sureties on the terms set out in the agreements.
Investec thus had either obtained judgment against the
principal
debtor or the principal debtor had been wound up at the instance of
Mr Rees. Those occurrences operated as the trigger
for Investec to
proceed on the suretyship agreements against the appellants.
Moreover, the suretyships provided for a certificate
of balance
to be issued by the relevant bank manager of Investec, which would
either serve as a liquid document or constitute prima
facie proof of
the sureties’ indebtedness. It is against that backdrop that Ms
Ackermann’s affidavit must be viewed.
[14]
Ms Ackermann relied on the information at her disposal which she
obtained in the course of her duties as the bank’s recoveries
officer, to swear positively to the contents of her affidavit. It is
not in dispute that in the discharge of her duties as such
she would
have had access to the documents in question and upon a perusal of
those documents she would acquire the necessary knowledge
of the
facts to which she deposed in her affidavit on behalf of Investec.
Prior to the institution of the action Ms Ackermann
had been
corresponding with the appellant’s attorney in regard to the
principal debtors’ delinquent accounts and had
also addressed
letters of demand to them, receiving letters in response which
canvassed the appellants’ defences. She could
thus ‘swear
positively to the facts’, ‘verify the cause of action and
the amount claimed’ and assert that
in her opinion the
appellants did ‘not have a
bona
fide
defence to the action’ and
had entered an appearance to defend ‘solely for the purposes of
delay’. These factors
show that the requirements set out in
Mahara
j
are met.
[15]
The fact that Ms Ackermann did not sign the certificates of
indebtedness nor was present when the suretyship agreements were
concluded is of no moment. Nor should these be elevated to essential
requirements, the absence of which is fatal to the respondent’s
case.
[6]
As stated in
Maharaj
,
‘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.
[16]
The fact that leave to defend was granted in respect of Claim D does
not mean as was suggested in argument that Ms Ackermann
was
untruthful and that her affidavit must be rejected in its entirety.
It is clear that Ms Ackermann acquired her knowledge from
documents
under her control. She thus had the requisite knowledge as required
by rule 32(2). In making such a finding Hutton AJ
did not err.
[17]
Turning to Mr Rees’ affidavit filed in opposition to the
application for summary judgment, what emerges is that he does
not
dispute that: (a) A plethora of loan agreements had been concluded
between the principal debtors and Investec; (b) mortgage
bonds had
been registered against various immovable properties as security for
Investec’s debts; (c) various deeds of suretyships
had been
concluded as additional security for Investec’s debts; and (d)
each of the principal debtors had defaulted on its
obligations to
Investec.
[18]
The thrust of the appellants’ case is encapsulated in the
following excerpt from Mr Rees’ affidavit:
‘
Once
the Respondents, being essentially removed sureties, have had the
opportunity seek and obtain proper discovery and further
particulars, they would be in a better and proper position to raise
all the defences available to them against the Applicant’.
[19]
What exactly is meant by the expression ‘removed sureties’
is not explained. What does emerge later in the affidavit,
which on
the face of it appears to put paid to the suggestion that he was a
‘removed surety’ is this:
‘
In
an attempt to gain some closure and access documentation relative to
the principal debtors, I instructed my attorneys to apply
for the
winding-up of the majority of the companies referred to in the claims
with the intention that their assets could in due
course be sold by
the liquidator to discharge their indebtedness to the Applicant. In
2010 and 2011, the principal debtors referred
to in Claims E to L
were wound up by the Court. In July 2010, the principal debtors
referred to in claims B and C were wound up
by way of voluntary
resolutions of the members.’
[20]
Mr Rees’ affidavit is replete with conjecture and speculation
for which no factual foundation is advanced. Mr Rees has
contended
that the appellants and principal debtors have been prejudiced
inasmuch as they have been denied access to their accounts
which
have been frozen by Investec, and which, so it is contended, occurred
in breach of the banker/customer relationship.
The freezing of those
bank accounts has never been challenged by any of them on the basis
that Investec’s conduct was unlawful.
In any event a perusal of
all of the documentary evidence reveals that Mr Rees was the alter
ego of many of the corporate entities
involved in this case and
intimately involved in their affairs. He was in most instances the
signatory of the agreements in question.
[21]
The court below correctly reasoned that what is striking about Mr
Rees’ affidavit is the lack of any allegation that
the
principal debtors would, but for Investec’s alleged breach of
the banker/customer relationship, have been in a position
to
discharge their indebtedness to Investec. The fact is that each of
the principal debtors defaulted on its obligations to Investec
and no
defence to the claims against them have been raised.
[22]
In my view Mr Rees was sparse with the truth and deliberately vague.
Hutton AJ aptly put it: ‘The manner in which Mr
Rees has put up
his contentions in this regard seems to me to be the work of a man
attempting, as best as possible, to expose himself
on as narrow a
front as possible.’ His claim of prejudice thus rings hollow
and appears to smack of desperation as indeed
does his assertion that
Ms Ackermann’s affidavit lacks effectiveness for the grant of
summary judgment.
[23]
The appellants argued that summary judgment, which deprives a
defendant of the opportunity to raise its defence in trial
proceedings,
should be granted only exceptionally: it is said to be a
drastic procedure. However, as was stated by Navsa JA in
Joob
Joob Investments (Pty) Ltd v Stocks Mavundla Zek Joint Venture
:
[7]
‘
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 at appellate
level, have during
that time rightly been trusted to ensure that a defendant with a
triable issue is not shut out. In the
Maharaj
case at 425G-426E, Corbett JA was keen to ensure, first, an
examination of whether there has been sufficient disclosure by a
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.
Having
regard to its purpose and its proper application, summary judgment
proceedings only hold terrors and are “drastic”
for a
defendant who has no defence. Perhaps the time has come to discard
these labels and to concentrate rather on the proper application
of
the rule, as set out with customary clarity and elegance by Corbett
JA in the
Maharaj
case at 425G-426E.’
[24]
Looking at the matter at the ‘“end of the day” on
all the documents that [were] properly before it’,
[8]
it cannot be said that the high court erred in granting summary
judgment against the appellants.
[25]
In view of the aforegoing, the result is that the appeal must fail.
The following order is made:
‘
The
appeal is dismissed with costs, such costs to include the costs of
two counsel.’
HK
SALDULKER
JUDGE
OF APPEAL
APPEARANCES
For Frist and Second
Appellant: E L THERON
Routledge
Modise Inc, Johannesburg
Matsepes
Inc, Bloemfontein
For Respondent: A P
RUBENS SC, A J MICHAEL
Werksmans
Inc, Johannesburg
Symington
& De Kok, Bloemfontein
[1]
Claim
A – Plankjol (Pty) Ltd; Claim B – Diepdwang (Pty) Ltd;
Claim C – Friedshelf 690 (Pty) Ltd; Claim D –
Before
Sunset Properties 40 (Pty) Ltd; Claim E – Silver Armor
Properties (Pty) Ltd; Claim F – Built Up Estates (Pty)
Ltd;
Claim G – Aish 2 Ou Bottling (Pty) Ltd; Claim H – Aish 2
Ou; Claim I – Friedshelf 715 (Pty) Ltd; Claim
J –
Riversong Wildlife Estates (Pty) Ltd; Claim K –
Friedshelf 714 (Pty) Ltd; Claim L – Redeal (Pty)
Ltd.
[2]
Standard
Bank of SA Ltd v Secatsa Investment (Pty) Ltd & others
1999
(4) SA 229
(C);
Barclays
National Bank Ltd v Love
1975
(2) SA 514
(D
);
FirstRand Bank Ltd v Huganel Trust
2012
(3) SA 167 (WCC).
[3]
At
423A-H.
[4]
Barclays
National Bank Ltd v Love
1975
(2) SA at 514 (D) at 516H-517A.
[5]
See
Shackleton
Credit Management (Pty) Ltd v Microzone Trading 88 CC & another
2010 (5) SA 112
(KZP);
FirstRand
Bank Limited v Beyer
2011 (1) SA 196
(GNP);
Mowschenson
and Mowschenson v Mercantile Acceptance Corporation of SA Ltd
1959 (3) SA 362
(W);
Jefrrey
v Andries Zietsman (Edms) Bpk
1976 (2) SA 870
(T);
Standard
Bank of South Africa Ltd v Han-Rit Boerdery CC & others
[2011] JDR 0870(GNP);
Standard
Bank of South Africa Ltd v Kroonhoek Boerdery & others
(1 August 2011) Case No 23054/2011 (GNP);
ABSA
Bank Ltd v Le Roux 2013
JDR
2283 (WCC).
[6]
Standard
Bank of South Africa Ltd v Kroonhoek Boerdery & Others
(1
August 2011) Case No 23054/2011, para 13 (GNP).
[7]
Joob
Joob Investments (Pty) Ltd v Stocks Mavundla Zek Joint Venture
2009 (5) SA 1
(SCA) paras 32 & 33.
[8]
Maharaj
at
423H.