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[2020] ZAGPJHC 235
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Business Partners Limited v Mmadi and Others (19/26939) [2020] ZAGPJHC 235 (8 October 2020)
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Certain
personal/private details of parties or witnesses have been
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REPUBLIC
OF SOUTH AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
GAUTENG LOCAL DIVISION,
JOHANNESBURG
(1)
REPORTABLE:
NO
(2)
OF
INTEREST TO OTHER JUDGES: NO
(3)
REVISED.
Case No: 19/26939
In the matter
between:
BUSINESS
PARTNERS
LIMITED
Plaintiff
(Reg No.
1981/000918/06)
and
ALBERT
DINTJANE
MMADI
First Defendant
(I.D No.
[….])
A&J
PROPERTY DEVELOPMENT (PTY)
LTD
Second Defendant
(Reg. No.
2013/095012/07)
REAGETSWE
TRADING AND WASTE MANAGEMENT
SERVICES
CC
Third Defendant
(Reg No.
2005/052400/23)
BABINO
TLOU TRADING & PROJECTS
CC
Fourth Defendant
(Reg. No.
2006/063521/23)
This
judgment was handed down electronically by circulation to the
parties’ legal representatives by email. The date and time
for
hand-down is deemed to be 10h00 on
8 October 2020
JUDGMENT
INGRID OPPERMAN J
Introduction
[1]
This is an application for leave to appeal
against summary judgment granted by this court on 10 February
2020.
[1]
This judgment should be read with the 10 February
2020 one (‘
the judgment’
).
The parties are referred to as in the main action. The applicants for
leave to appeal are the defendants in the action. They
seek leave to
appeal against the whole of the judgment. All abbreviated
descriptions used herein are defined in the judgment.
[2]
I had expressed my concern about the length
of time it took for this application for leave to appeal to be
brought to my attention.
It took some time to get to the bottom of
that enquiry. It would appear that the disruptions that Covid-19
brought to the functioning
of the courts might have had some role to
play. It is not ideal for applications for leave to appeal to be
heard after such long
delays. It is a simple matter to contact the
registrar of the Judge who heard the matter, which obligation is not
only that of
the party seeking leave to appeal, but also the
obligation of the party who has obtained judgment and resisting the
application
for leave to appeal.
[3]
Ms Nkosi-Thomas, representing the
defendants herein and who was not the counsel who had argued the
summary judgment application,
very properly offered to make enquiries
from her instructing attorney and to cause an affidavit to be filed
dealing with these
concerns. I declined this kind offer as much
correspondence was exchanged in the run up to the hearing and it
would appear that
the use of correspondents and messages not being
communicated properly or at all, further compounded matters and
delayed the hearing
of this application and finality must be served.
The Test
[4]
In the decision of
Dexgroup
(Pty) Ltd v Trustco Group International (Pty)
Ltd and Others
[2]
,
Wallis JA observed that a court should not grant leave to appeal, and
indeed is under a duty not to do so, where the threshold
which
warrants such leave, has not been cleared by an applicant in an
application for leave to appeal. In paragraph [24] he held
as
follows:
“
[24]
For those reasons the court below was correct to dismiss
the challenge to the arbitrator's award and the appeal must
fail. I should however mention that the learned acting judge did not
give any reasons for granting leave to appeal. This is unfortunate
as
it left us in the dark as to her reasons for thinking that it enjoyed
reasonable prospects of success. Clearly it did not. Although
points
of some interest in arbitration law have been canvassed in this
judgment, they would have arisen on some other occasion
and, as has
been demonstrated, the appeal was bound to fail on the facts.
The
need to obtain leave to appeal is a valuable tool in ensuring that
scarce judicial resources are not spent on appeals that lack
merit
.
It should in this case have been deployed by refusing leave to
appeal.” (emphasis added)
[5]
It has been suggested that the legislature
has deemed it appropriate to raise the bar by providing in section 17
of the Superior
Courts Act 10 of 2013 (‘
the
Superior Courts Act’
) that what
an applicant in an application for leave to appeal should show is
that the appeal ‘
would
’
have reasonable prospects of success not ‘
might
’. It has also been suggested
that the legislature did no such thing and in fact simply restated
the test, which had application
prior to the amendment. I will assume
for purposes of this application, and in favour of the defendants
[3]
,
that the lower test has application.
Full payment or partial payment?
[6]
The defendants accept that they defaulted
in their payment obligations on 1
June 2019 and 1 July 2019 but contended that these defaults were
purged on 15 July
2019 and 3 August 2019 in full.
Despite
valiant efforts on the part of counsel she could not change the
facts. The facts are revealed in the affidavit filed by
defendants.
What they admit of the case against them and what they reveal in the
case that they try to make out, lays the foundation
for the Court’s
decision. Counsel cannot do much about that. The facts reveal that
once defendants defaulted the plaintiff
acquired rights. The payments
made subsequent to default did not change that picture. The late
payments reduced the balance outstanding,
they did not even amount to
payment in full (contrary to what defendants averred), the payments
made after the defaults did not
affect the rights of the plaintiff to
seek the remedy and to be granted the relief that it obtained in this
matter.
[7]
The defendants accepted that the common
cause facts recorded in para [1] of the judgment had been correctly
stated by this Court.
Thus, the monthly instalments of R393 637.27
increased to R429 585 in May 2019. The instalments due for 1 June
2019, 1 July 2019
and 1 August 2019 were R429 585 per month,
totalling
R1 288 755.
[8]
The defendants paid R393 758.02 on 15 July
2019
[4]
and R800 000 on 3
August 2019
totalling
R1 193 758.02,
an
amount of R94 996.98 short of what they were obliged to have paid if
these amounts were for the months of June, July and August
2019 as
stated in the affidavit resisting summary judgment.
[9]
The statement in the affidavit
to
the effect that the amount due for these three months had been paid
in full
is patently wrong and not
bona
fide
as the defendants had short paid
and did not explain this inaccuracy at all. This reflects on their
bona fides.
[10]
If, however, the transaction history
[5]
,
the accuracy of which was not disputed at any stage during these
proceedings, is analysed, the statement is patently false for
the
following reasons:
25.05.2019 instalment –
R429 585
No payment in May 2019 other
than a dishonoured payment.
25.06.2019 instalment –
R429 585
No payment in June 2019 other
than a dishonoured payment.
25.07.2019 instalment –
R429 585
A dishonoured payment and the
15.07.2019 payment of R393 758.02
The 5.08.2019 payment of R 800
000
[11]
As at 16 August 2019 there was still R94
996.98 owing on the July 2019 instalment ((R429 585 x 3) –
(R393 758.02 + R800 000)
= R 94 996.98).
[12]
If one attempts to reconcile the version
advanced in the affidavit resisting summary judgment with the
transaction history, the
following should be added:
25.08 2019 instalment –
R420 007.94
Payment 2.09.2019 – R400
000
May, June, July and August 2019
instalments = R1 708 762.94
Payments honoured = R1 593
758.02
Shortfall =
R115 004.92
[13]
On any construction of the facts, the
version advanced by the defendants in paras 9 and 10 of the affidavit
resisting summary judgment,
is, at best, not
bona
fide
and at worst, patently false as it
is not supported by the common cause facts.
[14]
The defendants’ suggestion
seems to be that a court is obliged to accept what a respondent says
in an affidavit resisting
summary judgment without question. I do not
understand a court’s obligation to be that but rather that a
court is to interrogate
the submissions against the limited
admissible and common cause facts available to it at that stage of
the proceedings
Legal position if partial payment had been accepted as at 16
August 2019
[15]
The defendants argued that by accepting
partial payment, the plaintiff ‘
blew
hot and cold
’, put differently,
it approbated and reprobated. In my view, the plaintiff did no such
thing. It did not elect to cancel
the loan agreement. It elected to
keep the loan agreement intact and to accelerate payment in terms of
clause 27 of the loan agreement
following upon the common cause
breaches of the defendants.
Acceptance of
the subsequent payments did not amount to a ‘change in
direction’, (a change of intention) the plaintiff
was going in
one direction only and that was the direction of getting paid. The
payments were accepted not as condonation of default
but as a
diminution of the outstanding balance.
If there were
discussions about condonation, compromise or negotiations to restore
defendants to their pre-default status these
would have to have been
placed before the Court in documentary form. Mere acceptance of
payment in the modern age of electronic
banking does not demonstrate
a change of intention and it is too flimsy an event to build a case
of compromise on.
[16]
The authorities relied upon by the
defendants all deal with the acceptance of rent or an instalment in
the context of an election
to cancel;
there
was no election to cancel here, there was only an election to
enforce.
[17]
I can see nothing inconsistent with the
plaintiff’s election to accelerate payment by accepting partial
payment – this
is not a situation of ‘
taking
one road and then turn[ing] back and take[ing] another…’
[6]
This is particularly so where the parties had
expressly agreed as follows:
34.2 No representation,
variation, modification, consensual cancellation,
waiver
of or
consent
to depart from any provision
of this Agreement shall
be of any force or effect unless confirmed in writing and signed by
the parties.
A written
representation, variation,
modification, cancellation,
waiver
or consent
signed by the
parties shall be effective only in the specific instance and for the
purpose and to the extent of which it was made
or given.
35
WAIVER
35.1 The Borrower’s duties
and obligations in terms of this Agreement shall not be affected if
Business Partners grants an
extension of time or any other
indulgence, or if Business Partners performs any of the Borrower’s
obligations on his behalf.
No alleviation or concession on the part
of Business Partners shall be regarded as a waiver or tacit amendment
of any of Business
Partners’ rights in terms of this
Agreement.’
Compelling reason – conflicting judgments
[18]
The defendants argue that in two other
matters, involving the same creditor and in circumstances similar to
this case, summary judgment
was refused.
[19]
In
Business
Partners Ltd v Rajna Towers & Another
[7]
,
Senyatsi AJ assessed the facts serving before him. Collis J, also did
so in
Business Partners Ltd v K201426876
(South Africa)(Pty)Ltd
[8]
.
They both found, amongst other factual conclusions, that on the
agreements and affidavits before them the allegations of a compromise
constituted defences, which were good in law.
[20]
Although pressed for the legal principles,
which allegedly were at variance with the principles applied in this
case, none were
forthcoming. There is no principle which has
crystallised and which has been distilled and/or applied differently
in those cases
to the one under consideration.
[21]
The conflicting judgments which
section
17(1)(b)
of the
Superior Courts Act envisages
are not, in my view,
judgments where different factual conclusions were found to exist.
The conflicting judgments referred to in
the
Superior Courts Act
should
, if they are to receive the attention of a Higher Court deal
with matters of law, not rest on different facts. Despite being
pressed
to do so during argument, no differing legal principles were
distilled to merit troubling a Higher Court on this ground of appeal.
[22]
Mr Toma, who argued the case at summary
judgment stage without the assistance of his senior, had not argued
the ‘
compromise
’
point at all. The issues argued at summary judgement phase were those
identified in paragraph [4] of the judgment.
[23]
The provisions of the loan agreement
[9]
under consideration clearly precludes reliance on
this defence. Now that the situation has become more grave the
defendants have
had to ‘dig deep’ for defences. Their
counsel have done so valiantly but ultimately they cannot do any
better than
play the hand that the facts of the matter give them. Had
it been argued, as it now has, I would have to have found that it
does
not constitute a defence in law. This is because the terms of
the loan agreement prescribe certain formalities
[10]
for a compromise to be proved. There is no written
compromise agreement. There is no written waiver. There simply are no
written
documents before this court signed by both parties
substantiating any other agreement – let alone one of
compromise. This
is what the parties had agreed to and there is
nothing else that can change that conclusion before this court. There
exists thus
no triable issue on this front.
[24]
There is however, another reason why this
defence of ‘compromise’ should be rejected, and that is
that it is on another
basis lacking in
bona
fides
: what the defendants argued
initially and what they had said under oath, was not that reliance on
the acceleration clause was compromised,
but rather that clause 27 of
the loan agreement did not constitute an acceleration clause
at
all,
as, on a proper construction of
such clause, all the acceleration clause entitled the plaintiff to
do, argued defendants, was to
charge an increased interest rate. This
argument was not pursued in the application for leave to appeal. So,
although this court
was criticized in the heads of argument for
interpreting clause 27 of the loan agreement at summary judgment
stage, it was not
argued that such interpretation was wrong. In fact,
the contrary occurred: the point was effectively abandoned. The
court’s
construction of the clause was accepted as correct. The
application for leave to appeal was argued on the basis that clause
27
entitled the plaintiff to accelerate payment provided there was
compliance with the law. Acceleration
was
justified by the late payments, no subsequent conduct nor any
interpretation changed that conclusion.
Discretion
[25]
Reliance was placed on the
Mowschenson
[11]
case for the proposition that summary judgment is
an extraordinary remedy. In
Joob Joob
Investments (Pty) Ltd
[12]
the
Supreme Court of Appeal held that the ‘
rationale
for summary judgment proceedings is impeccable
’
and that ‘
(a)fter almost a century
of successful application in our courts, summary judgment proceedings
can hardly continue to be described
as extraordinary
.’
[26]
Having found that there were no
bona
fide
defences, which were good in law
the defendants nonetheless argued that this court ought to have
exercised its discretion in favour
of the defendants and refused
summary judgment. In my view, the material facts in the defendants’
affidavit together with
the transaction history militates against the
exercise of such discretion. The transaction history reveals that
almost without
fail, every month from inception of the loan
agreement, the defendants made payments, which were dishonoured. It
is difficult to
conceive what defences might emerge at a future
trial. When prompted to identify facts, which ought to have
influenced this discretion,
the amount involved was mentioned. In my
view, that consideration is irrelevant. The legal principles in
relation to the exercise
of a discretion in summary judgment
proceedings are the same irrespective of the amount involved.
Conclusion and Order
[27]
I accordingly find that there are no
reasonable prospects of success. The plaintiff has sought punitive
costs, which follow from
the provisions of clause 18 of the deeds of
suretyship. This is a contractually agreed term.
[28]
I accordingly grant the following order:
The application for leave to appeal is refused with costs as between
attorney and client payable by the first to fourth applicants
(defendants in the action), jointly and severally, the one paying the
other to be absolved.
I OPPERMAN
Judge of the High Court
Gauteng Local
Division, Johannesburg
Counsel
for the applicants/defendants: Adv L Nkosi-Thomas SC and Adv K. Toma
Instructed
by: Van Deventer Campher Inc
Counsel
for the respondent/plaintiff: Adv CL Markram-Jooste
Instructed
by: Strydom Britz Mohulatsi Inc
Date
of hearing: 27 August 2020
Further
heads of argument: 11 and 15 September 2020
Date
of Judgment: 8 October
2020
[1]
The Judgment erroneously records that the
date of the hearing was 4 February 2019 and that judgment was handed
down on 10 February
2019. Although the dates and the months are
correct, it all occurred during 2020 and not 2019.
[2]
2013 (6) SA 520 (SCA)
[3]
The defendants did not contend that a
lower test applied – the application was argued on the higher
threshold.
[4]
Annexure ‘MM1’ -
Caselines – 076-14
[5]
Caselines – 026-23
[6]
Angehrn & Piel v Federal
Cold Storage Co. Ltd
,
1908 TS 761
at
786
[7]
[2018] ZAGPPHC 349 (1 March
2018)
[8]
[2018] ZAGPPHC
[9]
quoted in para [17]
hereof.
[10]
Brisley
v Drotsky
(432/2000)
[2002] ZASCA 35 (28 March 2002) per Cameron JA (as he then was) who,
on the subject of clauses in agreements limiting
valid variations of
the agreement only to those variations recorded in writing
(non-variation clauses also referred to as ‘
Shifren
clauses’), said:
“
[2] ….
This
Court nearly four decades ago upheld the validity of [non-variation]
clauses. It did so after some years of academic
and judicial
controversy, and after full argument, which canvassed the opposing
contentions. Its decision expressly considered
the paradox at the
core of [non variation clauses]: that they limit contractual
freedom, but do so by the prior design and agreement
of the parties
themselves, in the exercise of their contractual freedom, and
in order to enhance certainty in their future
dealings and to
minimise disputes between them.
[3]
The appellant’s attack invites us to reconsider that decision.
We are obliged to do so in the light of the Constitution
and of our
general obligation, which is not purely discretionary,
to
develop the common law in the light of fundamental constitutional
values. For the reasons the joint judgment gives, I do not
consider
that the attack can or should succeed. The Shifren decision
represented a doctrinal and policy choice which,
on balance, was
sound. Apart from the fact of precedent and weighty considerations
of commercial reliance and social certainty,
that choice in itself
remains sound four decades later. Constitutional considerations of
equality do not detract from it. On
the contrary, they seem to me to
enhance it. As the joint judgment observes (para 7), it is
fallacious to suggest that insistence
on only written alterations to
a contractual regimen necessarily protects the strong at the expense
of the weak. In many situations
the reverse is likely to be true.”
(footnotes
excluded)
[11]
Mowschenson
and Mowschenson v Mercantile Acceptance Corporation of SA Ltd
,
1959 (3) SA 362
(W)
[12]
Joob Joob
Investments (Pty) Ltd v Stocks Mavundla Zek Joint Venture
,
2009 (5) SA 1
(SCA)