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[2020] ZAGPJHC 427
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Business Partners Limited v Securo Traders (Pty) Ltd and Others (31039/2019) [2020] ZAGPJHC 427 (1 December 2020)
SAFLII
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Certain
personal/private details of parties or witnesses have been
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IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, JOHANNESBURG)
CASE
NO
: 31039/2019
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
NOT
REVISED
1
DECEMBER 2020
In
the matter between:
BUSINESS
PARTNERS
LIMITED Applicant
And
SECURO
TRADERS (PTY)
LTD First
Respondent
(Registration
Number 2007/020841/07)
SHAUN
GRANT Second
Respondent
(Identity
Number […])
ADELE
GRANT Third
Respondent
(Identity
Number […])
OSTIPROP
1216 (PTY)
LTD Fourth
Respondent
(Registration
Number 2002/0185886/07)
SECURO
SYSTEMS
CC Fifth
Respondent
(Registration
Number 1998/060599/23)
JUDGMENT
COWEN,
AJ:
Introduction
[1] This
is an application for summary judgment. The applicant is Business
Partners Limited. The applicant seeks
judgment against the
respondents, jointly and severally, for payment of the sum of
R819 129.64 with interest and costs. It
also seeks judgment
against the fourth respondent declaring certain immovable property in
Oakdene, Johannesburg, specially executable
in favour of the
plaintiff. Only the fourth respondent opposes the application.
[2] The
applicant’s claim is for repayment of a loan it made to the
first respondent. The amount loaned was
R3 million. The loan
agreement is not subject to the provisions of the
National Credit Act
34 of 2005
. As security for the loan, the second, third, fourth and
fifth respondents all concluded suretyship agreements in terms of
which
they bound themselves as sureties and co-principal debtors for
the first respondent’s debt. As additional security for the
amount advanced, the fourth respondent caused a mortgage bond to be
registered over certain immovable property, being the subject
of the
summary judgment order sought.
[1]
Following the first defendant’s default in payment, and in
September 2019, the applicants instituted action proceedings to
reclaim the outstanding debt. The fourth respondent entered a notice
of intention to defend the proceedings and, on 14 May 2020,
filed a
plea.
[3] In
the plea, it is alleged that the first and fifth respondents have
been liquidated and the second and third
respondents sequestrated.
The fourth respondent pleads further that while it was unaware of the
first respondent’s indebtedness
when summons was issued, it
immediately placed the property on the open market for sale. An offer
to purchase in the amount of
R1 200 000 was forthcoming and
on 26 March 2020, the purchaser obtained an approved mortgage loan
for the amount of R1 100 000.
It pleads further that it
will shortly be in a position to pay the debt and that any judgment
granted against it would render it
insolvent.
[4] The
applicant instituted summary judgment proceedings on 3 June 2020. On
3 August 2020, the application came
before Judge Yacoob on the
unopposed roll. The matter was removed from the roll as it had become
opposed: the fourth respondent
had filed an opposing affidavit on 28
July 2020. In the opposing affidavit, the fourth respondent again
explains that the property
has been sold in order to satisfy the
first respondent’s debt to the applicant. The affidavit goes on
to explain that on
20 July 2020, fourth respondent’s attorneys
presented the applicant’s attorney with two guarantees that
were issued
by ABSA Bank in favour of the applicant for the amounts
of (a) R819 129.64 plus interest and (b) R280 870.36
(representing
R1 100 000 less the capital amount and
interest), to be paid into the fourth respondent’s attorney’s
trust
account on the date of registration. The fourth respondent
filed a supplementary affidavit on 20 November 2020 deposed to by a
Mr Christiaan Morton. Mr Morton is an attorney at CCM attorneys and
is both the attorney of record acting on behalf of the fourth
respondent in these proceedings and the attorney attending to the
transfer of the property mandated by the fourth respondent. Mr
Morton
explains that there has been an unexpected delay in the transfer of
the property which relates to obtaining municipal clearance
figures
and explaining the steps taken on behalf of the fourth respondent to
obtain them and to speed up the process. Mr Morton
explains that in
September 2020, the municipality informed him that it would take
three months to issue the rates clearance figures
and that transfer
is thus likely to take place during January 2021. The affidavit
sought to emphasise that it is not the fourth
respondent who is
delaying transfer.
[5] The
application came before me on 25 November 2020 on the opposed roll.
Ms Markram-Jooste appeared for the
applicant. Mr Nel appeared for the
fourth respondent. The application was argued by video-conference on
Microsoft-Teams in view
of the ongoing COVID-19 pandemic.
[6] Mr
Nel conceded that the fourth respondent does not have a defence to
the claim. Rather, he submitted that
his client has, by way of
production of the two guarantees, provided security as contemplated
by
Rule 32
and that in these circumstances the Court should grant an
order postponing the application to allow the security to be
realised.
In the alternative he submitted that the Court should
postpone the application for three months to allow for the transfer
of the
property and payment of the debt. Ms Markram-Jooste submitted
that the guarantees do not constitute security as contemplated by
Rule 32
having regard to the purpose of the Rule and the nature of
the guarantees. To the extent that the Court is inclined to afford
the
applicant any indulgence to allow the transfer of the property to
go through, she submitted that this would appropriately be
accommodated
by granting summary judgment and suspending the Court’s
order in terms of
Rule 45A
of the Rules of Court.
[7] Two
issues arise for decision:
(a) Whether
the fourth respondent has provided adequate security to the
plaintiff as contemplated
by
Rule 32
as amended.
(b) If
not, whether the court should postpone the application or suspend its
order in view of the imminent
transfer of the property and resultant
availability of funds to settle the fourth respondent’s debt to
the plaintiff.
Security
[8] Rule
32 (3) of the Uniform Rules provides that: ‘
Upon the hearing
of an application for summary judgment, the defendant may (a) give
security to the plaintiff to the satisfaction
of the Court for any
judgment including costs which may be given
’.
[9] Ms
Markram Jooste, on behalf of the applicant, did not take issue with
the amounts that are subject to the
ABSA guarantees and accepted that
the amounts guaranteed are adequate for purposes of Rule 32. Rather,
she submitted that the guarantees
do not serve the purposes of Rule
32 and are in any event inadequate to meet the demands set out in the
summons because they are
bank guarantees provided at the behest of a
third party, the purchaser. Thus, if for any reason the sale and
transfer does not
proceed, they will fall away. She submitted further
that while there is no reason to believe that the sale and transfer
will not
proceed, there is only scant information before the Court
regarding the imminent sale as the sale agreement is not attached and
nothing is known of the purchaser and the circumstances of the sale.
Mr Nel, for the fourth respondent submitted that the security
provided was adequate as it effectively constitutes an
acknowledgement of debt and the transferring attorney would be
obliged
to pay the monies owed, once received, to the applicant.
[10] In
my view, it is not necessary for me to decide whether the facts that
the guarantees are provided at the
behest of a third party and serve
to guarantee that third party’s liability to the fourth
respondent on transfer, are bars
to the successful invocation of Rule
32(3)(a) in this case. This is because even if there is no such bar,
there is inadequate information
upon which this Court can evaluate
whether there is any real risk that the sale agreement might fail,
with the result, as Ms Markram-Jooste
pointed out, the guarantees
would simply fall away. I accordingly conclude that on the facts of
this case the fourth respondent
has in any event failed to satisfy
the Court that the guarantees can provide satisfactory security.
The
second issue: postponement or suspension
[11] As
mentioned, Mr Nel accepted that the fourth respondent has no defence
to the claim. The remaining issue
is whether this court should make
provision to allow the transfer to go through as expected in January
2020 either by postponing
the application for summary judgment or by
granting summary judgment but suspending its order in terms of Rule
45A. Mr Nel urged
the court to adopt the former course and postpone
the matter for three months. One consideration, he submitted is the
adverse consequences
for the fourth respondent’s credit record
should judgment be entered against it in circumstances where he is
not to blame
for the delays. Mr Nel emphasised that the conduct of
the fourth respondent was of a party seeking to honour its
obligations and,
importantly, that the delay in transfer was not of
the fourth respondent’s making. Ms Markram-Jooste submitted
that the Court
should adopt the latter course, grant summary judgment
and suspend an order for a period of three months. She submitted that
it
is desirable that the credit industry is aware of the credit
worthiness of corporate bodies. The parties were
ad idem
that
if the Court were to adopt the former course and postpone the
application, the applicant would be entitled to the costs of
suit to
date including in respect of appearances on 25 November 2020.
[12] In
my view, the application for summary judgment should be postponed for
a limited period (no more than three
months) to allow the transfer to
go through. On the information before me the fourth respondent has,
since the institution of proceedings
when it became aware of the
debt, sought diligently to honour its obligations and is not to blame
for the delay in transfer. Through
attorneys, it has sought third
party assistance to progress matters with the municipality. The
delays have, furthermore, occurred
in circumstances of the COVID-19
pandemic which has presented public and private bodies alike with
unprecedented challenges. The
parties’ respective submissions
on the fourth respondent’s creditworthiness may have
theoretical traction, but the
Court is not apprised with sufficient
information upon which to assess whether, factually, the balance of
interests weighs in favour
of the fourth respondent or the applicant
in this regard. Notably, however, the applicant accepts that the
property is probably
worth more than the current sale value reflects.
Moreover, the fourth respondent has conceded that it should pay the
applicant’s
costs of suit to date claimed on an attorney and
client scale in line with what was contractually agreed.
[13] I
make the following order:
(a) The
application for summary judgment is postponed
sine die.
(b) The
applicant may re-enrol the application after the lapse of a period of
three months from the date
of this order.
(c) The
respondents / defendants are ordered, jointly and severally, to pay
the applicant’s costs
to date, including costs of suit and
costs of the summary judgment application, on an attorney and client
scale.
S
COWEN (Ms)
ACTING
JUDGE OF THE HIGH COURT
GAUTENG
LOCAL DIVISION, JOHANNESBURG
Electronically
submitted therefore unsigned
The
judgment was prepared and authored by the Judge whose name is
reflected and is handed down electronically by circulation to
the
Parties/ legal representatives by email and by uploading it to the
electronic file of this matter on Case lines. The date for
hand down
is deemed to be 1 December 2020.
Date
of hearing: 25
November 2020
Judgment
delivered: 1 December 2020
APPEARANCES:
In
the case number 34482/2018
For
the Applicant: Adv
Markram-Jooste
Instructed
by: Strydom
Britz
Mohalatsi Inc
For
the Respondent: Adv Nel
Instructed
by: CMM
Attorneys
Inc
[1]
In light of
FirstRand
Bank Limited v Folscher and another and Similar matters
2011(4) SA 314 (GNP), t
he
encumbered property cannot serve as a primary residence, fourth
respondent being a juristic person.