Summary of Judgment

1. Introduction

The matter concerned an application for summary judgment brought in the High Court of South Africa, Gauteng Division, Johannesburg. The applicant was ABSA Bank Limited and the respondents/defendants were Moosa: Amina (first respondent), Moosa: Sayed Mohamed (second respondent), and Pek Investments CC (third respondent).

The application arose in the context of action proceedings in which ABSA claimed payment of two monetary amounts (described as Claim A and Claim B), together with interest and costs. The court was asked to determine whether the respondents had disclosed a bona fide defence sufficient to defeat summary judgment under the applicable summary judgment procedure.

The dispute centred on indebtedness said to arise from banking facilities granted to a principal debtor, and on the enforceability of the respondents’ liability as sureties and co-principal debtors. A key procedural and substantive feature of the case was that, in respect of Claim A, ABSA relied on a written agreement which it was unable to produce and annex to the summons, raising an objection based on Uniform Rule 18(6).

2. Material Facts

ABSA instituted two claims for payment. Claim A was for R7 327 035.45, and Claim B was for R2 043 024.58, together with interest and costs. The respondents’ liability was pleaded to arise from deeds of suretyship in terms of which the respondents bound themselves in solidum as sureties and co-principal debtors in favour of ABSA for the obligations of the principal debtor.

In relation to Claim A, ABSA pleaded that the claim arose from a written agreement concluded with the principal debtor, Pro Roll Corrugated Roofing CC, represented by the second respondent, in terms of which the principal debtor would operate a current account with ABSA. ABSA did not attach the specific agreement it alleged was concluded; instead, it annexed a standard-form agreement said to be the type usually entered into with clients.

The respondents disputed that they had concluded the agreement as pleaded and contended that ABSA’s summons (and thus the summary judgment application) was defective for failure to comply with Rule 18(6), which requires that where a claim is based on a contract, a copy of the contract must be annexed to the summons.

In relation to Claim B, ABSA relied on a written agreement that was annexed to the summons; the existence of that agreement was not disputed for purposes of the summary judgment application.

The court treated as material ABSA’s reliance on documentary material showing the relationship between ABSA and the principal debtor and the operation of the relevant account. This included that the principal debtor opened an account with ABSA on 3 August 2017, represented by the second respondent; that the term loan agreement between ABSA and the principal debtor pertained to the current account being operated between them; and that annexures “X1” to “X13” reflected transactions on the account.

In both claims, the court accepted as material that the respondents had agreed that a certificate issued by a manager of ABSA would constitute prima facie proof of the respondents’ indebtedness to ABSA.

On the procedural history relevant to the summary judgment hearing, the respondents delivered a notice of intention to oppose summary judgment on 24 August 2021, but delivered an answering affidavit only on 4 October 2021 at 16h38, when the matter was set down as unopposed for 5 October 2021. The court permitted the answering affidavit and stood the matter down to 7 October 2021.

3. Legal Issues

The central question was whether ABSA was entitled to summary judgment notwithstanding that, in respect of Claim A, it could not produce and annex the specific written agreement alleged to found the claim, as contemplated by Uniform Rule 18(6).

A related issue was whether the respondents had raised a bona fide defence (or a genuine dispute) sufficient to defeat summary judgment under the amended Uniform Rule 32, particularly where the respondents asserted that ABSA could not prove the identity of the principal debtor, could not produce the written agreement relied upon, and that a dispute of fact existed because ABSA would have to adduce secondary evidence of the agreement.

The dispute primarily concerned the application of legal rules to the pleaded and documentary facts, together with an evaluative judgment as to whether the respondents’ defences were genuine and advanced in good faith, or instead were capable of being rebutted on the papers and thus insufficient to resist summary judgment.

4. Court’s Reasoning

The court approached the Rule 18(6) objection by reference to authority holding that the failure to annex the agreement relied upon does not necessarily “erase” a cause of action. The court relied on the reasoning in ABSA Bank Ltd v Jenzen, Kevin Glynn; ABSA Bank v Grobbelaar (Case No. 2014/877 (GLD)), which accepted that a litigant who relies on a contract may prove its conclusion and terms by secondary evidence even where the document cannot be produced.

While the court recognised the caution expressed in that authority that a plaintiff should generally extricate itself at trial rather than by summary judgment where the contractual documentation is missing, the court also emphasised the further point in the same authority: summary judgment may remain available where the defendant’s challenge to the plaintiff’s version is of insufficient quality, meaning it is susceptible to rebuttal on the papers or is shown not to be bona fide.

The court then situated this approach within the post-amendment summary judgment framework described in Tumileng Trading CC v National Security and Fire (Pty) Ltd; E and D Security Systems CC v National Security and Fire (Pty) Ltd 2020 (6) SA 624 (WCC). That judgment was treated as explaining that what is decisive in summary judgment proceedings is the relief sought and whether the defendant has put up a basis showing that the merits must be tested at trial; correspondingly, the plaintiff must engage with the content of the plea to substantiate the contention that the defence is not bona fide and is raised for delay.

On the facts, the court considered ABSA to have rebutted the respondents’ denial that the principal debtor did not enter into an agreement identical to the pleaded standard agreement. The court treated as significant that the principal debtor opened an account with ABSA on 3 August 2017 represented by the second respondent, that the term loan agreement pertained to the current account being operated, and that the “X” annexures reflected transactions on that account. Against that documentary matrix, the court characterised the absence of a physical contract reflecting the identity of the principal debtor as a “red herring”, and concluded that the alleged dispute of fact was not genuine.

The court also reasoned that the respondents’ suretyship undertakings meant that, once the principal indebtedness was supported, the respondents were left without a defence to summary judgment. In addition, the court accepted that the certificates issued by ABSA constituted prima facie proof of indebtedness. The respondents’ query as to how an overdraft facility of R1 500 000.00 escalated to approximately R7 000 000.00 was held not to amount to a proper challenge to the certificate(s) for purposes of resisting summary judgment.

In relation to costs, the court distinguished between the merits and the consequences of late filing. It found no “deplorable conduct” in the manner the respondents conducted the proceedings generally, but held the respondents liable for the costs occasioned by the postponement on 5 October 2021 due to the belated delivery of their answering affidavit. The court indicated that the costs of 7 October 2021 would follow the result.

5. Outcome and Relief

The court granted summary judgment against all three defendants, jointly and severally, the one paying the other to be absolved, in respect of both claims.

For Claim A, the court ordered payment of R7 327 035.45, together with interest at 10.00% per annum, linked and capitalised monthly, from 2 May 2021 to date of final payment (both dates inclusive).

For Claim B, the court ordered payment of R2 043 024.58, together with interest at 7.00% per annum, linked and capitalised monthly, from 2 May 2021 to date of final payment (both dates inclusive).

The court ordered costs on the party-and-party scale. The court further indicated that the respondents would bear the costs emanating from the postponement of 5 October 2021 due to the late filing of the answering affidavit, and that the costs of 7 October 2021 would follow the result.

Cases Cited

ABSA Bank Ltd v Jenzen, Kevin Glynn; ABSA Bank v Grobbelaar (Case No. 2014/877 (GLD)).

Tumileng Trading CC v National Security and Fire (Pty) Ltd; E and D Security Systems CC v National Security and Fire (Pty) Ltd 2020 (6) SA 624 (WCC).

Legislation Cited

No legislation was cited in the judgment.

Rules of Court Cited

Uniform Rules of Court, Rule 18(6).

Uniform Rules of Court, Rule 32.

Held

The court held that the failure to annex the specific written agreement relied upon for Claim A, as contemplated by Rule 18(6), did not on its own preclude summary judgment where the plaintiff could rely on other material and where the defendants’ denial was rebutted on the papers and shown not to be bona fide.

The court held that the respondents’ asserted disputes regarding the identity of the principal debtor and the existence of the pleaded agreement did not amount to a genuine dispute of fact on the papers, given the account-opening evidence, the link to the term loan agreement, and the account transaction annexures.

The court held further that the respondents, having bound themselves as sureties and co-principal debtors, and having agreed that ABSA’s manager’s certificate would constitute prima facie proof of indebtedness, did not raise a sufficient defence to resist summary judgment. Summary judgment was accordingly granted for both claims, with interest and party-and-party costs, and with additional adverse costs consequences flowing from the late filing that caused the initial postponement.

LEGAL PRINCIPLES

A plaintiff’s failure to annex a contract to particulars of claim as contemplated by Uniform Rule 18(6) does not necessarily eliminate the cause of action where the plaintiff may prove the contract’s conclusion and terms by secondary evidence, and where the defendant’s denial is capable of being rebutted on the papers.

Under the amended Uniform Rule 32 summary judgment procedure, a plaintiff seeking summary judgment is required to engage with the pleaded defence and demonstrate that it is not bona fide and is raised merely for purposes of delay; conversely, a defendant resisting summary judgment must disclose a basis showing that the defence warrants a trial. A purported dispute of fact will not defeat summary judgment if, on the papers, it is not a genuine dispute and the defence is clearly negated.

Where defendants have bound themselves in solidum as sureties and co-principal debtors, and where the parties have agreed that a creditor’s managerial certificate constitutes prima facie proof of indebtedness, a challenge that does not properly engage with that certificate may be insufficient to establish a bona fide defence to summary judgment.