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[2010] ZAGPPHC 637
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Standard Bank of South Africa Ltd v Smith; Standard Bank of South Africa Ltd v Strydom (42393/09 , 42395/09) [2010] ZAGPPHC 637 (18 June 2010)
IN
THE HIGH COURT OF SOUTH AFRICA
(NORTH
GAUTENG HIGH COURT, PRETORIA)
CASE
NUMBER: 42393/09 & 42395/09
NOT
REPORTABLE
DATE:
18 JUNE 2010
In the matters
between:
THE STANDARD BANK OF
SOUTH AFRICA
LTD
........................................................
PLAINTIFF
And
CORNELIUS MICHAEL
SMITH
.....................................................................................
DEFENDANT
And
THE STANDARD BANK OF
SOUTH AFRICA
LTD
......................................................
PLAINTIFF
And
JOHAN
STRYDOM
........................................................................................................
DEFENDANT
JUDGMENT
TLHAPI J:
[1] These are
applications for summary judgment Plaintiff's claim arose out of
deeds of suretyship entered into by the parties on
the 12 May 1998
and 12 May 2005. It was agreed between the parties that judgement in
the first application would be applicable
to the second This judgment
shall therefore only deal with facts in the application under Case
Number: 42393/09.
[2] In respect of
the first matter the defendant bound himself as surety and
coprincipal debtor for the payment when due of all
the debts of EPW
Farming Enterprises CC ( the CC ). later converted into a company
known as Schumba Rest Lodge (Pty) Ltd ( the
company'). According to
the plaintiff the
National Credit Act 34 of 2005
was not applicable
to the transaction entered into by the parties. As at the 25 July
2009 the defendant was indebted to the plaintiff
in respect of three
separate accounts in the amount of R125 000.00 (account 411374540),
R892 493.62 (account 411310143) and R1
500 000.00 (account
411246801). respectively The total amount claimed was R2 517 493.62
plus interest at a rate of 11 5% per annum
compounded monthly from 25
July 2009 to date of payment and costs on attorney/own client scale.
Annexed to the summons was the
Deed of Suretyship, letter of demand
and the certificates of balance making up the total amount.
[3] The defendant
opposed the application on the following grounds:
3.1 The particulars
of claim did not disclose a cause of action in that the plaintiff
failed to allege whether the agreement was
concluded orally or in
writing; and. when and where such agreement was entered into and, by
whom the parties were represented when
the agreement was concluded
The summons was therefore an irregular step in terms of
Rules 18(6)
read with
Rule 18
(12) and
Rule 30
of the Rules of court.
3.2 Paragraph 7 of
the particulars of claim alleged that demand for payment was made on
sums as set out in 5.1 to 5.3 of the particulars
of claim whereas
such clauses do not appear in the said particulars: Furthermore that
the Deed of Suretyship dated the 12 May 2005
and relied upon by the
plaintiff was not annexed to the summons, instead a different one.
dated 12 May 1998 was annexed. The summons
were therefore vague and
embarrassing or excipiable:
3.3 The pleadings
were not technically correct;
3.4 The deponent to
the affidavit for summary judgment failed to state that she had
verified the facts relied upon in order to bring
the application
It was unclear from
the affidavit whether the plaintiff relied upon one or more causes of
action as mentioned in paragraphs 6.1
to 6 3 of the particulars of
claim and the cause of action based on the suretyship The affidavit
referred to the verification of
a cause of action in the singular It
was therefore unclear which of the causes of action had been
verified. Furthermore, the deponent
only stated that she was in
'possession' of the files and failed to verify that she had
acquainted herself of the contents of the
files and documents,
consequently, on her own version, she could not claim to have
personal knowledge of the matter
3.5 The affidavit
supporting summary judgement and dated the 27 October 2009 referred
to a notice of application to which it was
annexed. The notice of
application served on the defendant was dated the 30 November 2009
and this could not have been the one
referred to in the affidavit
signed by the deponent on the 27 October 2009.
3.6 The defendant
was entitled to be released from the suretyship in that the plaintiff
had acted to his prejudice by extending
large amounts of credit to
the company and the following reasons are given:
3.6.1 During 1998 to
2003 the defendant and one Mr Strydom conducted farming operations
under the CC, holding 90% and 10% members
interest respectively and
during which time their accounts and facilities were held with the
plaintiff at its Brits branch They
were the only ones who were
entitled to act on behalf of the CC and were signatories to its
accounts. The CC became dormant during
2003 when the farming
operations ceased to exist and at that time all liabilities with the
bank were settled.
3.6.2 The plaintiff
was aware that the defendant had resigned as member of the CC when
during 2005. Mr Strydom. Mr Kirchner and
a Mr Hofmeyer used the
dormant CC to purchase land for the purpose of opening a spa in the
bushveld near Nylstroom Kirchner and
Strydom had acquired a 75% and
25% members interest in the CC respectively. The CC was then
converted into the company. The said
company ran up huge debts with
the Plaintiff for which fresh suretyships were signed by Strydom and
Hofmeyer and a bond registered
over the property, and the plaintiff
was aware that this all was done without the knowledge of the
defendant.
[4] In order to
succeed the court must be satisfied that the plaintiffs claim was
clear and that the defendant had failed to present
such fact to
enable the court to conclude that there was reasonable probability of
something emerging at trial which would enable
the defendant to
properly defend his case, Gulf Steel (Pty) Ltd v Rack-Rite Bop (Pty)
Ltd
1998 (1) SA 679
(O) at 683 H-J and Visser v Incorporated General
Insurance Ltd 1994(1) SA 472 (T) at 478H.
[5] The purpose of
utilizing a combined summons is to present detailed particulars as to
the cause of action. In a combined summons
the particulars of claim
constitute pleadings, the requirements of which are governed by the
provisions of
rule 18
(6) and as such have to comply with the rule,
which is peremptory The plaintiff cannot avoid the consequences of
its failure to
conform to the rule The surety dated the 12 May 2005
was also referred to as such in the letter of demand dated 30 July
2009 This
letter preceded the issue of summons on the 29 October 2009
The defendant admits to being surety but explained that subsequent to
him relinquishing interest in the CC and company a fact of which the
plaintiff was aware of. fresh suretyships were entered into
with
other individuals for debts the defendant was not aware of. Although
in my view, this allegation alone cannot be said to absolve
the
defendant in considering the application for summary judgement the
court cannot be uncertain regarding the details relating
to the
contract which was entered into especially where more detail was
required to be given in terms of
rule 18(6)
The defendant, in this
instance correctly submitted that an irregular step was taken and
that ordinarily it would succeed if it
engaged the process as
envisaged under
rules 18(12)
and
30
of the Rules ofCourt
[6] It would be
difficult, given the lack of particularity, to determine the issue
whether plaintiff had acted to the prejudice
of the defendant,
regarding transactions subsequent to the paying off of the debts of
the farming operations of the CC By its nature,
an application for
summary judgement if granted has severe consequences for the
defendant. If the plaintiff was aware that all
the debts of the CC
had been paid off. that the CC had become dormant and that
subsequently the defendant had sold his interest
in the company to
Kirchner and then resigned as director, it becomes more important for
the plaintiff to show in its particulars
of claim that the defendant
bound himself regardless of such facts, as surety for the debts of
the company in respect of the new
obligations created. Having regard
to the defences raised by the defendant on the merits there is
reasonable probability in my
view, that defendant may properly defend
his case.
[7] In the premises,
the following order is made:
1. The applications
is dismissed;
2. Defendant is
granted leave to defend the action:
3. Costs in the
cause
TLHAPI V V
JUDGE OF THE HIGH
COURT
ATTORNEYS FOR THE
PLAINTIFF : EDWIN JAY INCORPORATED
COUNSEL FOR THE
PLAINTIFF : Z SCHOEMAN
ATTORNEYS FOR THE
DEFENDANT : MATHYS KROG ATTORNEYS