Standard Bank of SA Ltd v Naude and Another (08/2009) [2009] ZAECPEHC 5; 2009 (4) SA 669 (ECP) (24 March 2009)

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[2009] ZAECPEHC 5
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Standard Bank of SA Ltd v Naude and Another (08/2009) [2009] ZAECPEHC 5; 2009 (4) SA 669 (ECP) (24 March 2009)

FORM A
FILING SHEET FOR EASTERN CAPE
HIGH COURT, GRAHAMSTOWN JUDGMENT
PARTIES
:
STANDARD BANK OF SA LTD
Plaintiff/Applicant
And
DAVID FRANCOIS NAUDE
First Defendant/ Respondent
CELESTE NAUDE
Second Defendant/ Respondent
Registrar:
Case No.: 08/2009
Magistrate:
High
Court:
EASTERN
CAPE HIGH COURT, GRAHAMSTOWN
DATE
HEARD:
DATE
DELIVERED:
24.03.2009
JUDGE(S):
TSHIKI AJ:
LEGAL
REPRESENTATIVES –
Appearances:
for
the Appellant(s):
Adv G J
Gajjar
for
the Respondent(s):
Adv D. Smith
Instructing
attorneys:
Appellant(s):
Joubert
Galpin Searle Inc
Respondent(s):
J R Bester & Associates
CASE
INFORMATION -
Nature
of proceedings
:
Application
for Summary Judgment
[REPORTABLE]
IN THE HIGH COURT OF SOUTH AFRICA
(EASTERN CAPE,
PORT ELIZABETH)
Case
No.:
08/2009
Date
delivered:
24.03.2009
In the matter between:
STANDARD BANK
OF SA LTD
Plaintiff/
Applicant
and
DAVID FRANCOIS NAUDE
First
Defendant/
Respondent
CELESTE NAUDE
Second
Defendant/ Respondent
SUMMARY:
Practice
– Judgments and orders – Summary judgment –
Verifying

affidavit – Whether requisite verification
occurring

– Summons issued against two defendants –
Verifying

affidavit referring to ‘respondent’ instead of
respondents

– Defendants arguing
in
limine
that it did not                         appear

from plaintiff’s affidavit that requisite verification
contemplated

by Rule 32 of Uniform Rules of Court taken
place

and that plaintiff’s pleading not technically correct
in

that it referring to respondent when clearly two
defendants

referred to in mortgage bond which forms
basis

of summary judgment application – No prejudice
caused

to defendants – Reference to defendant clearly a
typographical

error which is not prejudicial to defendants
and

condonable – Point
in
limine
dismissed – Summary
judgment

granted in respect of the balance of the claim
not

covered by counterclaim.
J
U D G M E N T
TSHIKI AJ
:
This is an application for summary
judgment. For the sake of convenience I shall refer to the parties
as they are cited in the
action. The plaintiff seeks payment of
R3.296.653,61 plus interest and costs and other ancillary relief,
its cause of action
being founded on an alleged breach of a mortgage
bond which was registered by the defendants in favour of the
plaintiff as security
for payment of a debt. Annexed to the
application for summary judgment is a verifying affidavit filed in
terms of Rule 32(2)
deposed to by one Anthony Lorcan Kennedy who
describes himself as the manager of the plaintiff’s Legal,
Personal and Business
Banking Credit Department. The plaintiff’s
affidavit supporting the application for summary judgment reads as
follows:
“
1
. I
am an adult male and the Manager of the Applicant’s Legal, Personal
and Business Banking Credit Department of the Standard
Bank of
South Africa Limited, Registration Number 1926/000738/06 and
am duly authorised to depose to this affidavit
on the
Applicant’s behalf.
2. I swear positively to
the facts contained in the Applicant’s Summons and:
2.1 verify the cause of
action;
2.2 verify the correctness of all the allegations made in the Summons;
and
2.3 verify the amount
owing by the Respondents to the Applicant as stated in the Summons.
3. In my opinion the
Respondent
have no
bona
fide
defence to the action instituted and Notice of Intention to
Defend has been delivered solely for the purpose of delay.
4. I accordingly, on
behalf of the Applicant, hereby ask that the above Honourable Court
grant Summary Judgment against the
Respondents as claimed in the
Summons.”
In response to the plaintiff’s
application for summary judgment the defendants who are married to
each other in community of
property, filed an affidavit in terms of
Rule 32(3)(b). In this affidavit deposed to by the first defendant
and confirmed by
the second defendant the deponent raised two
points. The first point is a point
in
limine
and the
second point relates to the merits. The thrust of the point
in
limine
is that the
deponent to the plaintiff’s affidavit refers to a respondent
without indicating which of the two respondents before
Court has not
shown a bona fide defence to the action. The defendants’ opposing
affidavit reads as follows:
“
IN LIMINE
3.
I submit that the
Plaintiff’s application does not comply with Rule 32 of the
Uniform Rules of Court. In paragraph 3 of
the opposing affidavit the
Plaintiff only referred to one “Respondent” without indicating
which Respondent it refers to. From
the Plaintiff’s   affidavit
it is therefore uncertain if the Plaintiff believes that myself
or
the Second Defendant does not have
a
bona fide
defence.
4.
I submit that for this
reason alone the Honourable Court should dismiss the Plaintiff’s
application with costs.
MERIT
:
5.
5.1 I have a counterclaim
against the Plaintiff. I am a property developer and during November
2007 I made an offer to purchase
Erf 6103, also known as 22 See
Palm Singel, Jeffreys Bay. The purchase price was R1.85 million.
5.2 I applied for a bond
of R2.25 million with the Plaintiff which application was granted. I
needed the funds to cover the transfer
fees and to improve the
property before I could sell it at a profit.
5.3 After all the
suspensive conditions had been fulfilled and guarantees were
delivered to the transferring attorneys and a day
before the property
were to be registered in my name and the bonds registered the
Plaintiff withdrew the transaction and refused
to honour the
guarantees.  The plaintiff then offered me a lesser bond
for less than the initial purchase prise which
made it
impossible for me to proceed with the transaction.
5.4 As a result of the
Plaintiff’s conduct I lost R1.321.000,00 which would  have put
me in a position to honour
my obligations towards the Plaintiff also
with respect to the present action.
5.5 If the Plaintiff,
which knew, that I am a property developer and need the money in
order to sustain myself and to have an income
to honour my obligation
towards it, did not withdraw its finance to the project I would have
been in a  position to
honour my obligations in terms of
this present action. “
[3] On the merits the first defendant
raises, in his affidavit, a counterclaim against the plaintiff in
damages amounting to R1.321.000,00
(one million three hundred and
twenty one thousand rand only).
[4] I will first deal with the point
in limine
which also was first argued by the parties during this application
for summary judgment.
[5]
Mr
Gajjar
appeared for the
plaintiff and
Mr Smith
for the defendants.
[6] In regard to the point
in
limine
the question is
whether
ex facie
the affidavit the requisite verification in terms of Rule 32(2) has
occurred. It was stated by Addleson J in
Charsley
v AVBOB (Begrafnisdiens) Bpk
1
as follows:
“
.
. . if
there is a material defect in any of the formalities required by the
Rules of court, the court should not readily grant summary
judgment.
On the other hand, where it is clear that the Rules have
substantially been complied with and there is no prejudice
to the
defendant, I think that the court should condone the failure to
comply with a technical requirement of the Rules.”
[7] The summary judgment procedure is
a drastic, extraordinary and stringent remedy. It has a hallmark of
a final judgment and
closes the door to the defendant to ventilate
his defence at the trial notwithstanding his intention to do so.
(
Maharaj v Barclays National
Bank Ltd
2
.)
In the light of the above it is imperative that the plaintiff’s
affidavit should comply strictly with the provisions of Rule
32(2) of
the Uniform Rules of this Court.
[8] In
Mowschenson
and Mowschenson v Mercantile Acceptance Corporation of S.A. Ltd
3
Marais J stated:
“
. . . the verifying
affidavit goes to the question of the Court’s jurisdiction. If
the affidavit does not comply with the requirements
of the Rule . . .
the Court would have no jurisdiction to grant summary judgment.”
[9] The above dictum fortifies the
view that the affidavit of the plaintiff in support of the
application for summary judgment should
verify the cause of action in
the strict sense required by the Rules. (
Maharaj
v Barclays National Bank
case,
supra.
)
[10] In the summons the defendants are
both cited as first and second defendants respectively thus making
clear and without doubt
that two people are being sued herein.
[11] Paragraph 4 of the plaintiff’s
verifying affidavit states clearly that judgment is sought against
the defendants and not
against one defendant though they are referred
to as respondents.
[12] It is true that the parties and
their legal representatives should be encouraged to become accurate
and diligent in their observance
of the Rules which are an important
element in the machinery for the administration of justice. Such
encouragement should be
shown by the Court’s reluctance to accept
slovenly drafted court papers in disregard of the provisions of the
Rules of the Court.
But this does not mean that the court should
refuse to grant orders sought by litigants merely on the stroke of
technical objections
raised by opponents which are not prejudicial to
the other party’s case. The above view was emphasized by
Schreiner JA in
Trans-African
Insurance Co. Ltd v Maluleka
4
where the learned Judge of
appeal stated:
“
No doubt parties and
their Legal advisers should not be encouraged to become slack in
their observance of the Rules, which are an
important element in the
machinery for the administration of justice. But on the other hand
technical objections to less than
perfect procedural steps should not
be permitted, in the absence of prejudice, to interfere with the
expeditious and, if possible,
inexpensive decision of cases on their
real merits.”
[13] I have no doubt that the above
statement by Schreiner JA finds application in the objections raised
in the present case.
The defendants should not have the slightest
doubt that the application for summary judgment is sought against
both of them as
is clearly shown in paragraph 4 of the plaintiff’s
verifying affidavit as well as all the other documents in the file
including
the notice of application for summary judgment. In
particular paragraph 2 of the plaintiff’s verifying affidavit
states:
“
2. I swear positively
to the facts contained in the Applicant’s Summons and:
2.1 verify the cause of
action;
2.2 verify the
correctness of all the allegations made in the Summons; and
2.3 verify the amount
owing by the
Respondents
to the Applicant as stated in the Summons.”
[my
emphasis]
[14]
Mr
Smith
has strenuously
submitted on behalf of the defendants that the plaintiff’s
affidavit does not comply with the provisions of Rule
32(2) of this
Court’s Rules in that it has created confusion by referring to
respondent instead of respondents. In doing so
he placed much
reliance on the judgment of
ABSA
Bank Ltd v Coventry
5
.
I will deal with the Coventry judgment in due course.
[15] I have not been able to find any
decision dealing with a similar point in this division.
[16] A similar objection has been
raised in two decided cases in
ABSA
Bank Ltd v Coventry
quoted
supra
and
Standard
Bank of South Africa Ltd v Roestof
6
.
In the former case Meskin
J upheld the point
in limine
and held
7
:
“
In my opinion, reading
clause 3 in this way simply highlights its ambiguity: in the first
part of the clause there is a reference
to the fact that ‘the
defendants are indebted to the plaintiff’ and thereafter there is a
reference to one defendant only;
at the level of interpretation, it
is impossible to reconcile these
prima
facie
contradictory allegations and moreover to give them a meaning
consistent with the contents of prayer to the affidavit”
[17] It seems to me that the facts of
Coventry’s case are clearly distinguishable from those of the
present case. In that case
reference was made to defendants instead
of defendant. It also appeared that the reference to defendants
though there was only
one defendant could have been a deliberate act
on the part of the plaintiff and that the deponent could have been
referring to
a different case scenario altogether
.
Meskin J
said as follows
at page 353 G-H
“
Ex facie
the affidavit Payne has purported to verify that ‘the defendants
are indebted to the plaintiff…. upon the grounds set out in
the
plaintiff’s summons. The ‘grounds set out in the summons’
simply do not contain any
prima
facie
indication
of an alleged indebtedness to the plaintiff in a plurality of
defendants. Thus, Payne has purported to verify alleged
‘grounds
set out in the plaintiff’s summons‘ which in fact are
non-existent and his affidavit contains no verification at
all of any
of the grounds in fact set out in the plaintiff’s summons……..”
In my opinion the interpretation of
the affidavit in the light of the contents of the summons leads to
the conclusion that the affidavit
is hopelessly ambiguous.
[18] I have no reason to believe that
Coventry’s
case was wrongly decided. It is also the view of the learned judge in
that case at page
354
para
b-d
that the reference to
contents of the plaintiff’s prayer as well indicated that such
reference to defendants were not merely
erroneous but were
deliberately made on the footing that in the summons the plaintiff
sought, as Payne understood the matter, judgment
against first and
second defendants. Even the notice of summary judgment referred to
the application for summary judgment against
defendants.
[19] Blieden J in the
Standard
Bank of South Africa v Roestof
supra
dismissed a point
in limine
raised by defendant which was similar to the one under discussion and
at page 496G-H
he
held as follows:
“
If the papers are not
technically correct due to some obvious and manifest error which
causes no prejudice to the defendant, it
is difficult to justify an
approach that refuses the application, especially in a case such as
the present one where a reading
of the defendant’s affidavit
opposing summary judgment makes it clear beyond doubt that he knows
and appreciates the plaintiff’s
case against him.”
[20] In our case there is only one
reference to defendant instead of defendants a suggestion of a
typographical error and nothing
more. In establishing the intention
of the plaintiff when he or she made the error with regard to whether
reference is made to
the defendant or defendants the court should
look at all the papers relevant to the parties’ action. Once that
is done the
court can be able to establish whether or not the error
has really prejudiced the defendant(s). Where it is clear that the
technicality
of the error is insignificant and cannot mislead the
court in establishing to which defendant reference is made, there
should be
condonation of the error and that summary judgment should
be granted unless the defendant(s) has complied with Rule 32(3)(b).
Any
contrary conclusion would be to protect dishonest defendants on
the mere groundless allegation that the plaintiff’s pleadings
are
less than perfect. Each case must be judged on its own facts.
(
Standard
Bank of South Africa Ltd v Roestof
supra
)
[21] I am of the view that in the
present case there is no substance in the point
in
limine
raised by defendants
and it should be and is hereby dismissed.
[22] I now come to the defence raised
on the merits which is the defendants’ counterclaim. It seems to
be that Rule 22(4) is
a guide to the approach that I should adopt in
this matter. The Rule provides:
“
If by reason of any
claim in reconvention, the defendant claims that on the giving of
judgment on such claim, the plaintiff’s
claim will be extinguished
either in whole or in part, the defendant may in his plea refer to
the fact of such claim in reconvention
and request that judgment in
respect of a claim or any portion thereof which would be extinguished
by such claim in reconvention,
be postponed until judgment on the
claim in reconvention. Judgment on the claim shall, either in whole
or in part, thereupon
be so postponed unless the court, upon the
application of any person interested, otherwise orders, but the
court, if no other defence
has been raised, may give judgment for
such part of the claim as would not be extinguished, as if the
defendant were in default
of filing a plea in respect thereof, or
may, on the application of either party, make such order as to it
seems meet.”
[23] It follows in my view that in the
light of the provisions of the above Rule in an application for
summary judgment where a
counterclaim has been raised by the
defendant, the Court, if satisfied that the counterclaim is a
bona
fide
defence to part of the
plaintiff’s claim, may grant summary judgment in respect of the
portion of the plaintiff’s claim in
excess of the counterclaim.
What is important is that before the court can do so it must first
satisfy itself as to whether the
defendant has complied with the
provisions of Rule 32(3)(b) which requires a full disclosure of the
nature and grounds of the counterclaim
as well as the material facts
upon which it relies.
[24] The first defendant says that
their counterclaim against the plaintiff is a sum of R1.321.000,00
and has not disclosed any
defence in respect of the plaintiff’s
balance of the claim which is R1,975,653.61.
[25] The defendant has not paid any
money to court being the difference between the amount claimed by the
plaintiff and his alleged
counterclaim. In my view the defendant
will only have a defence to the plaintiff’s claim if he pays the
difference in Court.
See
Stassen
v Stofberg
8
.
In
Soil
Fumigation Services Lowveld CC v Chemfit Technical Products (Pty)
Ltd
9
Brand JA held as follows:
“…
.I can, as a matter
of principle, see no reason why a defendant should not be allowed to
raise the same partial defence by means
of a counterclaim for a
lesser amount in summary judgment proceedings. A defendant who
fails to pay the balance into Court runs
the risk that summary
judgment may be granted for the balance together with the costs
resulting from the summary judgment application.
In order to avoid
this risk a defendant may therefore be well advised to follow the
example of
Koornklip
Beleggings (Edms) Bpk
10
by
paying the balance into Court.”
[26] In the present case the
defendants have raised a partial defence in that they have a
counterclaim of damages against
the plaintiff in the sum of
R1.321.000,00. The defence, in my view, complies with the provisions
of Rule 32(3)(b) of the Rules
of this Court. However, the defence
does not cover the whole of the plaintiff’s claim because the
counterclaim is less than
the plaintiff’s claim. There is
therefore a difference of R1.975.653,61. No defence has been
proffered by the defendants in
respect of this balance and no money,
by way of the difference referred to above, has been paid into Court.
Rule 32(6) provides
as follows:-
“
If
on the hearing of an application made under this Rule it appears.
.
. .
that
the defendant is entitled to defend as to part of the claim; the
Court shall –
. . .
Give leave to defend to
the defendant as to part of the claim and enter judgment against him
as to the balance of the claim, unless
such balance has been paid to
the plaintiff.”
The defendants herein have not paid
any balance to either in Court or to the plaintiff. In terms of this
Rule and in view of the
circumstances of this case I am obliged to
grant judgment for the plaintiff in respect of the balance.
Notwithstanding leave to
the defendants to defend the balance of the
plaintiff’s claim I will order that the property in question be
declared executable
for the reason that there is no relationship
between the counterclaim and the claim in convention.
[27] I therefore make the following
order:
Judgment for the plaintiff in the sum
of R1.975.653,61 is hereby granted against both defendants jointly
and severally the one
paying the other to be absolved.
The defendants are given leave to
defend the plaintiff’s claim in respect of the balance of
R1.321.000,00.
That the defendants are ordered to
pay interest of the said sum of
R1.975.653,61
a
tempore morae
to date of
final payment.
The property being erf No 5537
Jeffreys Bay is hereby declared especially executable.
The defendants are ordered to pay
costs occasioned by the application for summary judgment on the
scale as between attorney and
client and to pay such costs jointly
and severally the one paying the other to be absolved.
_________________________
P.W. TSHIKI
JUDGE OF THE HIGH COURT (ACTING)
Date case
heard -
3
March 2009
Date judgment
delivered - 24 March 2009
For the
applicant - Adv G J Gajjar
Instructed by
Joubert
Galpin Searle Inc
173 Cape
Road,
Greenacres
Port Elizabeth
For the
respondent - Adv D. Smith
Instructed by
J R Bester &
Associates
70 Worraker
Street
Newton Park
Port Elizabeth
1
1975 (1) SA
891
(E) at 893C-D
2
1976 (1) SA 418
(A)
3
1959 (3) SA 362
(W) at 366C-D
4
1956 (2) SA 273(A)
at 278F
5
1998(4) SA 351 (N)
6
2004 (2) SA 492
(W)
7
1998 (4) SA 351(N)
at 354G-H
8
1973 (3) SA 725
(C)
9
2004 (6) SA 29
(SCA) at 34F
10
1970 (1) SA 675
(C)