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[2010] ZAECPEHC 18
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Nedbank Ltd v Usebenzo Trading CC (550/2010) [2010] ZAECPEHC 18 (11 May 2010)
IN THE HIGH COURT OF SOUTH AFRICA
(EASTERN CAPE – PORT ELIZABETH)
Case
No.: 550/2010
Date
heard:
04 May 2010
Date
delivered: 11 May 2010
In the matter between:
NEDBANK
LIMITED
Applicant
and
USEBENZO TRADING CC
REGISTRATION
NUMBER 2008/03161/23
Respondent
JUDGMENT ON APPLICATION FOR
SUMMARY JUDGMENT
DAMBUZA, J
:
The applicant
,
NEDBANK LIMITED, a registered bank in terms of the Companies Act
(Act 61 of 1973 as amended), seeks an order of summary judgment
against the respondent, USEBENZO TRADING CC, a close corporation
duly incorporated in terms of the Close Corporation Act (Act
69 of
1984), in the amount of R296,991.21 together with interest thereon
at 12.50% from 1 January 2010 and costs of suit as between
Attorney
and Client. The respondent opposes the application on the basis that
the written loan agreement on which the applicant
relies is not
binding, as it was never signed on behalf of the applicant.
In the summons
,
the applicant pleads, amongst others, that on 9 April 2008, at Port
Elizabeth the parties entered into a partly written, partly
oral
agreement. Leon Coetzee (Coetzee), a member of the respondent,
represented the respondent when the agreement was entered
into. In
terms of this agreement the applicant would loan and advance to the
respondent an amount of R300,000.00 which would
be payable in
monthly instalments. A variable interest rate of 16.50% per annum
would be payable on the amount loaned. A document
termed the “Term
Loan Agreement” which, according to the applicant, embodies
the terms of the agreement between the
parties is attached to the
summons.
The applicant
pleads in the summons that the respondent has defaulted in its
monthly repayments to the applicant to the extent
that as at
15
January 2010 the respondent was in arrears in the amount of
R28,410.88.
Of the allegations
made by the applicant in the summons, the only one disputed by the
respondent is the reference to the agreement
between the parties
as
having been partly written and partly oral. In the opposing
affidavit, Coetzee states that the parties always intended to
conclude a wholly written agreement, the terms of which would only
be effective once the agreement was signed by both parties.
1
Indeed clause 2 of PART N (Annexure A) of the “Term Loan
Agreement” provides that:
“
Once signed, the
agreement constitutes a binding agreement between the bank and the
client and contains all the terms and conditions
applicable to the
Loan”
It is trite law
that in opposition to an application for summary judgment a
respondent must set out in his or her affidavit facts
which
,
if proved at the trial, will constitute an answer to the plaintiff’s
claim (put differently, a
bona
fide
defence).
2
“
The
subrule
(Subrule
32 (3) (b)) does not require the defendant to satisfy the court that
his or her allegations are believed by him or her
to be true. It will
be sufficient if the defendant swears to a defence, valid in law, in
a manner which is not inherently or seriously
unconvincing; or, put,
differently, if his or her affidavit shows that there is a reasonable
possibility that the defence he or
she advances may succeed at
trial.”
3
It was submitted on behalf of the
applicant that failure by the applicant to sign the agreement is not
fatal to the agreement.
This is particularly so, it was argued, as
the applicant had advanced the money which is the subject matter of
the agreement
and the respondent had accepted it.
In
Goldblatt
v Freemantle
1920
AD 123
at 128-129
Innes
CJ
held that:
“
Subject to certain
exceptions, mostly statutory, any contract may be verbally entered
into; writing is not essential to contractual
validity. And if during
negotiations mention is made of a written document, the court will
assume that the object was merely to
afford facility of proof of the
verbal agreement, unless it is clear that the parties intended that
the writing should embody the
contract. (Grotius 3.14.26 etc). At the
same time it is always open to parties to agree that their contract
shall be a written
one (se Voet 5.1.73; Van Leeuwen 4.2, Decker’s
note);and in that case there will be no blinding obligation until the
terms
have been reduced to writing and signed. The question is in
each case, one of construction.”
In
Woods
v Walters
1921 AD 303
at 305,
Innes
CJ
referred to the above passage and added:
“
It follows of
course that where the parties are shown to have been ad idem as to
the material conditions of the contract, the onus
of proving an
agreement that legal validity should be postponed until due execution
of a written document lies upon the party who
alleges it.”
In this case
it
is common cause that the parties intended that the terms of the
agreement between them be reduced to writing and signed by
them. It
would appear that the responsible person(s) simply omitted to sign
the agreement on behalf of the applicant. But the
applicant went on
to offer the loan to the respondent, and the latter, in the face of
the omission, accepted the loan. The parties
therefore performed in
terms of the agreement. They both considered themselves to be bound
by the terms of the “Term Loan
Agreement”; until the
respondent discovered the omission of a signature on behalf of the
applicant. The parties were therefore
ad
idem
as to the terms on which the loan amount was advanced and accepted.
It is, in my view, opportunistic of the respondent, having
only
noticed the error regarding the signature when it received the
summons, to plead that the loan may have been advanced on
terms
other than those that had been agreed upon between the parties.
This case
is
comparable to
Roberts
and Another v Martin
[2005] ZAWCHC 12
;
2005
(4) SA 163
wherein the respondent had agreed to sponsor some of the
second applicant’s tennis activities. He (the respondent)
instructed
his attorneys to prepare an agreement to regulate the
sponsorship agreement. The written agreement was presented to the
applicants
for signature and both applicants duly signed it. The
respondent, however, never signed the agreement, but he did act in
terms
thereof in financing the second applicant’s career for
some time. About six months after the agreement was signed, the
respondent informed the applicants that he would not honour the
sponsorship agreement as he considered himself not bound thereby.
In
opposing a High Court application for specific performance he
relied, amongst others, on the fact that he had never signed
the
written sponsorship agreement. He contended that the parties had
intended that the agreement between them had to be reduced
to
writing and signed by both parties to have a binding effect. At
167 H-J
Ndita
AJ
held that:
“
It
is trite law that where an offer is made and the party to whom it is
addressed, with knowledge of the offer, performs an unequivocal
and
unambiguous act of acceptance, then the parties are in law held to
have contracted with one another on the terms as contained
in the
offer.”
In this case, the
respondent having unequivocally accepted the loan offered to it
by signing the written agreement and accepting the loan amount, I am
not persuaded that there is a reasonable possibility that
the
defence it advances may succeed at trial.
Consequently, summary judgment is
granted against the respondent for:
(a)
Payment
of R296,991.21;
(b) Payment of
interest on the said sum of R296,991.21 at the rate of 12.50% from 1
January 2010 to date of payment;
(c)
The
applicant’s costs of suit as between attorney and client.
____________________________
N. DAMBUZA
JUDGE OF THE HIGH COURT
Applicant’s
Counsel: Adv P. Scott
Applicant’s Attorneys: Boqwana
Loon & Connellan
4 Cape Road
PORT ELIZBETH
Respondent’s Counsel: Mr Vlok
Respondent’s Attorneys: Brown
Braude & Vlok Inc
317 Cape Road
Newton Park
PORT ELIZBETH
Heard on: 4 May 2010
Delivered on: 11 May 2010
1
“…
it was always intended by the parties to reduce their agreement to
writing and that the written document will
be the exclusive memorial
of the transaction and that it will come into existence once it had
been signed by both parties.”
2
See Rule 32
(3) (b) of the Rules of this Court;
Marsh
v Standard Bank of SA Ltd
2000
(4) SA 947
(W)
3
Erasmus;
Superior Court Practice; at B1-224 and the authorities quoted
therein.