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[2010] ZAECPEHC 29
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ABSA Bank Ltd v Ferreira and Others (725/2010) [2010] ZAECPEHC 29 (15 June 2010)
IN THE HIGH COURT OF SOUTH AFRICA
(EASTERN CAPE – PORT ELIZABETH)
Case
No.:
725/2010
Date
heard:
11
May 2010
Date
delivered:
15
June 2010
In the matter between:
ABSA
BANK LIMITED
Applicant
and
JOHANNES ADOLF FERREIRA
First
Respondent
ANDRIES
JACOBUS FERREIRA
Second
Respondent
BARENDINA
FERREIRA
Third
Respondent
J U D G M E N T
DAMBUZA, J
:
This is an
application for summary judgment
against
the second and third respondents. These respondents are sued in
the summons as sureties by virtue of deeds of suretyship
signed by
them.
In the summons the
applicant
pleads that the amount of R912,498.10 which is the balance of the
principal debt due by the first respondent, is in
respect of moneys
loaned and advanced by it to the first respondent and was secured
under mortgage bond number BZ70411/2007.
In opposing the
application for summary judgment, the second and third respondents
contend that t
he
summons is excipiable and that this constitutes a complete defence
to the applicant’s claim. In this regard paragraph
1 of the
particulars set out in the summons provides that the sum claimed is
“the
balance of the principal debt together with finance charges thereon
in respect of moneys loaned and advanced by plaintiff
to first
defendant at the latter’s special instance and request”
.
Further in the summons the applicant alleges that,
“the
aforesaid sum now being due and payable
in
terms of mortgage bond B70411 of 2007
,
by reason of the first defendant’s failure to pay either
punctually or at all
the
instalments which fell due under the said bond
,
notwithstanding demand and the amount and interest claimed being
certified”
(my
emphasis).
The second and
third respondents’ contention in this regard is that the
amount claimed does not arise from the mortgage
bond as set out in
the summons, but from the loan agreement which is a credit agreement
in terms of the National Credit Act
,
Act No. 34 of 2005 (“the Act”). It was submitted
therefore on behalf of these respondents that in this respect
the
particulars provided are vague and embarrassing in that the
applicant relies on a mortgage bond to establish the cause of
action, when the bond only secures the moneys loaned.
A further
contention by the second and third respondents is that as the
contracts of suretyship upon which the
applicant
relies constitute a credit guarantee as defined in section 1 of the
Act read with section 4(1) and 4(2)(c) and section
8(5), the
suretyship contract is a credit agreement in terms of the Act.
Consequently, so the argument goes, the applicant
was obliged to
comply with the provisions of the Act applicable to credit
agreements, including conducting an assessment of the
credit
recipient as required by section 81(2) of the Act. The respondents
contend that the applicant failed to conduct such
an assessment in
respect of the loan agreement which is the subject of these
proceedings. In particular, the contention is
that the applicant
failed to first take reasonable steps to assess the respondents with
regard to the following:
T
heir
general understanding and appreciation of the risks and costs of
the proposed credit and their rights and obligations under
the
suretyship agreement.
Their debt repayment history as
consumers under credit agreements
Their existing financial needs,
prospects and obligations, and
Whether there is
a reasonable basis to conclude that any commercial purpose
may
prove successful if the first respondent had such a purpose when
applying for the credit agreement.
Apart from copies
of the mortgage bond,
other
documents attached to the summons include the suretyship contracts
executed by the second and third respondents, notices
to all three
respondents in terms of section 129 of the Act and a certificate of
balance issued by the applicant. On the face
of the suretyship
contracts, it appears that they were signed by the respondents on 27
September 2001, prior to the Act coming
into effect. It was
submitted on behalf of the respondents that although, ordinarily,
the applicant would not have been under
any obligation to comply
with the terms of the Act, it not having been in place when the
suretyship contracts were concluded,
when the loan agreement was
revised or the terms thereof revisited, the applicant was obliged to
reassess all other agreements
ancillary to the loan agreement and in
respect of which the Act applies.
It is trite that a
Court hearing an application for summary judgment in terms of Rule
32 of the
Rules
of Court, has a discretion to refuse or grant summary judgment.
One of the relevant factors in the exercise of such discretion
is
the extraordinary and stringent nature of the remedy accorded to an
applicant by Rule 32. It is therefore when there is
no reasonable
doubt about the applicant’s claim that the application should
be acceded to.
1
On the other hand it has been held that the discretion should be
exercised, not capriciously or on the basis of mere conjecture
or
speculation so as to deprive an applicant of his remedy of summary
judgment when he is entitled to it. The Court must consider
the
material before it as to whether it appears that a reasonable
possibility exists that an injustice may be done if judgment
is so
granted.
2
Summary judgment proceedings are inappropriate for dealing with
clearly arguable questions of law that should be properly dealt
with
on exception. If, however, a case can be decided on a crisp point
of law, there is no reason why the point should not
be determined in
an application for summary judgment.
3
Regarding the
first defence raised by the respondents my view is that the cause of
action is clearly set out in the particulars
to the summons. I am
of the view that the
respondents
would be able to plead to the summons. The fact that the
applicant later in the same particulars refers to the
amount owed
being
“due
and payable in terms of mortgage bond”
does not render the summons vague and embarrassing. While it is
true that the main cause of the respondents’ indebtedness
to
the applicant is the loan agreement, that cause of indebtedness is
repeated in the portion referred to as the
“acknowledgment
of debt”
in the mortgage bond securing the loan. In that
“acknowledgment
of debt”
it is stated that mortgagor is truly and lawfully held to be bound
in favour of the bank (applicant) in the sum of R1 million
Rand.
The mortgage bond also provides that the mortgagor shall repay all
amounts owning by him to the applicant which are
secured under the
bond in accordance with
the
provisions of such written agreement or agreements as have been
concluded,
which
in my view, would include the loan agreement. Consequently while
the loan agreement is, on its own, a complete document
which
embodies the cause of the respondents’ indebtedness to the
applicant, the mortgage bond is an
“extension”
thereof and I am not persuaded that any embarrassment or confusion
arises as a result of reference to the repayment being due
in terms
of the mortgage bond. I therefore would not dismiss the
application for the reason that the summons is vague and
embarrassing.
Regarding the
contention that the
applicant
failed to comply with the terms of section 81(2) of the Act, whilst
the suretyship agreements were concluded in September
2001, it
appears from the mortgage bond that it was registered on 26 July
2007. It seems to me that the argument on behalf
of the
respondents that at the time the moneys secured under the mortgage
bond were advanced to the respondents, the terms of
the Act were
applicable, merits consideration. Although it is not stated in the
bond when the amount of R1 million Rand was
advanced to the
respondent, the fact that the mortgage bond was registered only in
2007 raised questions as to when the debt
secured in terms of the
mortgage bond arose, and whether the terms of the Act are (not)
applicable to the suretyship agreements
which secure the debt. In
my view, the respondents have raised a legal issue regarding
compliance with the terms of the National
Credit Act and it would
not be proper for this Court to decide such an issue in summary
judgment proceedings.
Consequently, I make the following
order:
Summary judgment is refused.
The respondents are given leave to
defend.
Costs of the application are to be
costs in the cause.
_________________________
N. DAMBUZA
JUDGE OF THE HIGH COURT
A
ppearances
:
For the
applicant: Adv A Beyleveld SC instructed by McWilliams & Elliott
Inc Attorneys of Port Elizabeth.
For the second and
third respondents: Adv J Nepgen instructed by De Villiers Inc
Attorneys of Port Elizabeth
1
Herbstein & Van Winsen: The Civil Practice of the Supreme
Court of South Africa, 4
th
Edition at 445.
2
Herbstein & Van Winsen
supra
at 445.
3
Herbstein & Van Winsen: The Civil Practice of the Supreme Court
of South Africa, 5
th
Edition Vol 1 at 540-541.