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[2022] ZAECQBHC 9
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Botha v Mibit (PTY) Ltd and Another (2238/2021) [2022] ZAECQBHC 9 (19 May 2022)
IN
THE HIGH COURT OF SOUTH AFRICA
(EASTERN
CAPE LOCAL DIVISION, GQEBERHA)
Case
No.: 2238/2021
Date
heard: 8 March 2022
Date
delivered: 19 May 2022
In
the matter between:
JOHN
PHILIP BOTHA
Plaintiff
and
MIBIT (PTY)
LTD
First Defendant
IVAN
LUDICK
Second
Defendant
JUDGMENT
ZIETSMAN
AJ:
[1]
Plaintiff instituted action against the defendants based on an
agreement
and acknowledgment of debt, termed an “
Investment
Agreement, Admission of Liability and Instalment Agreement
”,
entered into between the parties. Second defendant bound himself “
as
surety and co-principal debtor with the [first defendant] for the due
performance of any obligation of the [first defendant]
and/or payment
for any amounts which may now or at any time be or become owing to
[plaintiff], from whatsoever cause arising
”.
[2]
A notice of intention to defend was filed on behalf of both
defendants,
however only second defendant filed a plea. Subsequent to
the delivery of the plea, plaintiff applied for summary judgment, but
against both defendants, jointly and severally. I raised this with
plaintiff’s counsel at the commencement of the hearing
of the
matter. He confirmed that plaintiff only persists with the
application against second defendant and withdraws the application
against the first defendant (although no formal notice of withdrawal
was handed up). Second Defendant appeared in person.
[3]
The application for summary judgment was initially set down for 15
February
2022. It appears from the order, issued on 15 February 2022,
that second defendant appeared in person, and the matter was
postponed
to 8 March 2022, with second defendant to file his
answering affidavit by 1 March 2022. Second Defendant was ordered to
pay the
costs occasioned by the postponement. There was no appearance
for the first defendant.
[4]
A notice of intention to oppose the application for summary judgment
was
filed, referring to both defendants, but only signed by second
defendant. Subsequent thereto an affidavit, deposed to by second
defendant, was filed in opposition to the application, however
reference is made to the first defendant and that it is allegedly
in
liquidation. From the affidavit it is not apparent on what basis
second defendant is authorised to depose to the affidavit on
behalf
of the first defendant. Having regard to the Lexis WinDeed report
attached to plaintiff’s affidavit, it is apparent
that second
defendant is not a director of the first defendant. The report
reflects his status as “resigned” and the
resignation
date as 26 July 2021.
Legal
principles
[5]
In the
matter of
Standard
Bank of South Africa Limited and Another v Five Strand Media (Pty)
Ltd and Others
[1]
Ronaasen AJ succinctly set out the material amendments to Uniform
Rule 32, which came into operation on 1 July 2019, and the
requirements
in terms of the rule. I do not deem it necessary to
repeat it.
[6]
The proper
approach to applications for summary judgment as stated in the
well-known judgment of
Maharaj
v Barclays National bank Ltd
[2]
still applies.
[3]
In other
words, nothing has changed in this regard and the defendant still has
to disclose a
bona
fide
defence. As stated in
Maharaj
:
[4]
“…
while
the defendant need not deal exhaustively with the facts and the
evidence relied upon to substantiate them, he must at least
disclose
his defence and the material facts upon which it is based with
sufficient particularity and completeness to enable the
Court to
decide whether the affidavit discloses a bone fide defence.
”
[7]
A defendant’s affidavit resisting a summary judgment
application
should disclose fully the nature and grounds of the
defence and the material facts relied upon therefore.
[8]
Plaintiff’s affidavit in support of summary judgment complies
with
the provisions of rule 32. Plaintiff also explains why second
defendant’s “defence” as pleaded does not raise
any
issue for trial.
The
plea
[9]
Second
defendant admits that:
[5]
“
[9.1]
On or about the 8
th
of June 2020 at or
around Pretoria, the Plaintiff Mr John Phillip Botha concluded a
written agreement with the 2
nd
Defendant,
who duly represented the 1
st
Defendant. The
agreement is attached …. ‘Annexure A’.
[9.2]
The 1
st
Defendant acknowledged and agreed that it is
indebted to the Plaintiff in the amount of R570 000.00.
[9.3.]
That the debt will be paid as follows:
[9.3.1] Payment
in the amount of R200 000.00 on or before the 31
st
December 2020;
[9.3.2] Payment
in the amount of R92 500.00 on the 31
st
of March 2021;
[9.3.3]
Payment in the amount of R92 500.00 on the
30
th
of June
2021;
[9.3.4] Payment
in the amount of R92 500.00 on the 31
st
of August 2021;
[9.3.5] Payment
in the amount of R92 500.00 on the 31
st
of December 2021;
[9.4.]
The 1
st
Defendant further accepted and agreed that the
calculation of the amount for which it is indebted for is correct and
agreed that
the Plaintiff has a lawful claim.
[9.5.]
The 1
st
Defendant agreed that if it fails to
make payment in terms of the agreement that the Plaintiff may without
any notice apply for
judgment for the whole amount outstanding in
terms of the agreement together with costs on attorney and client
scale.
”
[10]
Second defendant’s “defence” in respect of the
claim against him, as
surety, is threefold:
[10.1]
Firstly,
that the agreement is void for the following reasons:
[6]
“
[10.1.1]
Plaintiff is Bakkies Botha, an adult male, former Springbok Lock
Forward rugby player, in excess of 2.1 metres in height, with a body
mass in excess of 150kgs;
[10.1.2]
Second defendant is 180cm in height with a body mass of 74kgs;
[10.1.3]
At all material times, second defendant was not allowed legal
representation nor requested and advised to obtain such;
[10.1.4]
At all material times, plaintiff was represented by Mr J Jacobs,
his
present day attorney of record;
[10.1.5]
Plaintiff had during his rugby career on and off the field
demonstrated his inhuman brutality and physical strength;
[10.1.6]
At all material times the attorney of record supported and created
an
environment conducive to plaintiff to demonstrate his inhuman
brutality and physical strength (hereinafter referred to as ‘the
threat of imminent death or serious bodily injury and irreparable
harm’);
[10.1.7]
Second defendant pleads that before and at the time of the
presentation procedure of the agreement for signature the threat of
imminent death or serious bodily injury and irreparable harm
prevailed, endured and dictated the signature proceedings;
[10.1.8]
Second defendant pleads that plaintiff, duly supported by his
attorney of record, acquired an undue influence over him, his
physical integrity and fear which weakened and nullified his
resistance
and existence;
[10.1.9]
Second defendant pleads that plaintiff’s threat of imminent
death or serious bodily injury and irreparable harm made his will
pliable;
[10.1.10]
Second defendant pleads that plaintiff used his influence in a
unscrupulous
manner to persuade and order him to agree to the
agreement to his detriment and sign the agreement;
[10.1.11]
Second defendant pleads that save for the threat of imminent death or
serious bodily injury and irreparable harm resulted in him not having
a normal freedom of will and that he would not have entered
into the
agreement and sign the same but for this undue influence and the
threat.
”
[10.2]
Secondly, that Plaintiff failed to comply with the National Credit
Act 34 of 2005 (“the
NCA”) and that “
summons was
prematurely issued and of no force and effect
”.
[10.3]
Thirdly, that the clause relating to suretyship does not bind him,
alternatively it is “
vague and embarrassing, and is
voidable
”.
[11]
I pause to mention that it is common cause that plaintiff signed the
agreement in Pretoria,
and second defendant in Port Elizabeth (as it
was previously called).
Undue
influence
[12]
A defendant is entitled to plead any facts which support the
conclusion that his consent
was obtained improperly.
[13]
A defendant
may avoid or rescind a contract if it was concluded as a result of
undue influence. In order to do so he will have to
allege and prove
that:
[7]
[13.1]
the other party obtained an influence over him;
[13.2]
this influence weakened his powers of resistance and made his will
pliable; and
[13.3]
that the other party used this influence in an unconscionable manner
to persuade him to agree
to a transaction which (a) was to his
detriment, and (b) he would not have concluded if he had enjoyed
normal freedom of will.
[14]
Second defendant, in essence, alleges that due to plaintiff’s
stature, and weight,
he obtained an influence over him, which
weakened his powers, and resulted in the conclusion of the agreement,
to his detriment.
Save for the bald allegation of “
threat of
imminent death or serious bodily injury
”, second defendant
does not plead when, where and how such threat was allegedly made. It
is also not apparent why the agreement
was to his detriment. The
agreement is an acknowledgement of debt and, in terms of thereof,
second defendant bound himself as surety
and co-principal debtor with
the first defendant. The heading of the agreement refers to
“
Investment Agreement, Admission of Liability and Instalment
Agreement
”. In my view this presupposes that plaintiff
advanced money to the first defendant.
[15]
To put it differently, second defendant’s “defence”
of undue influence
is in no way substantiated by facts. It is merely
legal conclusions without any facts relied upon to substantiate such
conclusions.
His affidavit suffers the same deficiency. More of this
below.
The
NCA
[16]
Second defendant also alleges that he is a natural person and did not
receive a notice
in terms of the NCA, and therefore plaintiff failed
to comply with the NCA.
[17]
In terms of the provisions of section 4 (1)(b) of the NCA,
subject
to sections 5 and 6, the NCA applies to every credit agreement
between parties dealing at arm’s length and made within,
or
having an effect within, the Republic, except a large agreement,
which is an agreement above R250 000.00, in terms of which
the
consumer is a juristic person whose asset value or annual turnover
is, at the time the agreement is made, below R1 000 000.00.
[18]
For a
contract of suretyship to be governed by the NCA, the underlying
transaction must similarly be governed by the NCA.
[19]
The agreement
is a large agreement since the amount is above R250 000.00. No facts
have been pleaded in respect of the first defendant’s
asset
value or annual turnover.
[20]
Second defendant fails to plead any facts to support the contention
that the NCA is applicable.
Accordingly,
the contention that the NCA is applicable does not constitute a
defence to the claim.
Suretyship
[21]
Second defendant contends that “
on a normal reading of the
[surety] clause it does not bestow any liability
” on him,
alternatively the clause is vague and embarrassing and therefore
“
voidable
”.
[22]
It is necessary to quote clause 10, which second defendant refers to,
but before I do so
I have to put this in context. On the first page
of the agreement plaintiff is identified as “the Creditor”,
the first
defendant as “the Company” and second defendant
as “Surety”. On the last page, the agreement is signed
once, by second defendant, in each capacity, i.e. on behalf of the
Company (the first defendant) and as surety (second defendant).
[23]
I now turn to clause 10, which reads as follows:
“
Surety
10. I hereby
bind myself in my personal capacity as surety and
co-principal
Company
to be jointly and severally liable with
the
Purchaser
for the due performance of any obligation of the Company and/or
payment for any amounts which may now or at any time be or become
owing to the Creditor, from whatsoever cause arising.
”
[8]
[24]
The vagueness which second defendant refers to relates to the
underlined words “co-principal
Company” and “the
Purchaser”. In other words, second defendant takes issue with
the identification of the three
necessary parties, i.e. the creditor,
the principal debtor and the surety.
[25]
Counsel for plaintiff, in argument, submitted that the words should
read “co-principal
debtor” and “the Company”
respectively, and that plaintiff seeks rectification of the clause
under further and/or
alternative relief. I will return to this below.
[26]
Section 6 of the General Law Amendment Act 50 of 1956 (“the
Act”) provides
as follows:
“
No
contract of suretyship entered into after the commencement of this
Act, shall be valid, unless the terms thereof are embodied
in a
written document signed by or on behalf of the surety …
”
[27]
In
Inventive
Labour Structuring (Pty) Ltd v Corfe
[9]
the court held that:
“
[5]
In the past, the word 'terms' in the section has been construed to
include the identification of the three
necessary parties, i.e. the
creditor, the principal debtor and the surety. (Fourlamel (Pty) Ltd v
Maddison
1977 (1) SA 333
(A) at 345A - D and Intercontinental
Exports (Pty) Ltd (supra para [8] at 1051B).) If any one of
the three
parties is not identified ex facie the contract,
it will be invalid for want of compliance with statutory
requirements.
…
[11]
In a case where the contract being construed is capable of more than
one interpretation, one meaning leading to
invalidity and the other
not, preference must be given to the latter meaning in order to save
the contract from invalidity. That
much is trite. Therefore, the
present suretyship - when properly construed - complies with the
formal requirements in s 6
of the Act.
”
[28]
The creditor, the principal debtor and the
surety are identified
ex facie
the
agreement.
[29]
In my view, the suretyship, when properly construed, complies with
the formal requirements
of the Act and is valid. In light of the
conclusion I have reached it is not necessary to deal with the
argument for rectification.
Second
defendant’s affidavit
[30]
Second defendant’s affidavit, to a large extent, incorporates
the terms of his plea.
He, again, referred to conclusions of law,
without substantiating such conclusions with facts. The only
extent to which he
elaborated on the “defence” of undue
influence, was to allege that he intends to adduce evidence of
witnesses and expert
witnesses.
[31]
Despite having had the opportunity to deal with the facts upon which
he relies to conclude
that the agreement was entered into as a result
of undue influence, second defendant failed to do so. His failure to
do so is telling.
[32]
Second defendant also attempted to elaborate on the “defence”
of undue influence,
in argument, by wanting to refer to incidents in
social media. Since he appeared in person, I explained that it was
not permissible
to refer to allegations which were not contained in
the papers and, it would in all probability, be inadmissible on the
basis of
irrelevance.
[33]
Second defendant contended that the summary judgment application was
“procedurally
deficient”, but readily conceded (correctly
so) that he had placed reliance on the old rule 32, prior to its
amendment.
[34]
Plaintiff’s
failure to attach the agreement to his affidavit in support of
summary judgment was also raised in second defendant’s
affidavit. The agreement was attached to the particulars of claim.
The failure to again attach it cannot prejudice second defendant
and
is, in my view, not fatal to the application. Such failure is, in any
event, condonable.
[10]
Further
‘defence’ raised in argument
[35]
Second defendant, for the first time in argument, raised issue with
the application for
summary judgment in that he, apparently, only
received it on 12 January 2022 when he picked it up in his garden,
and the signature
on the second page is plaintiff’s signature,
not his. This belated ‘defence’ was seemingly raised in
an attempt
to show that plaintiff’s application was launched
outside the 15 day period allowed in terms of the rule. Even if that
was
the case, it ought to have been raised in second defendant’s
affidavit, as a point
in limine
, and plaintiff could then have
considered his position and whether it was necessary to file an
application for condonation. In
my view, this too does not constitute
a defence.
Conclusion
and costs
[36]
Having had regard to the “defence” raised in the plea and
affidavit resisting
summary judgment, I am of the view that second
defendant has not disclosed a
bona fide
defence to the action.
There is no triable issue. I am not satisfied that second defendant
has disclosed fully the nature and grounds
of his defence and, in
particular, the material facts relied upon therefore. There is no
basis for me to exercise my discretion
to refuse summary judgment.
[37]
There is also no basis why costs should not follow the result. Whilst
the agreement makes
provision for costs on the attorney and client
scale, plaintiff’s counsel submitted in argument that plaintiff
seeks costs
on the party and party scale only.
[38]
The following order is issued:
[38.1]
Summary judgment is granted against second defendant for:
[38.1.1]
Payment in the amount of R475 000.00;
[38.1.2]
Interest, on the amount of R475 000.00,
at the rate of 7% per
annum from date of demand, 9 July 2021, to date of payment;
[38.1.3]
Costs of the suit.
T.
Zietsman
ACTING
JUDGE OF THE HIGH COURT
Appearances:
For
Plaintiff:
Adv. I Lambrechts, instructed by JJ Jacobs Inc., Pretoria c/o
Van Heerden Attorneys, Gqeberha
For
First Defendant:
No appearance
For
Second Defendant:
In person
[1]
[2020] ZAECPEHC 33 (7 September 2020) at paras [8] to [14].
[2]
1976 (1) SA 418 (A).
[3]
NPGS
Protection & Security Services CC and Another v Firstrand Bank
Ltd
2020 (1) SA 494
(SCA) at para [14].
[4]
At 426 A – E.
[5]
Quoted from paras 4 and 5 of particulars of claim; admitted by
second defendant in paras 6 and 8 of his plea.
[6]
Quoted from second defendant’s plea, paras 7.1 to 7.11.
[7]
Preller
and Others v Jordaan
1956 (1) SA 483
(A) at 492G-H; and Van Huyssteen et al
Contract
General Principles
5
th
Edition (2016) at 4.75 – 4.76.
[8]
My own underlining.
[9]
2006 (3) SA 107
(SCA) at paras [5] and [11].
[10]
Absa
Bank Ltd v Botha NO and Others
2013 (5) SA 563
(GNP) at par [16].