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[2012] ZASCA 73
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Visser and Another v Kotze (519/2011) [2012] ZASCA 73 (25 May 2012)
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THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case No: 519/2011
In the matter between:
ANDRIES VISSER
…...........................................................................
First
A
ppellant
YOLANDE VISSER
….....................................................................
Second
Appellant
and
EREKA
KOTZE
…....................................................................................
Respondent
Neutral
Citation
:
Visser
v Kotze
(519/2011)
[2012] ZASCA 73
(25
May 2012)
Coram
: Heher, Van
Heerden, Mhlantla, Leach JJA and Ndita AJA
Heard
: 30 April
2012
Delivered
: 25 May
2012
Summary
:
Application for summary judgment – defence of duress
raised – requirements for summary judgment and for defence of
duress
– bona fide defence of duress not disclosed –
summary judgment granted
Order
On appeal from:
Western Cape High Court, Cape Town (Bozalek and Goliath JJ
sitting as a court of appeal):
1 The appeal is upheld
with costs on the scale as between attorney and client.
2 The order of the court
below is set aside and replaced with the following:
‘
1. The appeal is
dismissed with costs on the scale as between attorney and client.
2. The magistrate’s
order is amended to the extent reflected in the substituted order set
out hereafter.
3. Summary judgment is
granted against the first and third defendants, jointly and
severally, the one paying the other to be absolved,
as follows:
3.1 payment of the sum of
R178 500;
3.2 interest on the said
sum at the rate of 15.5 per cent per annum from 4 August 2009 to date
of payment;
3.3 costs on the scale as
between attorney and client.’
JUDGMENT
_______________________________________________________________
van heerden ja (HEHER,
MHLANTLA, leach jja and ndita aja concurring):
In
this case, the appellants sued a close corporation by the name of
Asapi 1046 CC t/a PFC Durbanville, as the first defendant,
in the
Bellville Magistrates’ Court for moneys due and owing under a
loan agreement. The second and third defendants, Ms
Noleen van den
Bergh and Ms Ereka Kotze, the latter being the present respondent,
were also sued as sureties under a ‘Deed
of Suretyship’,
signed by them for the debts of the close corporation. To avoid
confusion, I shall refer to the parties
as they were in the
Magistrates’ Court.
The
plaintiffs applied for summary judgment against the first and third
defendants. This was opposed by them on the ground that
the loan and
suretyship agreements had been entered into under duress. The
magistrate was unimpressed with this defence. He held
that the
defendants had not established a bona fide defence to the
plaintiffs’ claim, and granted summary judgment against
them.
The first and third defendants then noted an appeal to the Western
Cape High Court. However, the first defendant (the close
corporation) was subsequently liquidated and the liquidators did not
proceed with the appeal.
The
third defendant’s appeal to the high court against the summary
judgment order was successful. The high court held that,
although
the third defendant’s affidavit opposing summary judgment fell
short of being comprehensive, it succeeded in establishing
a bona
fide defence of duress sufficient to ward off summary judgment. The
third defendant was granted leave to defend the action.
The high
court refused leave to appeal, and the present appeal by the
plaintiffs is before us with the leave of this court.
The
material facts are as follows. On 11 November 2008, the plaintiffs
and the first defendant concluded a written agreement of
loan, in
terms of which the plaintiffs agreed to lend the first defendant an
amount of R425 000. It was noted that this amount
had already been
paid to the first defendant. No interest was payable on the loan,
but the first defendant was obliged to repay
the capital amount on
demand. The first defendant consented to the jurisdiction of the
relevant magistrates’ court in respect
of all proceedings
connected with the agreement.
On
the same day, the second and third defendants signed a document
titled ‘Deed of Suretyship’, in terms of which
they
bound themselves as sureties and co-principal debtors with the first
defendant for all and any debts owed by the first defendant
to the
plaintiffs. The second and third defendants also consented to the
jurisdiction of the magistrates’ court. Furthermore,
the
suretyship provided that the amount of any debt of the first
defendant for which the sureties were liable to the plaintiffs
would
be established by a certificate signed by the plaintiffs, which
would be proof of the amount of the indebtedness and valid
for the
purpose of obtaining summary judgment.
According
to the plaintiffs, the defendants paid a total amount of R96 000,
leaving an outstanding balance of R329 000, as
set out in a
certificate by the plaintiffs. By means of a letter dated 27 July
2009, addressed to the defendants by the plaintiffs’
attorneys, the plaintiffs demanded payment of the sum of R329 000
within 7 days. Neither this nor any other amount was paid by
the
defendants, giving rise to the action in the magistrate’s
court referred to above.
The first and third
defendants entered appearance to defend and the plaintiffs then
applied for summary judgment against them.
This was opposed. In her
affidavit opposing summary judgment on behalf of both herself and
the first defendant, the third defendant
stated the following:
‘
In
and during October 2008, the Plaintiffs submitted the Defendants with
documents to be signed in replacement of the existing Agreements.
The
Plaintiffs related that the first agreements already signed were not
worth the paper it was written on. As a result, the Defendants
consulted with their previous Attorney, Mr JP Van Niekerk of Smit
Kruger Inc in Durbanville, who advised us against signing such
documentation for various reasons, most important of which was the
fact that the capital amount in the Loan Agreement was incorrect
as
per paragraph 6 hereunder.
After
attending a meeting with Mr Van Niekerk on or about the 30
th
October 2008 in Durbanville, both Second Defendant and I were
accosted by the Plaintiffs in their double-cab LDV, who pulled their
vehicle in front of us preventing us from being able to move forward
and in the process, nearly driving over my foot.
The
First Plaintiff then started attacking my character, accusing me of
being a thief, and further threatening that if Second Defendant
and I
did not sign the documentation which they had presented to us, they
would report us to the Commercial Unit of the SAPS, and
also inform
my husband. The First Plaintiff was well aware of the fact that I am
petrified of my husband who previously held a
high position within
the Directorate of Special Operations (Scorpions), and that I would
do anything to prevent the Plaintiffs
from making contact with him to
inform him of the First Defendant’s precarious financial
position.
As
a consequence of the coercion and fear which was installed upon the
Second Defendant and I, we reluctantly signed the new Loan
Agreement
which is marked Annexure “B” to the Plaintiffs’
Particulars of Claim, as well as the Deeds of Suretyship
marked
Annexure “C” thereto.’
As
recorded earlier, this reliance on duress as a defence to avoid
summary judgment did not succeed in the magistrates’
court. It
did, however, succeed on appeal to the Western Cape High Court which
refused summary judgment and gave the third defendant
leave to
defend the action. Which of these approaches is correct is the
subject of the present appeal.
Magistrates’ court
rule 14 deals with summary judgment. In terms of rule 14(3)
(c)
,
as it was at the time of this case:
‘
Upon
the hearing of an application for summary judgment, the defendant may
–
.
. . .
(c)
satisfy
the court by affidavit delivered not later than noon of the day
preceding the hearing of the application (which affidavit
may by
leave of the court be supplemented by oral evidence) that he has a
bona
fide
defence
to the claim on which summary judgment is being applied for or a
bona
fide
counterclaim
against the plaintiff. Such affidavit and evidence shall disclose the
nature and grounds of the defence or counterclaim.’
1
The
new rule 14(3)
(b)
,
the successor to rule 14(3)
(c)
,
provides that ‘such affidavit or evidence shall disclose
fully
the nature and grounds of
the defence
and
the material facts relied on therefor’
(emphasis
added), which is the wording used in the equivalent Uniform rule
32(3)
(b)
.
As the case law shows, however, the difference in wording makes no
difference to the requirements for an affidavit opposing summary
judgment.
2
The remedy of summary
judgment has for many years been regarded as an extraordinary and
stringent one in that it closes the doors
of the court to the
defendant and permits a judgement to be given without a trial.
However, in
Joob
Joob Investments (Pty) Ltd v Stocks Mavundla Zek Joint Venture,
3
Navsa JA, in holding
that the time has perhaps come to discard labels such as
‘extraordinary’ and ‘drastic’,
stated:
4
‘
The
rationale for summary judgment proceedings is impeccable. The
procedure is not intended to deprive a defendant with a triable
issue
or a sustainable defence of her/his day in court. After almost a
century of successful application in our courts, summary
judgment
proceedings can hardly continue to be described as extraordinary. Our
courts, both of first instance and at appellate
level, have during
that time rightly been trusted to ensure that a defendant with a
triable issue is not shut out. In the
Maharaj
case
5
at
425G-426E, Corbett JA was keen to ensure, first, an examination of
whether there has been sufficient disclosure by a defendant
of the
nature and grounds of his defence and the facts on which it is
founded. The second consideration is that the defence so
disclosed
must be both bona fide and good in law. A court which is satisfied
that this threshold has been crossed is then bound
to refuse summary
judgment. Corbett JA also warned against requiring of a defendant the
precision apposite to pleadings. However,
the learned judge was
equally astute to ensure that recalcitrant debtors pay what is due to
a creditor.
Having
regard to its purpose and its proper application, summary judgment
proceedings only hold terrors and are “drastic”
for a
defendant who has no defence. Perhaps the time has come to discard
these labels and to concentrate rather on the proper application
of
the rule, as set out with customary clarity and elegance by Corbett
JA in the
Maharaj
case at 425G-426E.’
As already indicated,
one of the ways in which a defendant can avoid summary judgment, is
to satisfy the court by affidavit that
he or she has a bona fide
defence to the claim on which summary judgment is being applied for.
The word ‘satisfy’
does not mean ‘prove’.
What the rule requires is that the defendant must set out in his or
her affidavit facts which,
if proved at the trial, will constitute
an answer to the plaintiff’s claim. The classic and
much-quoted formulation of
the approach to an affidavit opposing
summary judgment is that set out by Corbett JA in the
Maharaj
case
6
as follows:
‘
Accordingly,
one of the ways in which a defendant may successfully oppose a claim
for summary judgment is by satisfying the Court
by affidavit that he
has a
bona
fide
defence
to the claim. Where the defence is based upon facts, in the sense
that material facts alleged by the plaintiff in his summons,
or
combined summons, are disputed or new facts are alleged constituting
a defence, the Court does not attempt to decide these issues
or to
determine whether or not there is a balance of probabilities in
favour of the one party or the other. All that the Court
enquires
into is: (a) whether the defendant has “fully” disclosed
the nature and ground of his defence and the material
facts upon
which it is founded, and (b) whether on the facts so disclosed the
defendant appears to have, as to either the whole
or part of the
claim, a defence which is both
bona
fide
and
good in law. If satisfied on these matters the Court must refuse
summary judgment, either wholly or in part, as the case may
be. The
word “fully”, as used in the context of the Rule (and its
predecessors), has been the cause of some Judicial
controversy in the
past. It connotes, in my view, that, 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
bona
fide
defence
. . . At the same time the defendant is not expected to formulate his
opposition to the claim with the precision that would
be required of
a plea; nor does the Court examine it by the standards of pleading.’
7
As
is evident from the extract from her affidavit set out above, the
third defendant’s defence to the plaintiffs’
claim under
the loan agreement and the suretyship agreement was one of duress.
Allegations were also made about the capital amount
reflected in the
loan agreement, the payments made by the first defendant and the
balance owing by the first defendant to the
plaintiffs. We need not
concern ourselves with these latter allegations in that, during the
hearing before the magistrate, the
plaintiffs confined their claim
to an amount of R178 500, an amount conceded by the third defendant
(in her opposing affidavit)
as indeed being due by the first
defendant to the plaintiffs. The third defendant’s opposition
to the summary judgment
proceedings thus stands or falls by her
reliance on duress.
The elements necessary
to set aside a contract on the ground of duress were described by
Corbett J in
Arend
& another v Astra Furnishers (Pty) Ltd
8
as follows:
‘
[I]t
is clear that a contract may be vitiated by duress
(metus)
,
the
raison
d’etre
of
the rule apparently being that intimidation or improper pressure
renders the consent of the party subtracted to duress no true
consent. . . Duress may take the form of inflicting physical violence
upon the person of a contracting party or of inducing in
him a fear
by means of threats. Where a person seeks to set aside a contract, or
resist the enforcement of a contract, on the ground
of duress based
on fear, the following elements must be established:
The
fear must be a reasonable one.
It
must be caused by the threat of some considerable evil to the
person concerned or his family.
It
must be the threat of an imminent or inevitable evil.
The
threat or intimidation must be unlawful or
contra bonos mores.
The
moral pressure used must have caused damage.’
9
To assess the third
defendant’s defence of duress, it will be useful at this stage
to repeat the material part of her affidavit
opposing summary
judgment:
‘
The
First Plaintiff then started attacking my character, accusing me of
being a thief, and further threatening that if Second Defendant
and I
did not sign the documentation which they had presented to us, they
would report us to the Commercial Unit of the SAPS, and
also inform
my husband.
The
First Plaintiff was well aware of the fact that I am petrified of my
husband who previously held a high position within the
Directorate of
Special Operations (Scorpions), and that I would do anything to
prevent the Plaintiffs from making contact with
him to inform him of
the First Defendant’s precarious financial position.’
(Emphasis
added.)
Reliance
on the highlighted part of the affidavit set out in the preceding
paragraph is misplaced. It does not even approximate
a defence that
the agreements are vitiated by duress. The threat is not unlawful –
it appeared to be common cause that
the first defendant was in a
precarious financial position and the communication of this fact to
anyone could hardly be considered
unlawful. The third defendant does
not dispute the fact that the first defendant was indebted to the
plaintiffs or that she signed
the two agreements. The concern that
she expresses is that her husband will come to know of the first
defendant’s financial
position. That her husband might react
badly to learning of the first defendant’s financial position
can hardly be regarded
as duress on the part of the plaintiffs.
The
crux of the third defendant’s asserted duress is that it was
the fear of communication to or contact with her husband
on that
aspect that drove her to signing the agreements. There is no direct
allegation in the affidavit referred to the preceding
paragraph and
in para 7 above that it was fear or pressure in respect of the other
aspects mentioned that caused the third defendant
to sign the
agreements. In any event, a report to the Commercial Unit of the
SAPS would not, to any right-minded person not guilty
of any
criminal wrongdoing, have constituted a threat. A loan agreement and
a suretyship agreement were in issue. There is no
discernable link
to any criminal conduct deserving the attention of the police.
It
must also be remembered that, although the confrontation between the
plaintiffs and, inter alia, the third defendant took place
on 30
October 2008, the loan agreement and deed of suretyship were signed
only on 11 November 2008. The third defendant made
no allegation
that she had any contact whatsoever with the plaintiffs during this
12-day period. It is also not stated in her
affidavit whether,
during this 12-day period, either plaintiff made any attempt to
carry out any of their alleged ‘threats’
by contacting
either the SAPS or the third defendant’s husband. She also did
not indicate whether, during this period,
she sought legal advice or
in any other way attempted to avert the evil which she allegedly
feared. This lapse of time makes
the defence of duress even more
implausible.
In
light of the above, it is clear that the third defendant’s
affidavit opposing summary judgment has not disclosed a bona
fide
defence of duress to the plaintiffs’ claim.
Counsel
for the third defendant contended that, even if it be found that
third defendant’s affidavit lacks particularity
regarding the
material facts relied upon and falls short of the requirement of the
sub-rule, the court may still, in an appropriate
case, exercise its
discretion in favour of the third defendant and refuse summary
judgment if there is doubt as to whether the
plaintiffs’ case
is unanswerable.
10
He argued that this was
such a case and that the court below should have exercised its
discretion in the third defendant’s
favour.
As
was pointed out in
Breitenbach
v Fiat SA (Edms) Bpk
11
the court’s
discretion in this regard ‘should not be exercised against a
plaintiff on the basis of mere conjecture
or speculation. It should
be exercised on the basis of material before the Court.’ In
this case, the material before the
court is such that there is
simply no basis for the exercise of a residual discretion against
the plaintiffs and in favour of
the third defendant.
The
plaintiff sought an an award of costs on an attorney and
own
client scale, at all the
relevant levels. This type of cost order had been foreshadowed in
the provisions of both the loan agreement
and the suretyship
agreement. However, when questioned as to the difference (if any)
between attorney and
own
client costs, on the one
hand,
and
attorney and client costs, on the other,
12
counsel indicated that
he was prepared to formulate the relief sought by the plaintiffs so
as to claim attorney and client costs
throughout.
The following order is
therefore made:
1 The appeal is upheld
with costs on the scale as between attorney and client.
2 The order of the court
below is set aside and replaced with the following:
‘
1. The appeal is
dismissed with costs on the scale as between attorney and client
scale.
2. The magistrate’s
order is amended to the extent reflected in the substituted order set
out hereafter.
3. Summary judgment is
granted against the first and third defendants, jointly and
severally, the one paying the other to be absolved,
as follows:
3.1 payment of the sum of
R178 500;
3.2 interest on the said
sum at the rate of 15.5 per cent per annum from 4 August 2009 to date
of payment;
3.3 costs on the scale as
between attorney and client.’
______________________
b j van heerden
JUDGE OF APPEAL
appearances:
appellantS: A D MAHER
Instructed by Johnston
Cornelius Attorneys, Cape Town
Webbers, Bloemfontein
respondeNT: R RANDALL
Instructed by Abrahams &
Gross Inc, Cape Town
Lovius-Block,
Bloemfontein
1
The
Magistrates’ Court Rules were subsequently amended by GN R740
in
GG
33487 dated 23 August 2010.
2
See,
eg,
Van Eeden v Sasol Pensioenfonds
1975 (2) SA 167
(O) at
177E-178C. See also
Breitenbach v Fiat SA (Edms) Bpk
1976 (2)
SA 226
(T) at 228C-E;
Maharaj v Barclays National Bank Ltd
1976
(1) SA 418
(A) at 426A-E.
3
Joob
Joob Investments (Pty) Ltd v Stocks Mavundla Zek Joint Venture
2009
(5) SA 1
(SCA).
4
Paras
32-33.
5
Referred
to in fn 2 above.
6
At
426A-E,cited by Navsa JA in
Joob Joob Investments (Pty) Ltd v
Stocks Mavundla Zek Joint Venture
para 24 fn 11.
7
See
also
Tesven CC & another v South African Bank of Athens
2000 (1) SA 268
(SCA) paras 22-23.
8
Arend
& another v Astra Furnishers (Pty) Ltd
1974
(1) SA 298
(C).
9
At
305 in fin – 306C. See also
Paragon Business Forms (Pty)
Ltd v Du Preez
1994 (1) SA 434
(SE) at 439A-E;
BOE Bank Bpk v
Van Zyl
2002 (5) SA 165
(C) para 36;
Shoprite Checkers (Pty)
Ltd v Jardim
2004 (1) SA 502
(O) paras 10-11. See also Schalk
van der Merwe, LF van Huyssteen, MFB Reinecke & GF Lubbe
Contract General Principles
3 ed (2007) at 117ff; RH Christie
& GB Bradfield
Christie’s The Law of Contract in South
Africa
6 ed (2011) at 313ff and the other authorities cited by
these authors.
10
At
the time of this case, this discretion was to be found in
Magistrates’ court rule 14(6), the relevant part of which
provided that ‘the court may, if the defendant does not so. .
. satisfy the court, give summary judgment for the plaintiff.’
The same provision is to be found in the new rule 14(5), the wording
of which is almost identical to that of Uniform rule 32(5).
Magistrates’ court rule 14(5) provides that ‘[i]f the
defendant does not . . . satisfy the court as provided in subrule
(3), the court may enter summary judgment in favour of the
plaintiff.’
11
At
229F.
12
See
Thoroughbred Breeders’ Association v Price Waterhouse
2001
(4) SA 551
(SCA) para 92;
L & P Plant Hire Bpk & others v
Bosch & others
2002 (2) SA 662
(SCA) para 41.