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2023
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[2023] ZAFSHC 230
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Carospan (Pty) Limited t/a Nashua Bloemfontein v Jager (Pty) Limited and Another (5144/2022) [2023] ZAFSHC 230 (5 June 2023)
IN THE HIGH COURT
OF SOUTH AFRICA,
FREE STATE
DIVISION, BLOEMFONTEIN
Case number: 5144/2022
REPORTABLE: YES/NO
OF
INTEREST TO OTHER JUDGES: YES/NO
CIRCULATE TO MAGISTRATES:
YES/NO
In the matter between:
CAROSPAN
(PTY) LIMITED t/a NASHUA
BLOEMFONTEIN
Applicant
/ Plaintiff
And
JAGER
(PTY) LIMITED
1st
Respondent/ Defendant
IVAAN
DE JAGER
2
nd
Respondent/ Defendant
HEARD
ON:
09 FEBRUARY 2023
JUDGMENT
BY:
DANISO, J
DELIVERED
ON:
This
judgment was handed down electronically by circulation to the
parties' representatives by email and by release to SAFLII. The
date
and time for hand-down is deemed to be 05 June 2023 at 11H30.
[1]
These opposed proceedings involve an application for summary judgment
as well as an application
to strike out of the affidavit resisting
summary judgment (opposing affidavit) some allegations on the basis
that they are among
other things vexatious, malicious and irrelevant.
[2]
The summary judgment application arises from the action instituted by
the applicant as plaintiff
against the respondents as defendants for
payment of arrear rentals in the amount of R149 588.44, damages
flowing from the
early termination of a rental agreement in the
amount of R3 884 843.75 together with interest and costs.
The applicant
also seeks the return of the rented goods.
[3]
The relief sought is predicated on a breach of a Master Rental
Agreement (the rental agreement)
concluded by the parties on 28
November 2019
[1]
in terms of
which the first respondent represented by the second respondent hired
and received solar systems (the goods) from the
applicant at a
monthly rental of R155 393.75. The rental agreement was to
endure for a period of sixty (60) months with effect
1 December 2019
and the second respondent stood surety for the first respondent’s
debt.
[2]
[4]
With regard to the striking out application, the applicant is
aggrieved by the allegations averred
by the respondents in paragraphs
6.7 and 6.7.1 of the opposing affidavit. The applicant contends that
the allegations are irrelevant,
scandalous and vexatious.
[5]
I deem it apposite to first deal with the striking out application.
The striking out
application
[6]
In the opposing affidavit, the fact that the second respondent signed
the rental agreement and
the deed of suretyship is not disputed. It
is also undisputed that the first respondent is indebted to the
applicant in the amount
claimed.
[7]
The summary judgment is opposed on the grounds that the rental
agreement is actually a simulated
agreement in that, the parties
concluded a verbal loan agreement pursuant to negotiations between
the second respondent and the
applicant duly represented by Mr Mario
Engelbrecht. In terms of the said agreement, the loaned the
first respondent an amount
of R5 750 000.00 repayable
within the period of sixty (60) months by way of instalments of
R155 393.75 per month.
The oral agreement was later reduced into
writing, the second respondent was told that ‘they will simply
twist the truth
if necessary’ and when the agreement was later
presented to the second respondent he signed it under the mistaken
belief
that it was a loan agreement. He thought the word “
rental
”
translates to the Afrikaans word “
lening
” and this
is because his English is not great, his home language is Afrikaans.
(Paragraphs 6.1 to 6.4 of the opposing affidavit).
[8]
The impugned allegations relate to threats allegedly made to the
second respondent by the applicant’s
attorneys and their
collusion with the applicant in the dissimulation of the loan
agreement as a rental agreement. They read thus:
“
6.7.
Once the First Defendant defaulted with payments, I was summoned to
attend a meeting at the offices of Peyper Attorneys
where the
deponent, Mario, Sonel Pienaar (Attorney of Record) and Hannes Peyper
were present, at which meeting I was threatened
with being locked up
for inter alia fraud if arrear payments were not made.
6.7.1. All of
the aforementioned people knew exactly what the true agreement
constituted as and will be called upon to testify
at trial to the
true nature of the agreement between the parties and to explain the
collusion with the Plaintiff to mala fide conclude
credit agreements
cloaked as rental agreements to inter alia circumvent statutory
framework.”
[9]
It is the applicant’s case that these allegations are unmoored
from any of the issues arising
from the pleadings. They are also
contradictory to the respondent’s asserted background facts
namely that, the parties concluded
an oral agreement which was later
reduced into a written rental agreement which was signed by the
second respondent on the mistaken
belief that it was a loan
agreement.
[10]
The applicant does not deny that subsequent to the first respondent’s
default on the instalments a
meeting was convened between the
applicant’s attorneys and the second respondent. The applicant
states that the meeting was
solely for settlement negotiations, no
threats were made against the second respondent. These allegations
are therefore vexatious,
defamatory and malicious, they must be
struck out from the opposing affidavit.
[11] On
the other side, the respondents insist that the impugned allegations
are not scandalous and the applicant
has failed to show that it will
be prejudiced if the allegations are allowed to stand. The
respondents contend that the allegations
are relevant to these
proceedings and the court should not disregard the respondents’
version that the applicant provided
a loan to the respondents and
then disguised it as a rental agreement.
[12] I
do not agree with the respondents’ contentions for the reason
that, the serious allegations of dishonesty
and unethical conduct
levelled against the applicant including its attorneys in the
respondents’ opposing affidavit are not
relevant to the issue
of the respondents’ liability. They are simply spurious as they
do not even tally with the averments
upon which the respondents’
defence is based, see paras 6.1 to 6.4 thereof.
[13] I
have thus come to a conclusion that if the allegations are allowed to
stand the applicant will be associated
with dishonest, fraudulent and
unethical business practices without any factual basis. Accordingly,
the application ought to succeed
with costs. I am however not
persuaded that respondents’
conduct is so reprehensible to warrant a
punitive cost order.
The summary
judgment application
[14]
The plea and the opposing affidavit raise points
in
limine.
It
is the respondents’ submission that the first respondent is
under business rescue and in terms of section 133 of the Companies
Act
[3]
(the Act) no legal
proceedings can be instituted against a company under business
rescue. The applicant has also failed to join
Mr Marius Van Straaten
(Van Straaten) as co-defendant/respondent and this is despite the
fact that Van Straaten represented the
first respondent during the
conclusion of the agreement and he also signed the deed of suretyship
as co-surety.
[15]
The applicant disagrees and contend that the general moratorium
placed on legal proceedings by section 133
of the Act does not apply
in the circumstances where legal proceedings against a company are
premised on a claim which involves
the delivery of specified movable
property pursuant to the cancellation of a rental agreement. Section
133 also does not does not
offer refuge to the second respondent as
it is a defence which accrues to a company in business rescue.
Regarding the complainant
against non-joinder, it is the applicant’s
case that Van Straaten did not sign the deed of suretyship therefore
it was not
necessary for the applicant to join him in the action and
in these proceedings.
[16]
Section 133 of the Act provides:
“
General
moratorium on legal proceedings against company
(1)
During business rescue proceedings, no legal proceeding, including
enforcement action, against
the company, or in relation to any
property belonging to the company, or lawfully in its possession, may
be commenced or proceeded
with in any forum, except –
(a)
with the written consent of the
practitioner;
(b)
with the leave of the court and in
accordance with any terms the court considers suitable...;
[17]
On the facts germane to this matter, it is indisputable that having
regard to the terms of the rental agreement,
[4]
the applicant would be entitled to the return of the goods upon
breach of the rental agreement therefore, it cannot be said that
the
first respondent’s possession of the goods is lawful as
provided for in section 133 (1) and section 133 does not prohibit
legal proceedings pertaining to the recovery of property which does
not belong to a company under business rescue. See in this
regard
Timasani
(Pty) Ltd (in business rescue) and Another v Afrimat Iron Ore (Pty)
Ltd
[5]
at paras 30 to 34 where it is stated that:
“
the
cancellation of an instalment sale agreement by a creditor rendered
unlawful the continued possession by a company in business
rescue of
the goods that formed the subject matter of that agreement. This
Court held that although the moratorium in s 133(1)
of the Act grants
the company breathing space, the legislature did not intend to
interfere with contractual rights and obligations
of parties to an
agreement.
”
[18]
It is also explained that the defence as incorporated in section 133
is only available to a company under
business rescue.
[6]
[19]
As regards the issue of non-joinder, Uniform Rule 10 (3) stipulates
that
several
defendants may be sued in one action either jointly or in the
alternative jointly and severally, when the triable issue
that arise
in an action stands to be determined on substantially the same
question of law or fact which, if such defendants were
sued
separately, would arise in each separate action. In
Judicial
Service Commission and Another v Cape Bar Council and Another
[7]
the provisions of rule 10(3) were expounded on as follows:
“
It
has now become settled law that the joinder of a party is only
required as a matter of necessity as opposed to a matter of
convenience-
if that party has a direct and substantial interest
which may be affected prejudicially by the judgment of the court in
the proceedings
concerned….”
[20]
The examination of the rental
agreement and the deed of suretyship reveals that the respondents’
contention that Van Straaten
represented the first respondent during
the conclusion of the rental agreement and also signed the deed of
suretyship as surety
is false. It is the name, surname and signature
of the second respondent that appears on the rental agreement as the
representative
of the first respondent. While it is indeed so that
Van Straaten’s name and surname also appears on the deed of
suretyship,
he did not sign the it as a co-surety therefore it cannot
be said that he has a direct and substantial interest in these
proceedings.
They involve the enforcement of agreements he is not
party to as he did not sign them. His joinder would thus be
incompetent.
[21]
Based on these reasons above, the respondents’ points in
limine
ought to fail and they are accordingly dismissed.
[22]
With regard to the merits of the application. It is trite that a
summary judgment procedure is intended to
ensure that a defendant
with a triable issue or a sustainable defence has its day in court
and that recalcitrant debtors pay what
is due to their creditors.
[8]
[23] It
is indisputable that the second respondent representing the first
respondent signed the rental agreement
including the suretyship
agreement. In the plea and the opposing affidavit liability is
disputed on a cocktail of defences varying
from the invalidity and
the unenforceability of the agreements on the grounds the second
respondent was not aware that he was signing
a rental agreement to
the assertion that the rental agreement is a simulated agreement. The
respondents also complain that they
are unable to plead to the
applicant’s claim due the illegibility of the copies of the
agreement annexed on the particulars
of claim (the rental agreement
and the suretyship agreement) as well as the applicant’s
failure to attach the certificates
of balance (Annexures “C”
and “D”) referred to in the particulars of claim.
[24]
Having appended his signature on the rental agreement the second
respondent is taken to be bound by what
appears above his signature
whether or not he had understood what the agreement entailed or what
he thought it involved before
signing it and would thus be liable to
perform the terms of that agreement. In
South
African Railways & Harbours v National Bank of South Africa
Ltd
[9]
it was pointed out that:
“
The
law does not concern itself with the working of the minds of parties
to a contract, but with the external manifestation of their
minds.
Even therefore if from a philosophical standpoint the minds of the
parties do not meet, yet, if by their acts their minds
seem to have
met, the law will, where fraud is not alleged, look to their acts and
assume that their minds did meet and that they
contracted in
accordance with what the parties purport to accept as a record of
their agreement. This is the only practical way
in which Courts of
law can determine the terms of a contract.”
[25]
The fact that the second respondent confirmed receipt of the rented
goods and also provided the required
insurance also puts paid to the
respondents’ contention that there was no rental agreement
concluded including the denial
of delivery of the goods. Annexures
“FA3” and “FA4” of the applicant’s
founding affidavit are copies
of the “
CONFIRMATION OF
RECEIPT OF GOODS BY THE USER
” and “
CONFIRMATION OF
COVER FOR COMPLETE SOLAR SYSTEM
” signed by the second
respondent in that regard.
[26]
The respondents’ complaints that they have been rendered unable
to plead to the applicant’s claim
because the attached copies
of the agreements are illegible and that the applicant failed to
attach the copies of the certificates
of balance on the particulars
of claim are in my view, without merit and disingenuous. For the
reason that, having regard to what
is deliberated in the plea the
respondents have been able to respond to the applicant’s claim
and also set out their defences
on the merits. That aside, all the
annexures complained about were attached on the applicant’s
founding affidavit as provided
for in Uniform Rule 32 (2)(c).
[27] On
the available facts, the applicant’s claim against the
respondents has been clearly established.
I am not persuaded that the
respondents’ defence as pleaded and also set out in the
opposing affidavit discloses a bona fide
defence that is good in law
to result in a triable issue.
[28]
In the circumstances,
following
order is granted:
1.
The
allegations
contained in paragraphs 6.7 and 6.7.1 of the respondents’
opposing affidavit are struck out as irrelevant, scandalous
and
vexatious.
2.
The respondents shall pay the costs jointly
and severally one paying the other to be absolved.
3.
Judgment is granted against the respondents
jointly and severally for:
3.1.
Payment of R149 588.44 together with
interest at the prevailing rate per annum plus 6% calculated from 01
October 2022 to date
of final payment.
3.2.
Payment of R3 884 843.75 together
with interest at the prevailing rate per annum plus 6% calculated
from the date of service
of summons to the date of final payment.
3.3.
Return of the goods as contained in the
schedule of the rental agreement; and
3.4.
Cost of suit on an attorney and client
scale.
N.S. DANISO, J
APPEARANCES:
Counsel
on behalf of the applicant:
Adv.
W.A. Aswegen
Instructed
by:
Peyper
Attorneys
sonel@peyperattorneys.co.za
BLOEMFONTEIN
Counsel
on behalf of the respondents:
Adv.
E.G. Lubbe
Instructed
by:
Rosendorff
Reitz Barry
christa@rosendorff.co.za
BLOEMFONTEIN
[1]
The
copy of the agreement is annexed to the particulars of claim as
Annexure “A”.
[2]
The
copy of the deed of suretyship is annexed to the particulars of
claim as Annexure “E”.
[3]
Act
No, 71 of 2008.
[4]
Clause
2,9 and 9.2 of the rental agreement.
[5]
(91/2020)
[
2021]
ZASCA 43
(13 April 2021).
[6]
Timasani
,
para 28.
[7]
2013
(1) SA 170
(SCA)
at para 12.
[8]
Maharaj
v Barclays National Bank Ltd
1976
(1) SA 418
(A) at 425G-426E;
Joob
Joob Investments v Stocks Mavundla Zek Joint Venture
[2009]
All SA 407
(SCA).
[9]
1924
AD 704
at pages 715-6.