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[2023] ZAKZPHC 40
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ABSA Bank Limited v Singh N.O. and Others (5034/2020P) [2023] ZAKZPHC 40 (12 April 2023)
FLYNOTES:
SURETIES AND DEFENCES TO CLAIM
CONTRACT
– Loan – Surety – Respondents standing as
sureties for company – Later loan agreement recording
that
additional security be put up but this not done – Sureties
arguing prejudice in response to claim from bank –
Wording
of deeds of suretyship such that they stood alone –
Circumstances also showed respondents to have acquiesced
in loan
proceeding without new security – Provision requiring new
security not a condition precedent but merely a term
of the loan
agreement – Judgment granted.
IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
Case
No: 5034/2020P
In
the matter between:
ABSA
BANK LIMITED
APPLICANT
and
HEMANTH
RAJKUMAR SINGH N.O.
FIRST RESPONDENT
BALAN
NAIDOO N.O.
SECOND RESPONDENT
PRAVESH
RAJKUMAR SINGH N.O.
THIRD RESPONDENT
HEMNATH
RAJKUMAR SINGH
FOURTH RESPONDENT
Coram:
Mossop J
Heard:
14 March 2023
Delivered:
12 April 2023
ORDER
The
following order is granted:
1.
The respondents’ application to deliver a further answering
affidavit is refused, with costs on the attorney and
client scale.
2.
Judgment is entered against the respondents jointly and severally,
the one paying the other to be absolved, for:
(a)
Payment of the sum of R18 039 598.59;
(b)
Interest thereon at the rate of 8,25% (prime plus 1.00%) per annum
capitalised monthly from 2
June 2020 to date of payment, both days
included;
(c)
Costs of suit on the scale as between attorney and client.
JUDGMENT
MOSSOP
J:
[1]
The applicant is a major South African financial institution.
In this application, which is opposed by the respondents, it seeks
a
monetary judgment against them, jointly and severally, for payment of
the sum of R18 039 598.59 (the judgment amount), interest
thereon at
the prime interest rate charged by it plus one percent, and costs on
the attorney and client scale. The first three
respondents are cited
in their representative capacities as trustees of the H. R. Singh
Family Trust (the Trust) and the first
respondent is also cited in
his personal capacity as the fourth respondent.
[2]
When the matter was argued, the applicant was represented by
Mr van Rooyen and the respondents were represented by Mr Alberts.
Both
counsel are thanked for the assistance that they have provided
to the court.
[3]
The
applicant’s case is simply framed and pleaded. It is brought on
application, on the basis that there is no major dispute
of fact
between it and the respondents.
[1]
It alleges that on 26 October 2018, it concluded a written term loan
agreement (the loan agreement) with an entity known as Proud
Heritage
217 (Pty) Ltd (the company). In terms of the loan agreement, the
applicant agreed to lend the company an amount of approximately
R19
million (the loan amount). The purpose behind the loan is set out on
the first page of the agreement and was:
‘
To
restructure the outstanding obligations of Divine Inspiration Trading
350 (Proprietary) Limited, together with all existing obligations
of
Proud Heritage 217 (Proprietary) Limited into a new term loan on the
basis as set out herein.’
While
the loan agreement was a consolidation of the then existing
indebtedness of both entities mentioned in the extract above,
the
obligation to repay the loan amount was accepted by the company.
[2]
The loan amount would attract interest at the interest rate mentioned
earlier, which was to be a variable rate, and it was to be
repaid,
not in monthly instalments, but in weekly payments by the company,
commencing with the first payment on 2 November 2018
and concluding
with the last payment on 2 November 2028, ten years later. The
applicant and the company agreed that the company
would be in breach
of the loan agreement if it neglected to pay any instalment on the
due date or if it was liquidated. If either
of those events, inter
alia, occurred, the applicant would be entitled to require the
company to immediately discharge the whole
of its indebtedness to the
applicant. The loan agreement also provided that any default under
the loan agreement that required
the applicant to enforce its rights
would require the company to pay the applicant’s costs on the
attorney and own client
scale.
[3]
[4]
The loan agreement, whilst between the applicant and the
company, also had other signatories. It was also signed by the fourth
respondent
in his personal capacity, the Trust, an entity called
Exclusive Access Trading (Pty) Ltd (EAT), and an entity called
National Pride
Trading (Pty) Limited (National Pride). The Trust, EAT
and National Pride were represented by the fourth respondent, who
asserted
that he was duly authorised to sign on their behalf. These
latter signatories were presumably included because of the security
they were required to put up on behalf of the company, to which
further reference will be made shortly.
[5]
On 3 January 2020, the company was, indeed, subject to
winding up proceedings at the instance of another of its creditors,
not at the instance of the applicant, which order was made final on
16 July 2020. The entire balance then owing by the company
to the
applicant, being the judgment amount, thus became payable in terms of
the loan agreement. The judgment amount has been calculated
and
expressed in a certificate of balance issued by the applicant, as it
was entitled to do in terms of the loan agreement
and
in terms of the two deeds of suretyship dealt with below.
[6]
Approximately five years before the conclusion of the loan
agreement, the Trust had agreed to stand as surety for the
obligations
of the company to the applicant. Thus, on 26 November
2013 it had executed a written deed of suretyship that recorded that
fact.
That deed of suretyship was in an unlimited amount. On that
same day, 26 November 2013, the fourth respondent also bound himself
in his personal capacity as a surety to the applicant for the
obligations of the company. This latter deed of suretyship was
limited
to the amount of R32 million. These are the deeds of
suretyship that the applicant relies upon for the judgment that it
seeks against
the respondents in this application.
[7]
Upon the liquidation of the company, the applicant called upon
the respondents to make payment in terms of their respective deeds
of
suretyship. When such payments were not forthcoming, this application
was the inevitable consequence.
[8]
At the commencement of the matter, Mr Alberts moved an
application on behalf of the respondents to admit a second,
supplementary
answering affidavit (the further affidavit) on behalf
of the respondents. The application was a substantive one supported
by an
affidavit and was opposed by Mr van Rooyen on behalf of the
applicant. Far from seeking leave to hand up the further affidavit,
it had already been delivered and was in the court file, without the
leave of the court first having been obtained. Chronologically,
the
delivery of the further affidavit occurred 11 months after the
initial answering affidavit was delivered. This application
drew its
first breath in August 2020 and is long outstanding. As Mr Van Rooyen
pointed out, the matter would be delayed further
if the application
was granted as the applicant would be compelled to reply thereto.
[9]
Uniform
rule 6(5)(e) provides that the filing of further affidavits is only
permitted with the indulgence of the court. An application
to deliver
a further affidavit, if properly brought, should in my view, only be
granted if good reasons are provided for the granting
of this
indulgence by the party seeking it.
[4]
The question is not whether the handing up of a further affidavit
will be prejudicial to the other side. Rather the issue is whether
the party seeking to deliver the further affidavit has established
exceptional circumstances which render it fair to permit its
acceptance.
[5]
[10]
In
seeking such leave, some explanation must also be provided dealing
with why the new material contained in the further affidavit
did not
appear in the initial affidavit. The only real reason advanced in the
affidavit that underpinned the respondents’
application is that
the respondents, having appointed one attorney then terminated the
first attorney’s mandate and then
appointed a second attorney.
The second attorney then decided to brief counsel, who determined
that a further affidavit should
be delivered. That is not a
sufficiently compelling reason to permit the delivery of a further
answering affidavit and is certainly
not an exceptional
circumstance.
[6]
No explanation
was provided as to why what is now stated in the supplementary
affidavit was not stated in the initial answering
affidavit. The
attempted delivery of a further affidavit appeared simply to be a
stratagem to further delay this matter. In the
exercise of my
discretion I accordingly refused the respondents’ application,
with costs. Those costs must be on the scale
as between attorney and
client in accordance with the provisions of the loan agreement and
the deeds of suretyship.
[11]
Before considering the defences raised by the respondents, it
is necessary to discuss certain other aspects of the loan agreement
which have come to assume some significance in the light of the
specific defences raised by the respondents.
[12]
The loan agreement recorded that the applicant already held
certain security for the obligations of the company. In schedule 1 to
the agreement (schedule 1), all the security that it already held in
respect of the company was identified and included:
(a)
A second deed of suretyship limited to the amount of R20 million,
executed by the Trust on 28 April 2016;
(b)
A second deed of suretyship limited to the amount of R20 million,
executed by the fourth respondent on 28 April 2016;
(c)
A general cession of all trade receivables due to the company,
executed by the company on 28 April 2016;
(d)
A guarantee limited to the amount of R9 million, executed by
National Pride on 23 January 2017; and
(e)
A deed of suretyship limited to R5 million, executed by EAT on 26
November 2013.
In
addition to this security, there were also the two deeds of
suretyship relied upon by the applicant for the judgment that it
seeks in this application, although in schedule 1 the deed of
suretyship binding the fourth respondent is incorrectly described
as
having been concluded on 6 November 2013 and not on 26 November 2013.
[13]
Notwithstanding the existence of this security, the loan
agreement recorded that the parties agreed that additional security
was
to be put up. This security was identified in schedule 2 to the
loan agreement and comprised of:
(a)
A general notarial bond (the notarial bond) to the value of R8
million that the company was required to pass over its moveable
assets;
and
(b)
The cession of an insurance policy held by EAT in respect of
property that is described as being ‘the encumbered property’.
What the connection of EAT to this matter is, and to what property
reference is being made, was never explained. It is, however,
safe to
assume that there is some link between EAT, the company and the
Trust, as EAT was apparently persuaded to agree to cede
its insurance
policy and had previously also put up a deed of suretyship. Indeed,
EAT, as previously mentioned, was a party to
the loan agreement and
the fourth respondent signed that document on its behalf.
[14]
It is common cause that the new security was never put up: The
notarial bond was never registered and the cession of the insurance
policy did not occur. I did not understand what security the
insurance policy provided given its vague description in the loan
agreement.
I asked Mr Alberts about this during
argument, but he was as informed about it as I presently am. He
ultimately submitted that the
failure by EAT to cede the policy to
the applicant was not an issue upon which the respondents relied if I
understood him correctly.
[15]
Given that the bringing into existence of the two deeds of
suretyship relied upon by the applicant in this application predated
the conclusion of the loan agreement by approximately five years,
there can be no suggestion that the requirement of the new security
was a material factor in the respondents becoming sureties or that
the failure to secure the new security in itself prejudiced
the
respondents in agreeing to their respective deeds of suretyship.
[16]
In
seeking the judgment that it does, the applicant is obviously seeking
final relief. As such, I must apply the principles set
out in
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd.
[7]
To create a valid dispute of fact, the respondents must, however,
seriously and unambiguously address any disputed facts. This
is
particularly so where those facts are peculiarly within the knowledge
of the respondents.
[17]
I turn now to consider the respondents’ defences. I,
however, immediately qualify my intent by stating that I do not
propose
dealing with issues that were raised in the papers but which
were then not persisted with by the respondents’ counsel when
the matter was argued. I shall focus on those issues that are set out
in Mr Alberts’s heads of argument and which formed
the basis of
the argument addressed to me by Mr Alberts.
[18]
The principal, but not the only, defence raised by the
respondents is a multi-layered defence that commences with the
proposition
that the granting of the loan amount to the company by
the applicant, coupled with a failure to secure the new security,
prejudiced
the position of the respondents as sureties. It was argued
further that the furnishing and registration of the new security was
a condition precedent to the advancing of the loan to the company. It
was not disputed that the loan amount was advanced by the
applicant.
It is, however, contended by the respondents that in advancing the
loan amount without the new security being in place,
the applicant
was reckless or negligent, or both. The argument proceeds that had
the loan not been advanced in such circumstances,
the respondents
would not be in the position that they are now in and accordingly, so
they contend, they should be discharged from
their obligations as
sureties and the application should be dismissed with costs.
[19]
I
shall consider the prejudice aspect of the principal defence first.
In
the often-quoted matter of
Absa
Bank Ltd v Davidson
,
[8]
the Supreme Court of Appeal considered the proposition that there is
a general principle in our law that dictates that if a creditor
does
anything in its dealings with a principal debtor that has the effect
of prejudicing a surety, the surety is entitled to claim
his full
release from his obligations. Olivier JA stated in this regard that:
‘
As
a general proposition prejudice caused to the surety can only release
the surety (whether totally or partially) if the prejudice
is the
result of a breach of some or other legal duty or obligation. The
prime sources of a creditor's rights, duties and obligations
are the
principal agreement and the deed of suretyship. If, as is the case
here, the alleged prejudice was caused by conduct falling
within the
terms of the principal agreement or the deed of suretyship,
the prejudice suffered was one which the surety undertook
to
suffer.
’
[9]
[20]
The starting point when assessing a defence where prejudice is
claimed by a surety must logically be the provisions of the deed of
suretyship concluded.
As was stated by Harms JA
in
Bock and others v Duburoro
Investments (Pty) Ltd
, citing Voet:
‘
agreements
make the law for contracts, and therefore for suretyships also . .
.’
[10]
[21]
The two deeds of suretyship are very similar in their content
but are not identical. They do, however, have certain clauses that
are identical. Both deeds of suretyship contain the following clause:
‘
The
validity and enforceability of this suretyship shall in no respect be
subject to the obtaining of a suretyship from another
person or be
subject to the validity of the suretyship of any other surety.’
In
other words, the deeds of suretyship stand alone and do not require
the applicant to obtain any additional deed of suretyship
for them to
be valid and binding on the Trust and the fourth respondent.
[22]
Both deeds of suretyship also contain an acknowledgement by
the surety that the applicant may:
‘
release
in whole or in part present or future security, including this
suretyship or the suretyship of co-sureties, in respect of
the
debtor’s obligations to the bank;’.
Thus,
future security, such as the new security, may be released by the
applicant as it determines. In my view, ‘release’
may in
this context have two meanings: it may mean that a person who
undertook to put up security is released from the obligation
of doing
so and thus never puts it up, or it can mean that security that has
already been put up is no longer required and is consequently
released.
I can see no difference between not
acquiring such security and acquiring it but then releasing it: the
effect is the same.
[23]
The respondents submit that the failure to obtain the new
security has prejudiced them. I confess, however, that I am not
entirely
sure what the basis of this dissatisfaction is or what the
prejudice complained of comprises.
[24]
Looked
at practically, the new security did not introduce a new security
provider to the raft of security already held by the applicant.
Excluding the cession of the insurance policy, the principal provider
of the new security was the company itself.
Regard
being had to the clause in the loan agreement that required the
provision of the new security, it is to be noted that the
agreement
did not impose any obligation on the applicant. The obligation was
placed on the entities providing the new security,
namely the company
and EAT. The applicant could not simply of its own volition acquire
the new security: it had to be placed in
possession thereof by the
parties providing it. The passing of the notarial bond
[11]
and the cession of the insurance policy thus did not lie within the
power of the applicant.
[25]
The fourth respondent was a director of the
company. I do not know if he was the sole director. He may well have
been, but I do
not know that to be the case. At the very least, the
fourth respondent would have been aware that prior to the loan amount
being
advanced by the applicant, the company had not passed the
required notarial bond. Why the notarial bond had not been passed was
within the knowledge of at least the fourth respondent, who acted in
both his personal and representative capacities. As director
of the
company and trustee of the Trust, the fourth respondent’s
knowledge binds himself and the Trust. Rather than protest
that the
new security was not in place, the company accessed the loan account,
drew down on the loan amount and utilised it. There
is no evidence
that the fourth respondent, or the Trust for that matter, raised any
objection to the fact that the new security
was not in place when the
company became entitled to draw down on the loan amount. In other
words, it seems to me that the respondents
acquiesced in the loan
proceeding without the new security being in place.
[26]
Acquiescence may be found to exist
where a:
‘
person
by unequivocal conduct, knowing of his or her rights, inconsistently
acts with the intention to the contrary and shows that
he acquiesced
to a set of facts’.
[12]
If
the person concerned has clearly and unconditionally acquiesced in,
and abided by, a situation, that person cannot thereafter
challenge
that situation.
[13]
What is
required is conduct leading to a conclusion of an intention not to
assail a factual position. Both as a director of the
company and as a
trustee of the Trust, the fourth respondent would have known whether
the company had passed the notarial bond.
He knew that it had not but
reconciled himself with that fact. While the respondents have all
complained that that the notarial
bond was not in place at the time
that the loan amount was accessed, no explanation has been provided
by at least the fourth respondent
why this had not occurred. It
appears to me to be inescapable that the respondents acquiesced in
the advancing of the loan amount
without the new security being in
place. They may thus not challenge the advancing of the loan without
such new security being
in place.
[27]
Considering the next layer of the principal defence, being
that the acquisition of the new security was a condition precedent to
the conclusion of the loan agreement, the respondents are correct in
asserting that there is a schedule to the loan agreement that
deals
exclusively with conditions precedent (schedule 4). The final
condition mentioned in schedule 4 is the following:
‘
Receipt
by the Bank of the New Security Required duly executed by the parties
thereto together with such.’
[28]
The
fact that the parties to a contract may describe a provision as a
condition precedent does not, of course, make it one. Whether
it is a
true condition precedent must be determined by the language employed
by the parties in writing their contract.
In
Capitec
Bank Holdings Ltd and another v Coral Lagoon Investments 194
(Pty) Ltd and others
[14]
the court stated that:
‘
[50] .
. . the meaning of a contested term of a contract . . . is properly
understood not simply by selecting standard definitions
of particular
words, often taken from dictionaries, but also by understanding the
words and sentences that comprise the contested
term as they fit into
the larger structure of the agreement, its context and purpose.
Meaning is ultimately the most compelling
and coherent account the
interpreter can provide, making use of these sources of
interpretation. It is not a partial selection
of interpretational
materials directed at a predetermined result.
[51]
Most contracts, and particularly commercial contracts, are
constructed with a design in mind, and their architects choose words
and concepts to give effect to that design. For this reason,
interpretation begins with the text and its structure. They have a
gravitational pull that is important. The proposition that context is
everything is not a licence to contend for meanings unmoored
in the
text and its structure. Rather, context and purpose may be used to
elucidate the text.
’
[29]
A true condition precedent, or suspensive
condition, suspends the operation of all or some of the obligations
flowing from a contract
until the occurrence of a future uncertain
event.
Whether a condition precedent is a
true condition precedent or is merely a term of an agreement may
often be difficult to determine.
It may require an interpretation of
the contractual provision. Why this should be the case was explained
in
R v Katz
:
‘
The
word “condition” in relation to a contract, is sometimes
used in a wide sense as meaning a provision of the contract,
i.e.
an accepted stipulation, as for example in the phrase
“conditions of sale”. In this sense the word includes
ordinary arrangements as to time and manner of delivery and of
payment of the purchase price, etc - in other words the so
called
accidentalia
of
the contract. In the sense of a true suspensive or resolutive
condition, however, the word has a much more limited meaning,
viz. of
a qualification which renders the operation and consequences of the
whole contract dependent upon an uncertain future
event . . .
Where the qualification defers the operation of the contract, the
condition is suspensive, and where it provides for
dissolution of the
contract after interim operation, the condition is resolutive . . .
In the case of true conditions the
parties by specific agreement
introduce contingency as to the existence or otherwise of the
contract, whereas provisions which
are not true conditions bind the
parties as to their fulfilment and on breach give rise to ordinary
contractual remedies of a compensatory
nature, i.e. (depending on the
circumstances) specific performance, damages, cancellation or certain
combinations of these.
’
[15]
[30]
A consideration of schedule 4 reveals it, in essence, to
simply be a list of documents that the company required to be given
by
either the company or the other signatories to the loan agreement.
The list does not appear to be entirely specific to this particular
transaction. For example, it requires any party to the loan agreement
that is incorporated outside South Africa to provide a legal
opinion
on the entitlement of the party to conclude what is described as ‘the
Finance Documents.’ None of the parties
to the agreement were
so incorporated. Some of the stipulations are vaguely worded. For
example:
‘
Receipt
by the Bank of such documentation and evidence as is required by the
Bank in order for it to carry out and be satisfied
it has complied
with all necessary ‘know your customer’ or similar
identification procedures under applicable laws
rules and
regulations…’
[31]
The loan agreement records that the loan
facility would be available for draw down by the company in a single
amount and that any
part of the facility not taken up on the draw
down date would lapse and would not thereafter be capable of being
accessed by the
company. It was further anticipated, following the
wording of the loan agreement, that the first instalment date would
be:
‘
The
1
st
Friday of the 1
st
calendar month post the date of draw down which shall not be earlier
than 02 November 2018.’
[32]
The first instalment date could, therefore,
notionally, have been 2 November 2018, which was a Friday. Given that
the agreement
was only signed on 26 October 2018, exactly a week
before 2 November 2018, it seems highly improbable that the new
security, in
particular the notarial bond, would be in place on 2
November 2018. This might tend to indicate that the provision of the
new security
was not a true condition precedent and was merely a term
of the agreement in the sense that the loan agreement would be given
effect
to notwithstanding that the new security may not have been in
place. That this is probable is reinforced by the standard terms of
the loan agreement which includes the following clause:
‘
Each
Condition Precedent is for our sole benefit and we may by written
notice to you waive or defer fulfilment of any Condition
Precedent,
in whole or in part, subject to any other condition we may decide.’
[33]
For a contractual provision to be construed as a true
condition precedent,
the operation and
consequences of the whole contract must be dependent upon an
uncertain future event. The passing of a notarial
bond does not
strike me as an uncertain future event where one of the entities
concluding the loan agreement that requires the
passing of the
notarial bond is the very party that is obligated to pass that
notarial bond. Far from being an uncertain future
event, it seems to
me to be a definite future event that was entirely within the ability
of the company to execute. I must therefore
conclude that despite the
wording of schedules 2 and 4, the provision requiring the new
security was not a condition precedent
but was merely a term of the
loan agreement. Notice of waiver from the applicant was therefore not
required.
[34]
There is, furthermore, no evidence on the papers that the
applicant was reckless or negligent in advancing the loan amount to
the
company. On the contrary, it appears to have been punctilious in
ensuring that it was properly protected in the event of the company
defaulting. That a third party creditor succeeded in liquidating the
company by no means establishes any of the conduct complained
of by
the respondents.
[35]
After a consideration of the principal defence, I am
unable to conclude that the applicant has breached any
legal duty or
obligation that it owed the respondents.
As was indicated above, the applicant
and respondents agreed in their respective deeds of suretyship that
the applicant had the
power to release any existing, or future,
security. Even assuming for the purposes of argument that the failure
to acquire the
new security was prejudicial to the respondents,
without accepting that it was and having found that it was not, it
appears to
me that this was a form of prejudice that the respondents
undertook to suffer in agreeing to the terms of their respective
deeds
of suretyship.
The fact that the respondents had put up
such extensive and substantial security for the obligations of the
company is the reason
why they find themselves in their current
position and not any conduct on the part of the applicant.
[36]
The principal defence consequently must fail.
[37]
That was not the only defence raised by the respondents. They
have also raised certain ancillary defences, ostensibly in the
alternative
to their principal defence. They contend that reasons
exist in the following allegations to dismiss the application:
(a)
The applicant failed to ensure that the company was sold for fair
value;
(b)
The certificate of balance put up by the applicant is allegedly
unreliable;
(c)
The applicant did not disclose dealings that it allegedly had
with the liquidator of the company and also did not explain certain
proceedings against EAT and a payment apparently received from an
entity called National Pride (Proprietary) Ltd;
(d)
The applicant has failed to provide a full and proper computation
of the amount that it claims from the respondents; and
(e)
The applicant has allegedly failed to establish its claim.
These
further defences must be considered.
[38]
As regards the first point, I am not sure if the sale being
referred to is alleged to have occurred prior to, or during, the
liquidation
of the company. If it is intended to refer to events
prior to liquidation it is not clear how the applicant could have
effected
such a sale when it was not the owner of the company nor did
it then have a judgment against it. If it is intended to refer to a
sale that occurred during the winding up of the company, it hardly
seems necessary to state that upon the event of liquidation
the
assets of the entity in liquidation fall under the control of the
liquidator. It is the duty of the liquidator and not that
of the
creditors to liquidate the company. There is no obligation on a
creditor to ensure that the assets of the liquidated company
achieve
a certain value. In its vagueness, the point is bereft of any merit.
[39]
Dealing with the second point, in terms of both deeds of
suretyship it was agreed that the applicant could establish the
indebtedness
of the company to it by way of a certificate signed by a
manager of the applicant whose appointment it would not have to prove
and that such certificate would be ‘sufficient (prima facie)
proof of this amount’.
As
was stated by Stratford JA in
Ex
parte the Minister of Justice: In re Rex v Jacobson and Levy
:
[16]
‘”
Prima
facie
”
evidence
in its more usual sense, is used to mean prima facie proof of an
issue the burden of proving which is upon the party giving
that
evidence.’
Such
a certificate has been put up. In such circumstances, the respondents
bear an evidential onus to establish that the certificate
is
incorrect that goes beyond merely alleging that it is unreliable.
[17]
Where
nothing is proved to disturb the prima facie proof of the content of
a certificate of balance, it becomes conclusive proof
of the facts
stated therein.
The
respondents have made no reference to any facts that could cast doubt
on the correctness of the certificate of balance put up.
The
suggestion that the certificate of balance is unreliable appears only
in the respondents’ counsel’s heads of argument.
There
is accordingly no basis for doubting the accuracy of what is stated
in the certificate of balance.
[40]
Turning to the third point, I should have been very surprised
if there had been no interaction between the applicant and the duly
appointed liquidator of the company. The applicant is obviously a
substantial creditor of the company and it is to be expected
that it
would have dealings with the liquidator. The suggestion by the
respondents is that there is something unsatisfactory about
this. I
am not able to share this sentiment in the absence of any facts
advanced to prop up this aspersion. What proceedings against
EAT are
being referred to and what payment apparently was received from
National Pride is not clear from the answering affidavit.
The point
must be dismissed.
[41]
The fourth point taken by the respondents is an allegation
that the applicant has not provided a full computation of the amount
owed to it by the company. This, with respect, misses the purpose of
a certificate of balance. The certificate of balance obviates
the
need for such a calculation unless it has properly been challenged. I
have already found that it has not been properly challenged.
This
point has no merit.
[42]
The final point taken, namely that the applicant has not made
out its case, is not a defence at all but is a conclusion. It, too,
is without merit. The applicant has established that the respondents
undertook to stand surety for the debts of the company to
the
applicant and have now been called upon to act in accordance with
that undertaking. They must honour it.
[43]
The principal and ancillary defences raised by the respondents
have all failed. There is accordingly no reason why the judgment
claimed by the applicant should not be granted.
[44]
In the circumstances, I grant the following order:
1.
The respondents’ application to deliver a
further answering affidavit is refused,
with costs on the
attorney and client scale.
2.
Judgment is entered against the respondents
jointly and severally, the one paying the other to be absolved, for:
(a)
Payment of the sum of R18 039 598.59;
(b)
Interest thereon at the rate of 8,25% (prime plus 1.00%) per
annum capitalised monthly from 2 June 2020 to date of payment, both
days included;
(c)
Costs of suit on the scale as between attorney and client.
MOSSOP
J
APPEARANCES
Counsel
for the applicant: Mr. R. M. van Rooyen
Instructed
by: MCH Attorneys Inc
Rydall
Vale Park
3
Rydall Vale Crescent
La
Lucia Ridge
Counsel
for the respondent: Mr S. M. Alberts
Instructed
by: Rakesh Maharaj and Company
87
Mahatma Ghandi Street
KwaDukuza
Date
of Hearing:
14 March 2023
Date
of Judgment :
12 April 2023
[1]
Lutchman
v Perumal
1950
(2) SA 178
(N).
[2]
Divine Inspiration Trading 350 (Proprietary) Limited has played no
part in this application whatsoever.
[3]
The
two deeds of suretyships sued upon each contained similar provisions
concerning legal costs.
[4]
Amedee
v Fidele and others
[2021]
ZAGPJHC 837 para 79.
[5]
I
mpala
Platinum Ltd v Monageng Mothiba N.O. and Oth
ers
[2016] ZALCJHB 475
.
[6]
I
mpala
Platinum Ltd v Monageng Mothiba N.O. and Oth
ers
[2016] ZALCJHB 475
.
[7]
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd
1984
(3) SA 623 (A).
[8]
Absa
Bank Ltd v Davidson
2000 (1) SA 1117 (SCA).
[9]
Ibid
p
ara
19.
[10]
Bock
and others v Duburoro Investments (Pty) Ltd
2004 (2) SA 242
(SCA);
[2003] 4 All SA 103
(SCA) para 29.
[11]
A notarial bond is a bond attested to by a notary public,
hypothecating all the movable assets or a specific asset of the
debtor,
and is registered in the Deeds Office by the registrar of
deeds in a manner similar to mortgage bonds.
[12]
AL
v The Central Authority for the Republic of South Africa and another
[2018]
ZAGPJHC 12 para 12.
[13]
Gentiruco
AG v Firestone SA (Pty) Ltd
1972 (1) SA 589
(A);
Standard
Bank v Estate Van Rhyn
1925
AD 266
at
268.
[14]
Capitec
Bank Holdings Ltd and another v Coral Lagoon Investments 194
(Pty) Ltd and others
[2021] ZASCA 99
;
2022 (1) SA 100
(SCA);
[2021]
3 All SA 647
(SCA)
paras 50-51.
[15]
R
v Katz
1959
(3) SA 408
(C) at 417D-H.
[16]
Ex
parte the Minister of Justice: In re Rex v Jacobson and Levy
1931
AD 466
at
478.
[17]
Senekal
v Trust Bank of Africa Ltd
1978
(3) SA 375
(A) at 382H–2383A.