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[2022] ZAMPMBHC 43
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Nedbank Limited v Lateral Support 102 CC and Others (193/2022) [2022] ZAMPMBHC 43 (20 June 2022)
THE
HIGH COURT OF SOUTH AFRICA
MPUMALANGA
DIVISION, MBOMBELA MAIN SEAT
CASE
NO: 193 / 2022
REPORTABLE:
NO
OF
INTEREST TO OTHER JUDGES: NO
REVISED.
20
June 2022
In
the matter between:
NEDBANK
LIMITED APPLICANT
And
LATERAL
SUPPORT 102 CC
FIRST RESPONDENT
DAVIES
NORMAN MCULU
SECOND RESPONDENT
SKOMBISO
JENNIFER MCULU
THIRD
RESPONDENT
JUDGMENT
RATSHIBVUMO
J:
Delivered:
This
judgment was handed down electronically by circulation to the
parties' representatives by email. The date and time for hand-down
is
deemed to be 10H00 on 20 June 2022.
[1]
This is an
application for summary judgment in terms of Rule 32. The application
is opposed by all three respondents (the Respondents).
The summary
judgment application is brought against the Respondents jointly and
severally and in
solidium
,
the one paying the other to be absolved for
(a)
payment of
R447 008.11,
(b)
interest on the
aforementioned amount at the rate of 17.5% (prime plus 10.5%) per
annum, compounded daily and capitalised monthly
from 08 October 2021
to the date of final payment, both days inclusive,
(c)
an order in terms of
Rule 46 declaring Erf 36, Wild Fig Country Estate, held by Deeds of
Transfer no. 2048/2012 (the property),
specially executable for the
above mentioned amount,
(d)
an order in terms of
Rule 46A determining that the property shall be sold in execution
without a reserve price, alternatively, with
a reserve price
determined by the court and
(e)
costs of suit on a
scale of between attorney and client.
[2]
At the hearing of
this application, prayers under (c) and (d) above were abandoned for
purposes of summary judgment application.
The Applicant requested
that these applications should be removed from the roll or be
postponed
sine
die
. This
according to the Applicant, was necessitated by the provisions of
Rule 46A which requires various inquiries to be conducted
before the
order requested could be granted, which cannot be practically held
and dealt with alongside this application.
[3]
According to the
particulars of claim, a banking facility was extended to the First
Respondent (the principal debtor) with the Second
and the Third
Respondents binding themselves jointly and severally as surety and
co-principal debtors in
solidium
for the repayment on
demand of all the amounts the principal debtor may owe the Applicant.
The facility was for an overdraft extended
and agreed to on various
dates. As of 01 July 2020, the overdraft was R550 000.00 with
the initial interest rate of 5% above
the prime lending rate
applicable from time to time. Further clauses in the facility
agreement included a penalty interest to be
charged in case the
overdraft was exceeded. As a security for the debt, a covering
mortgage bond was also registered by the Second
and the Third
Respondents over the immovable property referred to above.
[4]
The Applicant (the
Plaintiff in the main action) issued summons against the Respondents
(the Defendants in the main action) after
a breach of agreement in
that the First Respondent defaulted in the monthly instalment
repayments. As of 07 October 2021, the certificate
of balance
reflected R447 008.11 as the balance owing, together with
interest at 17.5% (prime plus 10.5%) per annum, compounded
daily and
capitalised monthly from 08 October 2021, to date of final payment.
The amount owing as per certificate of balance had
increased to
R471 535.08 on 30 March 2022.
[5]
In a plea filed by
the Respondents, they dispute that they refused to pay, saying they
offered R280 000.00 as a settlement,
which offer was rejected by
the Applicant’s attorneys. They further dispute the calculation
of the interest rate as not being
in line with the agreement. In an
affidavit filed in opposition to the current application, the
Respondents raised concern over
summary judgment in an application
premised on Rule 46A suggesting that such application was bound to
fail as it would not be in
compliance with the requirements set out
in the rule. The rest of the submissions do not take the matter any
further than what
is in the plea already. Arguments over Rule 46A are
now academic as that application has since been abandoned for
purposes of summary
judgment application.
[6]
Although the
Respondents allege that the date and place of signature in the
agreement were inserted by the Applicant’s representatives
and
that the Second Respondent did not sign it at Hazyview as alleged; I
take note of the fact that the agreement as a whole is
not disputed.
The contents thereof as well as the indebtedness are admitted. The
Respondents also question the liquidity of the
claim based on the
fact that the interest had to be calculated in order to come up with
the amount owing. As demonstrated below,
this is a non-issue given
the clauses in the agreement providing for the liquidity of the debt.
The only dispute that the Respondents
raise is the calculation of the
interests which they allege to be excessive and not in accordance
with the agreement. The court
also has to consider if this dispute
amounts to
bona
fide
defence.
[7]
Before
unpacking this defence, it is apposite to look at the principles
involved in the application for summary judgment. This court
was
referred by counsel for the Applicant to a judgment of
Tumileng
Trading CC v National Security and Fire (Pty) Ltd; E and D Security
Systems CC v National Security and Fire (Pty) Ltd
[1]
where
Binns-Ward J said the following,
“
[13]
However, our procedure, by contrast, even in its amended form,
remains true to that in which summary judgment was originally
introduced in the English civil procedure in the mid-19
th
century.
[2]
Rule
32(3), which regulates what is required from a defendant in its
opposing affidavit, has been left substantively unamended in
the
overhauled procedure. That means that the test remains what it
always was: has the defendant disclosed a
bona
fide
(i.e.
an apparently genuinely advanced, as distinct from sham) defence?
There is no indication in the amended rule that the
method of
determining that has changed. The classical formulations in
Maharaj
(Maharaj v Barclays National Bank Ltd
1976
(1) SA 418
(A)
at
765D-F
)
and
Breitenbach
v Fiat SA (
1976
(2) SA 226
(T), at 228B-H ) as to what is expected of a
defendant seeking to successfully oppose an application for summary
judgment
therefore remain of application. A defendant is not
required to show that its defence is likely to prevail. If a
defendant
can show that it has a legally cognisable defence on the
face of it, and that the defence is genuine or
bona
fide
,
summary judgment must be refused. The defendant’s
prospects of success are irrelevant.
[23]
It seems to me, however, that the exercise is likely to be futile in
all cases other than those in which the pleaded defence
is a bald
denial. This is because a court seized of a summary judgment
application is not charged with determining the substantive
merit of
a defence, nor with determining its prospects of success. It is
concerned only with an assessment of whether the
pleaded defence is
genuinely advanced, as opposed to a sham put up for purposes of
obtaining delay. A court engaged in that
exercise is not going
to be willing to become involved in determining disputes of fact on
the merits of the principal case.
As the current applications
illustrate, the exercise is likely therefore to conduce to
argumentative affidavits, setting forth
as averments assertions that
could more appropriately be addressed as submissions by counsel from
the bar. In other words,
it is likely to lead to unnecessarily
lengthy supporting affidavits, dealing more with matters for argument
than matters of fact.
[8]
I align my reasoning
with the views expressed above. The court is not concerned with
whether the defence raised is good enough to
be successful in a
trial. The question should rather be whether it is a genuine defence,
that presuming it to be true, the question
is whether it raise
triable issues? Is the pleaded defence genuinely advanced or it is a
sham raised merely to delay the proceedings?
[9]
There is no doubt
that the interest charged
in
casu
could
be seen as exorbitant. But the question should rather be whether this
is what the Respondents bound themselves to. Clause
5 of the
agreement, dealing with the interest to be charged reads as follows.
“
5.
INTEREST.
All
interests rate applicable will be linked to Nedbank’s publicly
quoted prime lending rate (the prime rate).
The maximum penalty
interest rate is equal to the ruling South African Reserve Bank
repurchase rate (the repo rate) + 14%.
The default interest rate
applicable will be determined by Nedbank and will not exceed the
maximum rate prescribed from time to
time for credit facilities in
the regulations promulgated in terms of the
National Credit Act, 34
of 2005
.
5.1
In respect of any overdraft facilities.
5.1.1
Overdraft facility interest rate.
The
initial interest rate applicable to the overdraft facility will be
equivalent to 5% above (+) the prime rate determined from
time to
time and charged by Nedbank (the overdraft rate)
5.1.2
Penalty Interest.
If
the overdraft is exceeded, Nedbank will, in addition to any other
right it may have in law, be entitled to charge penalty interest
on
the amount with which the Borrower has exceeded the overdraft
facility
.
5.1.3
Default interest…” [My emphasis].
[10]
Under standard terms
and conditions, the following appears under clause 8.
“
Certification
of Debt.
The
nature and amount of the Borrower’s obligations and the
applicable interest rate will be determined and proved by a
certificate
or any other written evidence (Certificate) purporting to
have been signed by a Nedbank Manager whose capacity or authority
does
not have to be proved. Unless the contrary is proved,
the
Certificate will on the production thereof be binding and be prima
facie proof of the content thereof and the fact that the
amount is
due and payable
.
The Certificate will be valid as a liquid
document
(alternatively proof of a liquidated amount) in any
competent court or for any other purpose. [My emphasis].
[11]
Counsel for the
Applicant demonstrated it well that the interest charged is in line
with the agreement even though it could be high.
Moreover, the
Applicant did not even have to prove the calculations in the first
place, but merely produce a certificate of balance,
which shall be
sufficient proof for the debt and proof for liquid claim. The
Respondents failed to establish how applying the agreed
interest rate
would bring the amount owing lower nor why the Certificate of balance
should be rejected. Instead, the Respondents
suggested that the
Applicant negotiated in bad faith when they rejected the offer they
made. I do not see how negotiation in bad
faith, even if it was
proved, would constitute a defence, let alone a
bona
fide
one.
I however reject the notion suggesting that refusing a lower amount
in settlement of a debt can be interpreted as negotiation
in bad
faith.
[12]
It is therefore clear
from the above that the Respondents have dismally failed to
demonstrate that they have a
bona
fide
defence
to the claim by the Applicant. This is a case that stands or falls on
the four corners of an agreement. Any defence raised
will only serve
to delay the outcome in this matter which is inevitable.
[13]
For the reasons
stipulated above, I make the following order.
[13.1]
Summary judgment is granted against the Respondents, jointly and
severally, the one paying the other to be absolved for payment
of
R447 008.11 plus interest at the rate of 17.5% per annum,
calculated from 08 October 2021 to the date of final payment.
[13.2]
The Applicant is awarded costs on attorney and client scale.
[13.3]
Applications in terms of
Rule 46
and
46A
(see para (c) and (d) in
paragraph 1 of this judgment) are postponed
sine die
.
TV
RATSHIBVUMO
JUDGE
OF THE HIGH COURT
FOR
THE APPLICANT
ADV. J VAN DEN BERGH
INSTRUCTED
BY
STEGMANNS
INC ATTORNEYS
NELSPRUIT
FOR
THE RESPONDENT
ADV. V MABUZA
INSTRUCTED
BY CULU
INC ATTORNEYS
MBOMBELA
DATE
HEARD
23
MAY 2022
JUDGMENT
DELIVERED
20
JUNE 2022
[1]
(3670/2019)
[2020] ZAWCHC 28; 2020 (6) SA 624 (WCC) (30 April 2020)
at
para 13 & 23.
[2]
See
Edwards
v Menezes
1973
(1) SA 299
(NC);
[1973] 1 All SA 515
(NC), at 304 (SALR),
Joob
Joob
Investments
supra,
at paras. 29-31 and
JA
Faris,
The
historical context of summary judgment in South Africa: politics,
policy and procedure
,
(2010) LXIII CILSA 352 for a historical overview of the history of
the summary judgment procedure in this country.