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2021
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[2021] ZANCHC 63
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Koegelenberg N.O. and Others v Praia Rocha 122 Investments (Pty) Ltd (152/2019) [2021] ZANCHC 63 (26 November 2021)
IN
THE HIGH COURT OF SOUTH AFRICA
(NORTHERN
CAPE DIVISION, KIMBERLEY)
CASE
NO: 152/2019
In
the matter between:
GIDEON
JAKOBUS KOEGELENBERG N.O.
First Applicant
In
his capacity as Trustee for the time-being
of
the Anmilan Trust
ZANET
ANNALISE KOEGELENBERG N.O.
Second Applicant
In
his capacity as Trustee for the time-being
of
the Anmilan Trust
PETRUS
VAN ZYL
N.O.
Third Applicant
In
his capacity as Trustee for the time-being
of
the Anmilan Trust
and
PRAIA
ROCHA 122 INVESTMENTS (PTY) LTD
Respondent
Registration
No: 2007/008499/07
Delivered:
This judgment was handed down electronically by circulation to the
parties’ legal representatives by email. The
date and time for
hand-down are deemed to be 09h30 on 26 November 2021.
JUDGMENT
O’BRIEN
AJ,
1.
On 18 September 2014, the respondent bought
from the applicants (“the Anmilan trust”) under a written
agreement specific
immovable property for R18 000 000.00
(Eighteen Million Rand) plus VAT. The immovable property comprises
five plots (“the
properties”) in the Vaalharts Settlement
Scheme in the District of Barkley West in the Northern Cape.
2.
The purchase price was payable in cash of
R9 000 000.00 to be paid on the date of transfer. The
purchase price balance
was the issuing of preferential shares in the
respondent to the trust, alternatively to the trustees.
3.
On 29 April 2015, the property was
registered in the respondent's name.
4.
The respondent failed to issue the
preferential shares as the purchase price balance price on the date
of registration and transfer
of the property in its name.
5.
Instead, a second mortgage bond in favour
of the applicants in the sum of R9 000 000.00 was passed
over the property.
It was a condition of the mortgage bond that the
R9 000 000.00, plus interest, were payable to the
applicants on 30 March
2015 at the prime lending rate of Absa Bank.
Furthermore, the respondent would pay an annual capital amount of R1
500 000.00
plus interest on or before 28 February 2026.
6.
The first and second applicants had a
usufruct over one property.
7.
There were disputes between the parties
regarding the balance of the purchase price, working capital, the
usufruct, and the purchasing
of farming equipment.
8.
The parties then reached a settlement
agreement. According to the terms of this agreement, the respondent
will pay R9 521 891.33
plus interest on the reduced capital
amount from 30 September 2015. The deed of settlement was conditional
on a further loan to
be approved by Suid-Wes Landbou (the primary
bondholder) payable by 31 January 2018 to the trust. Another clause
of the settlement
agreement was that should the respondent fail to
pay the purchase price balance over ten years in equal monthly
instalments to
the trust, the parties agreed that their respective
bookkeepers would issue a certificate of indebtedness. Alternatively,
in the
event of the respondent’s default, the properties would
be auctioned by 31 March 2018.
9.
If there were a material breach of the
settlement agreement, the defaulting party would have fourteen days
to remedy the defect,
failing which, the applicants may cancel the
agreement and claim damages plus interest. Alternatively, the total
purchase price
plus interest will become due and payable.
10.
As it turned out, Suid-Wes Landbou gave
notice on 12 April 2018 that the application for the loan was
unsuccessful.
11.
The trust then filed papers to liquidate
the respondent. The respondent contested this application on the
premise that the amount
owing was not due and payable.
12.
The parties later agreed that the
respondent’s liability to the trust would be restructured to
carry on with its business
and remain solvent.
13.
Regarding restructuring the respondent’s
liability, the parties had agreed that the respondent was indebted to
the applicants
for R12 235 220.60. That amount would be
payable by the respondent as follows:
13.1
R4 250 000.00 on or before 15 December
2018;
13.2
R750 000.00 on or before 31 December
2019;
13.3
R1 000 000.00 on or before 31
December 2020;
13.4
R1 250 000.00 on or before 31
December 2021;
13.5
R1 500 000.00 on or before 31
December 2022;
13.6
R1 750 000.00 on or before 31
December 2023;
13.7
R2 000 000.00 on or before 31
December 2024;
13.8
The interest balance would be determined
jointly by the parties’ auditors and endorsed before 31 May
2025 and payable on 30
June 2025.
14.
The above payments resulted in the
amendment of the mortgage bond held by the applicants over the
properties on various conditions,
which is presently unnecessary to
elaborate on.
15.
The respondent neglected to pay the amount
of R4 250 000.00 on the due date. That meant that,
according to the settlement
agreement terms the whole amount became
due and payable without warning to the respondent. The applicants
would be entitled to
issue a summons and auction the properties to be
specially executable. On two occasions after that (24 December 2018
and 16 January
2019), the applicants’ attorney informed the
respondent that payment was due and payable with no reply. The
applicants’
attorney warned that the default of payment
triggered the acceleration clause, forcing the entire sum of
R12 235 220.60
due and payable.
16.
On 25 January 2019, the applicants issued
summons claiming payment of R12 235 220.60, interest on the
aforesaid amount
calculated at the prime rate of Absa Bank Ltd from
24 December 2018, an order declaring the immovable properties
executable.
17.
On 12 February 2019, the respondent entered
a notice of intention to defend.
18.
On 14 February 2019, the applicants applied
for summary judgment. This application was enrolled for a hearing on
8 March 2019.
19.
On 8 March 2019, the parties concluded a
second settlement agreement which was made an order of the court. The
court order reads
that the application for summary judgment was
postponed
sine die
,
and the second agreement formed part of the court order.
20.
On 28 February 2019, the respondent had
made a payment of R4 250 000.00. The parties agreed that
the balance then, due
to the applicants, was R7 985 220.60
plus interest.
21.
Regarding clause 3.2 of the second
agreement, the parties agreed that the application for summary
judgment against the respondent
would be postponed
sine
die
. That the second agreement is made
an order of the court, and the applicants withdraw their application
to liquidate the respondent.
22.
Regarding restructuring the respondent’s
indebtedness, the parties had agreed in the second agreement that the
respondent
was indebted to the applicants in the amount of
R12 235 220.60. That amount would be payable by the
respondent as follows:
22.1
R4 250 000.00 on or before 15 December
2018;
22.2
R750 000.00 on or before 31 December
2019;
22.3
R1 000 000.00 on or before 31
December 2020;
22.4
R1 250 000.00 on or before 31
December 2021;
22.5
R1 500 000.00 on or before 31
December 2022;
22.6
R1 750 000.00 on or before 31
December 2023;
22.7
R2 000 000.00 on or before 31
December 2024;
22.8
The balance of the interest would be
determined jointly by the parties’ auditors and certified
before 31 May 2025 on 30 June
2025.
23.
As per the second agreement, the respondent
failed to comply with the payment arrangements by failing to make a
payment of R1 000 000.00
by 28 February 2021. The
respondent made payments of R150 000.00 and on 1 March 2021, a
sum of R50 000.00.
24.
The applicants’ attorney advised the
respondent on 12 April 2021 that payment of R800 000.00 is due
and payable before
the close of business on 26 April 2021, failing
which the application for summary judgment would be enrolled. The
amount owing
and payable was R9 026 649.89.
25.
The respondent made further payments
totalling R340 000.00, leaving a shortfall of R510 000.00
on the R1 000 000.00,
which was overdue and payable.
26.
It was a specific condition of the second
agreement that should the respondent be in default, the entire amount
thus due with interest
would immediately become due, payable, and
claimable, and the applicants will be entitled to re-enrol the
application for summary
judgment on 21 court days’ notice and
ask for judgment for the amount due and payable and interest and have
the properties
declared specifically executable.
27.
When the application for summary judgment
was re-enrolled, the applicants filed a revised notice demanding
payment of R8 736 649.98.
These payments were recorded in a
supplementary affidavit filed on 7 May 2021. The notice of
re-enrolment of the summary judgment
application was served on the
respondent’s attorneys on 14 May 2021. Only then the respondent
made a payment of R510 000.00,
which was due and owing on 28
February 2021. A capital amount of R7 963 649.98 plus
interest became due and payable.
28.
Through its sole director (“Murdoch”),
the respondent filed an opposing affidavit in the application for
summary judgment.
He complains that the applicants filed an amended
summary judgment application, based on the respondent’s
supposed non-compliance
with the terms of the second settlement
agreement. It creates a new summary judgment application. In that
case, the new Rule 32,
which came into effect on 1 July 2019, should
have been pursued by the applicants. Therefore the application was
prematurely brought,
which a defendant in an action could only move
entering after a plea.
29.
He maintains that the applicants’
plea for leave to enter a supplementary affidavit is not competent
under Rule 32(1).
30.
Regarding his defence, Murdoch states:
“
Due
to various factors beyond the control of the Respondent however, the
Respondent was simply not in a financial position to make
good on the
above agreement.
”
31.
He further states:
“
34.
The Respondent, at the time being a producer primarily of lucerne,
experienced severe financial difficulties during
2020/2021 primarily
by virtue of the fact:
34.1 That the
markets, as a result of the COVID-19 pandemic, were either closed at
various stages or did not function properly
resulting therein that
the Respondent’s lucerne crop did not yield the profits that it
was expected to do; and
34.2 That by
virtue of the abundance of rains experienced during 2020, the
Respondent’s lucerne crops specifically suffered
as a result
and also did not yield the profits that it was expected to do.
35.
I therefore, respectfully submit that the Respondent’s failure
to make the required payment in time,
was not due to any mala fides
on the part of the Respondent, but was due to circumstances beyond
its control.
”
32.
Rule 32(1) authorizes a plaintiff to apply
to a court for a summary judgment on a liquid document after the
defendant has delivered
a plea. The rule originally applied where the
defendant had delivered a notice of intention to defend the
plaintiff’s claim.
On 1 July 2019, the rule was amended,
allowing a plaintiff only to apply for summary judgment after the
defendant has delivered
a plea.
33.
In
Joob
Investments (Pty) Ltd v Stocks Mavundla Zek Joint Venture
[1]
the court declared:
“
The
rationale for summary judgment proceedings is impeccable. The
procedure is not intended to deprive a defendant with a tribal
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
tribal issue is not shut out. In the Maharaj
case at 425 G –
426 E, 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 upon 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 his 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 425 G – 426 E.
”
34.
It is undisputed that the applicants base
their claim in the summons on a liquid document. Also, the cause of
action, the amount
claimed, and the facts on which the plaintiff’s
claim is based.
35.
Mr
Olivier, acting for the respondent, correctly conceded that the
defence regarding the respondent’s rights to housing does
not
apply to the respondent.
[2]
The
respondent is a juristic legal entity and therefore cannot rely on
s26 of the Republic of South Africa Constitution, Act 108
of 1996.
36.
Mr. Olivier further submitted with force
that the summary judgment application is a new application under the
guise of an amended
summary judgment application. The question is
this: Is the application a new application, or is it an extension of
the previous
application. If the court finds that it is a new
application, it is dispositive of the matter because such an
application can only
be filed after a defendant has entered a plea.
37.
I am afraid I have to disagree with Mr.
Olivier. The amended application is not a new application for summary
judgment in the true
sense of the word. I am aware that in summary
judgment proceedings, a plaintiff is not allowed to file more than
one affidavit.
However, as the supplementary affidavit shows, the
time has overtaken the application. The summary judgment application
was on
the roll on 8 March 2019. Two days before that application,
the parties agreed to postpone the summary judgment application and
reach settlement, which was made an order of the court. After that,
the respondent made certain payments. These payments were late
or not
the total amount. There was also the question of interest. As I see
it, they filed the supplementary affidavit to show the
subsequent
payments the respondent made, which reduced the amount that was due
and payable to R8 736 649.98 on 7 May 2021. The
supplementary
affidavit is ancillary to the first affidavit and does not constitute
an affidavit for a new cause of action.
38.
But there is another reason the
respondent’s submission cannot be accepted. The court order of
8 March 2019 states that the
summary judgment application is
postponed
sine die
.
That was done before 1 July 2019, so the further conduct of that
application does not fall under the new regime. The second agreement,
which was made an order of court stipulates at paragraph 3.2.5 states
that if the respondent should make no payment which is due
and
payable in terms of the deed of settlement or is in default of any
condition or stipulation and in terms of which the applicants
have
given 14 days’ notice to remedy the breach, the full amount
together with interest shall become due and payable within
20 days
after receipt of a notice. It reads further:
“
To
place the application for summary judgment on the roll and to apply
for judgment of the specified amount and interest due and
to declare
the properties executable (my translation from the Afrikaans
version).
”
39.
If the parties intended to bring a new
application, they would have put that in the deed of settlement. It
bears mention that attorneys
represented the parties, and they had
time to read the deed of settlement and consider it advisedly.
Therefore, I find that the
supplementary affidavit does not
constitute a new summary judgment application. The supplementary
affidavit shows the further payments
the respondent made. To refuse
summary judgment would cause piecemeal litigation, which the courts
have frequently countenanced.
40.
Given this conclusion, it is unnecessary to
decide whether the new Rule 32 (1) applies. In any event, there is a
presumption against
retrospectivity unless the statute or rule
expressly or impliedly determines the contrary. The prospective
nature of the new rule
was confirmed in
Raumix
Aggregates (Pty) Ltd v Richter Sand CC and Another and related
matters
2020 (1) SA 623
(GJ), with
which I am in respectful agreement.
41.
Mr. Olivier submitted that the court has
the discretion to grant summary judgment given the serious
consequences of the remedy.
He argued that the respondent was not in
arrears having made payment. However, he is mistaken for the
respondent cannot decide
when to make a payment and what that amount
would be. The breach triggers the application for summary judgment.
Whatever label
one attaches to a summary judgment application, the
purpose of such an application is to allow a plaintiff a speedy
remedy in the
absence of a good defence by a defendant.
42.
Murdoch, in his affidavit, states that the
respondent could not make good on the second settlement agreement
because it was not
in a financial position. Being a producer
primarily of lucerne, the respondent experienced severe financial
difficulties because
of the COVID-19 pandemic, resulting in the
lucerne crop not yielding profits. The abundance of rain caused the
respondent’s
lucerne crops to suffer.
43.
I accept that a respondent in an
application for summary judgment need not be as detailed as required
in a plea. However, I would
have expected the respondent to state why
it was not in a financial position beyond simply stating that it was
because of various
factors. I am well aware that the COVID-19
pandemic caused severe economic problems for business entities;
however, in the true
sense of the word, that defence is not a legal
defence that would trump an application for summary judgment. Apart
from referring
to the abundance of rains, Murdoch does not explain
sufficiently why that caused the respondent’s financial
difficulties.
To sum up, the respondent is vague and lacks detail
which would thwart an application for summary judgment. Regarding the
conduct
of non-payment or late payment and the other documents at my
disposal the continued restructuring of payment, it is self-evident
that the respondent has no bona fide defence.
44.
An issue not raised by the parties is
whether this court has the power to declare the properties specially
executable In
First Rand Bank Ltd v
Lenea
2008 (3) SA 491
(E) Leach J (as
he then was) found that a declaration that property is specially
executable is ancillary to an application for
default summary
judgment. I respectfully agree with the reasoning.
45.
There is, therefore, no merit in the
so-called technical defences, as Mr. Olivier puts it. I make the
following order:
45.1
Summary judgment in the amount of
R7 620 223.00 is granted;
45.2
Interest calculated at the prime rate of
Absa Ltd from date of demand;
45.3
The following properties are declared
executable:
45.3.1
Plot 55, a portion of Plot 1, Vaalharts
Nedersetting B, District Barkley West, Northern Cape Province;
45.3.2
Remaining extent of Plot 494, Vaalharts
Nedersetting B, District Barkley West, Northern Cape Province;
45.3.3
Plot 56, a portion of Plot 5, Vaalharts
Nedersetting B, District Barkley West, Northern Cape Province; and
45.3.3.1
Plot 495, a portion of Plot 1, Vaalharts
Nedersetting B, District Barkley West, Northern Cape Province.
45.4
The respondent pays the costs of the
application, inclusive of all the wasted costs incurred during the
postponements.
S
C O’BRIEN
ACTING
JUDGE
Applicants’
counsel
PR
CRONJE
Applicants’
attorney
MR
A HORWITZ
Respondent’s
counsel
ADV
A D OLIVIER
Respondent’s
attorney
B
J LIEBENBERG & ASSOCIATES INC
[1]
2009(5)
SA 1 (SCA) at 11 G – 12 D
[2]
Absa
Bank Ltd v Mokebe; Absa Bank Ltd v Kobe; Absa Bank Ltd v Vokwani;
Standard Bank of South Africa Ltd v Colombick & Another
2018(6)
SA 492 (GJ) at para 59 the court stated the following: “
We
cannot stress enough that this matter concerns and applies only to
those properties which are primary homes of debtors who
are
individual consumers and natural persons.
”