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[2019] ZAGPPHC 228
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Standard Bank of South Africa Ltd v Travelcol (Pty) Limited and Others (24934/2018) [2019] ZAGPPHC 228 (29 May 2019)
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REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH
AFRICA
GAUTENG DIVISION, PRETORIA
(1)
REPORTABLE:
YES
(2)
OF
INTEREST TO OTHER JUDGES: YES
(3)
REVISED
CASE.NO: 24934/2018
29/5/2019
In
the matter of:
THE
STANDARD BANK OF SOUTH AFRICA LIMITED
Plaintiff
and
TRAVELCOL
(PTY) LIMITED
(Registration
Number:
2009/009850/07)
First Defendant
PAVLOS
KYRIACOU
(Identity
Number:
[….])
Second Defendant
THUMOS PROPERTIES (PTY) LIMITED
(Registration
Number: 2007/010860/07)
Third Defendant
JUDGMENT
Bam
AJ
1.
This
is an application for summary judgement, in terms of Uniform rule 32,
a sequel to a summons issued by the Plaintiff on 16 April
2018. For
convenience, I refer to the parties as they are in the summons.
Background
2.
The
Plaintiff sought to recover from the defendants, jointly and
severally, the one paying the other to be absolved, various amounts
arising out of two lines of credit extended to the first defendant,
interest and costs. The costs sought as against first and third
defendants is on a scale as between attorney and own client and,
against second defendant, party and party.
3.
In
the first instance, Plaintiff sought to recover an amount of R1 555
667.07 plus interest, labelled Claim A in the particulars
of claim,
which derives from an 'Overdraft Facility' and governed by the terms
and conditions of the Overdraft Facility Agreement.
In the second
instance, an amount of R3 048 970.39 plus interest, labelled Claim B,
which stems from a Medium Term Loan and governed
by the terms of the
Medium Term Loan Agreement. In respect of both claims, the interest
sought to be recovered is fully set out
and pleaded accordingly in
the particulars of claim
[1]
.
4.
As
regards second and third defendants, plaintiff's claim rests on
individual suretyship agreements, both of which have not been
denied,
in terms of which second and third defendants individually, together
with first defendant bound themselves as surety and
co-principal
debtor for the payment, when due, of all present and future debts of
any kind of the first defendant to the plaintiff.
I record for
completeness that the plaintiff holds as continuing security for the
obligations of the third defendant a mortgage
bond, which is fully
described in the plaintiff's particulars of claim
[2]
.
5.
The
Overdraft Facility, Medium Term Loan, the Suretyship Agreements and
bond are all annexed to the Plaintiff's particulars of claim.
6.
As
regards all three defendants, it is a term of the individual
agreements that a certificate signed by any of the plaintiff's
managers, whose appointment need not be proved, will on its mere
production be sufficient proof of any amount due and/ or owing
by the
first, second or third defendant in terms of the relevant agreement,
unless the contrary is proven. The relevant certificates
are annexed
to the particulars of claim in respect of each claim made and marked
accordingly.
7.
Following
the summons, all three defendants filed notices of intention to
defend during April 2018 to which plaintiff responded
by lodging the
present application for summary judgement. The application was
previously set down for hearing during 2018 but for
reasons not
immediately apparent from the file, the hearing did not proceed. The
application was again set down for hearing on
2 May 2019. The
Defendants are opposing.
Claim A: Overdraft Facility
8.
In
view of the defences adumbrated in the defendants' opposing
affidavit, a little more needs to be said about each of the
agreements
on which plaintiff's claim is based. On 10 October 2016,
at Pretoria, first defendant, represented by its authorized
representative,
accepted in writing the terms and conditions of the
Overdraft Facility Agreement, marked annexure B. The plaintiff was
represented
by its employee, namely, Chris Coetzee (Coetzee). In
terms of this agreement, Plaintiff extended an overdraft facility of
R1 500
000 and from which first defendant began drawing. The relevant
material terms of the overdraft facility state:
1.
Clause
3.2.2.3.1 Interest: The rate of interest on the Limit will be charged
at Prime plus, 8.35% per annum.
2.
Clause
3.2.2.7 Income and Expenditure: The major portion of your income and
expenditure must pass through your Current Account.
3.
Clause
3.2.2.8: The Overdraft facilities are granted to you at our sole
discretion. If there is a Material Deterioration in your
financial
position we may immediately suspend or withdraw, without notice to
you all or part of the Limit, or Reduced Limit (if
applicable), and
all amounts owing will immediately become due and payable to us.
Material Deterioration is described in the Terms
and conditions of
the overdraft facilities as: 'material deterioration in our
reasonable opinion'. (clause 1.14
[3]
)
. Clause 10 defines Default to include Material Deterioration.
Claim 8: Medium Term Loan
9.
On
23 March 2015 plaintiff and first defendant concluded a written loan
agreement (the Medium Term Loan Agreement) in terms of which
plaintiff loaned R7 400 000 to the first defendant. Coetzee
represented the plaintiff while first defendant was represented by
its authorized representative. The relevant material terms of this
agreement can be briefly stated as:
i.
Clause
4.1: The variable interest rate is linked to Prime interest rate by a
margin of 4.25% above the prime rate and is therefore
subject to
change
[4]
.
ii.
Clause
14.8: You may not without our prior written consent, which will not
be unreasonably withheld:
-
cease carrying on business;
and/or
-
sell or otherwise dispose of or
attempt to sell or dispose of any of your assets, except in the
ordinary course of your business.
Facts giving rise to the present
litigation
Overdraft
facility
10.
Plaintiff
was of the reasonable opinion that the first defendant's financial
position had materially deteriorated as, during or
about December
2016, first defendant sold its business, the Spar retail business,
and ceased to carry on business as such. The
plaintiff was further of
the view that first defendant had changed the nature of its business
without plaintiff's prior written
consent. I shall not concern myself
with this second ground relied upon by the plaintiff as it is not
relevant for the purposes
of the overdraft claim. Consequent to the
material deterioration, plaintiff suspended the overdraft facility
and issued notices
[5]
calling upon first defendant to pay the full amount outstanding
within a period of ten (10) business days.
Medium
Term Loan
11.
Arising
from the sale of the Spar retail business and the first defendant's
ceasing to carry on business or its change of the nature
of its
business, without first seeking plaintiff's written consent,
plaintiff concluded that the first defendant had breached the
material terms of the Medium Term Loan Agreement. Plaintiff issued a
notice calling upon first defendant to pay the outstanding
balance
within a period of 10 business days..
12.
Further
notices were issued to the second and third defendants seeking
satisfaction of the debt. No payment was made leading to
summons and
the present application.
13.
The
following are common cause:
a.
First
defendant is bound by the terms of both overdraft facility and the
medium term loan agreements;
b.
First
defendant is indebted to the Plaintiff in respect of the overdraft
facility and medium term loan;
c.
First
defendant sold its Spar retail business (Spar) in December 2016 and
ceased carrying on business as such, a mere three months
after
signing the overdraft facility agreement;
d.
First
defendant's business account, from which the overdraft was accessed,
had not been operated for months after the sale of Spar
business; and
e.
second and third defendants are bound by
the terms of the individual suretyship agreements. For convenience, I
use defendants when
referring to first defendant and where necessary
I specify which defendant.
Affidavit Resisting Summary
Judgement
14.
In
its affidavit resisting summary judgement, first defendant raised the
following defences:
i.
Point
in limine:
The
deponent to the plaintiff’s affidavit lacks personal knowledge
of the facts.
ii.
Overcharge
on fees: In respect of the Overdraft Claim, first defendant avers
that it had been overcharged in respect of cash deposit
fees.
iii.
Overcharge
on interest: As regard the Medium Term Loan, first defendant claims
it had obtained an oral undertaking from Coetzee
to reduce the
interest rate charged on this loan.
iv.
No
breach: First defendant denies that there has been material
deterioration in its financial position and consequently, the breach.
It claims that it has some assets from which it generates business.
Lastly, first defendant claims that it has never defaulted
on any of
its obligations with the plaintiff in respect of either agreement.
v.
Knowledge
on the part of the plaintiff and
'implied
written consent';
and
vi.
Estoppel
Point
in limine
15.
The
first defendant submits that the deponent is not a person who could
swear positively to the facts as envisaged in Rule 32 (2)
of the
rules. They submit that at all material times they dealt with Chris
Coetzee and due to the peculiar nature of this case,
Coetzee would
have been the correct person to depose to the affidavit. They further
add that the deponent, Ms Govender, has no
personal knowledge
'
of the conversations, agreements and imparting of information by the
Defendants,.......'
Purely on this
ground alone, defendants submit that the summary judgement
application must be dismissed with costs.
16.
It
appeared during counsel's address that this was the high water mark
of the first defendant's case. In all circumstances, it would
be
incorrect then to deal with it tangentially. As a start, the
Plaintiff's application is supported by Ms Kasiri Govender,
(Govender)
and it reads:
'3. By virtue of my position as a
Manager of the Plaintiff I have access to and under my control all
the Plaintiff's records, accounts
and other documents relevant to the
claim forming the subject matter of the action instituted against the
Defendants under the
above case number. 4. In the ordinary course of
my duties as Manager of the Plaintiff and having regard to the
Plaintiff's records,
accounts and other relevant documents in my
possession, and to which I have access to, I acquired direct
knowledge of the Defendants'
financial standing with the Plaintiff
and I can swear positively to the facts and alleged and the amounts
claimed in the Plaintiff's
particulars of claim. 5. I hereby verify
that the Defendants are indebted to the Plaintiff in the amounts set
out in the Plaintiff's
particulars of claim together with the
interest thereon and costs as claimed on the grounds as set out in
the Plaintiff's particulars
of claim. 6. I refer to the averments in
the Plaintiff's particulars of claim and hereby verify and confirm
the correctness thereof
and the causes of action as well as the
amounts and relief claimed. 7. In my opinion the Defendants do not
have a bona fide defence
to the action and a notice of intention to
defend as been delivered solely for the purposes of delay.'
The applicable law
17.
In
Firstrand Bank Ltd v Trustees
for
the time being Huganel Trust
[6]
the court reasoned as follows:
'2. As Corbett JA emphasised in
Maharaj,
excessive formalism should be eschewed. Hence the
substance of the dispute together with the purpose of summary
judgment needs
to be taken into account during the evaluation of the
papers which have been placed before court in order to determine
whether
the summary form of relief should be justified.
3. While a measure of commercial
pragmatism needs to be taken into account, in that many of these
summary judgment applications
are brought by large corporations and,
accordingly, it may well be that first hand knowledge of every fact
cannot and should not
be required, each a case must be assessed on
the facts which were placed before the court. It follows therefore
that the nature
of the defence becomes the starting point. For
example, in
Maharaj's
case, Corbett JA found that it was a
borderline case but one which fell on the right side of the border in
so far as the plaintiff/applicant
was concerned. On an evaluation of
both the claim and the defence, it could be concluded with
justification that the deponent had
sufficient knowledge to depose to
the affidavit which formed the basis of the factual matrix to sustain
an application for summary
judgment.... .......'.
In
Gillian
Rees v Investec Bank
[7]
,
it was said:
'[10] In Barclays National Bank
Ltd v Love
[8]
(quoted with approval in Maharaj at 4248-0) the following is said:
'We are concerned here with an affidavit made by the manager
of the
very branch of the bank at which overdraft facilities were enjoyed by
the defendant. The nature of the deponent's office
in itself suggests
very strongly that he would in the ordinary course of his duties
acquire personal knowledge of the defendant's
financial standing with
the bank. This is not to suggest that he would have personal
knowledge of every withdrawal of money made
by the defendant or that
he personally would have made every entry in the bank's ledger or
statements of account; indeed, if that.
were the degree of personal
knowledge required it is difficult to conceive of circumstances in
which a bank could ever obtain summary
judgment'.
18.
I interpose that the
deponent's office in this case not only suggests strongly that she
would in the ordinary course of her duties
acquire personal knowledge
of the defendant's financial standing at the bank, she had been
copied in the letters sent by the plaintiffs
attorneys demanding the
outstanding amounts from the defendants. In his response on behalf of
all three defendants, second defendant
too copied her
[9]
.
She further prepared the certificates of balance annexed to the
plaintiffs particulars evidencing the amounts due by first, second
and third defendants to the plaintiff
[10]
.
19.
More recently, in Stamford Sales &
Distribution v Metraclark
[11]
'
where the court was concerned with a claim arising from a cession, it
noted:
'[11] The enquiry, which is
fact-based, considers the contents of the verifying affidavit
together with the other documents properly
before the court. The
object is to decide whether the positive affirmation of the facts
forming the basis for the cause of action,
by the deponent to the
verifying affidavit, is sufficiently reliable to justify the grant of
summary judgment. Those high court
decisions which have required
personal knowledge of all of the material facts on the part of the
deponent to the verifying affidavit
are accordingly not in accordance
with the principles laid down by this court in Maharaj."
Does Govender have personal
knowledge then?
20.
Applying the principles drawn from the
cases referred to in the preceding paragraphs and factoring in
Govender's position and role
with the plaintiff as articulated in the
affidavit, her active participation in preparing the certificates
leading up to litigation
and her being privy to the crucial
correspondence calling upon the defendants to pay, I am satisfied on
the basis of the documents
before court that Govender is well placed
to depose to the affidavit. Bearing in mind that the deponent need
not have been privy
to each and every conversation and interaction
between the plaintiff and the defendants, the defence raised by the
defendants that
she has no knowledge
'
of the conversations, agreements and imparting of information by the
Defendants .. .'
cannot be elevated
to a requirement. To do so would go counter to the principles
espoused in the decisions already mentioned, in
particular those of
the SCA, which this court, in any event, cannot do.
21.
Having cleared the point
in
limine,
it remains for this court to
consider the remainder of the defences. I do have to state upfront
that upon perusing the remainder
of the defences, it was difficult to
discern a sustainable and triable defence. The supporting documents
which consist of several
e-mails, agreements between the second
defendant and third parties, and the several excel spreadsheet pages
regrettably, did not
cure this problem for the defendants.
Claim
A: Overdraft Facility.
Overcharge in respect of cash deposit
fees
22.
The defendants deny the amount claimed
by the plaintiff in respect of the overdraft. They claim that the
plaintiff overcharged the
first defendant on cash deposit fees. To
this end, defendants provided a single page document marked TRA ONE,
being an excel spreadsheet
with six columns and TRA TWO, an email,
which I will come to shortly. In the excel page, the defendants list
deposits from 1 January
2013 to January 2015, they add a column for
fees charged, a further column for the 'Correct Fee' and finally, in
the last column,
they show what they claim is owed. At the bottom of
the spreadsheet, the defendants provide an amount of R358 535 as the
amount
owed which they seek to deduct from the amount claimed by the
plaintiff. TRA TWO is an e mail dated 22 January 2016 directed
to Coetzee by second defendant. He refers the court to line 5 which
reads,
' My cash deposit fees are
outstanding after 100s of mails'.
(emphasis
is mine). How this e-mail and the excel spreadsheet entitle first
defendant to a claim against the plaintiff is deliberately
not
explained and so is the basis for the alleged 'correct fee'. The
e-mail lists a number of items which second defendant raised
then
with Coetzee. Its opening line reads:
'Please
understand this mail, I don't have
a
problem with you personally, but I do
have a HUGE problem with the way I
am
being treated at standard bank.'
The
e-mail has no direct bearing to the matter at hand. It also predates
the overdraft agreement. While perusing this spreadsheet,
one
wondered, if the first defendant had a genuine claim against the
plaintiff, why would it wait for more than three years - if
one has
regard to the dates of the first and last deposits- or until
plaintiff issues a summons. Counsel for the plaintiff attacked
the
defence as vague and sketchy and further submitted that if there was
a claim, it would have prescribed before the plaintiff's
summons. It
follows that this is not a valid or
bona
fide
defence against plaintiff's
overdraft claim.
Claim
B: Medium Term Loan:
Overcharged on interest
23.
The defendants deny the amount claimed
by the plaintiff. They claim that the medium term loan was entered
into on 23 March 2015
for a restructuring exercise that the first
defendant was involved in. They refer the court to a transaction
involving an entity
known as Sphynx Trading CC and the second
defendant and state that the medium term loan was entered into to
finance the Sphynx
transaction in part. They state that on the day of
signing the loan, Coetzee undertook that the interest
'
would be reduced to prime interest rate the moment the Sphynx Trading
CC
transaction
and
a
transaction
in terms wherein one of the group PT companies bought Cormet Caravans
and an income start flowing from these transactions.'
In
furtherance of this defence, the defendants direct this court to
annexures TRA TWO AND TRA THREE. TRA TWO is the e-mail referred
to in
paragraph 26 of this judgement and TRA THREE is made up of four pages
of excel spreadsheet calculations. Defendants refer
the court to line
2 of the e-mail in which the following appears:
'We signed the restructure
agreement at 14% 'interest, Gina and you committed verbally that this
would be rectified after Sphynx
and Comet takeover, She said at that
stage we can't look at future income, once the income is there we
will sort it out. The income
has been there since 2015,
9
months ago and
nothing is sorted out’ .
24.
TRA THREE as I have mentioned is the
four pages of excel calculations out of which the defendants produce
an amount of R806 366
which they claim is the amount by which they
were overcharged on interest. It is clear that defendants rely on the
five lines set
out in paragraph 27 of this judgment as their basis
for the claim against the plaintiff. In response, plaintiff's counsel
argued
that this defence cannot be sustained at trial given the non
variation clause carried by the Medium Term Loan adding that the
alleged
agreement to reduce interest rate flies in the face of such
clause. Clause 18.10 reads:
25.
'this agreement constitutes the entire
agreement between the parties.... ... except for the changes referred
to in clauses 9.4 and
9.5 any agreed changes will be made in writing,
signed by both you and us or if the changes are recorded
telephonically, we will
provide you with written confirmation of the
change. We will deliver you a document reflecting the agreed
amendment, no later than
twenty business days after the date of the
agreed change to this agreement.'
26.
Counsel for the plaintiff referred this
court to Brisley v Drotsky
[12]
the essence of which is succinctly quoted in ABSA Bank Ltd v
Malherbe
[13]
Quite simply, the non variation clause would be of no value to the
creditor, the plaintiff in this case, if defences such as the
one
raised by the defendants were to be permitted. I find this extract
from HNR Properties CC and Another
[14]
apposite (the agreement involved was one of suretyship and the court
was concerned with,
inter alia,
whether an alleged oral or implied
release from the suretyship is permissible):
'The object of a clause such as
the one under consideration is fairly obvious. It protects the
creditor. It enables the creditor
to determine its rights with
reference to the documents in its possession. The creditor does not
have to rely on the memory of
employees or ex employees. It
protects the creditor against spurious defences and unnecessary
litigation.' 'I would add that
the need for a provision such as
clause 15 is all the greater where the creditor, as in the present
case, is a large organisation
comprising different divisions and
employing a large number of people.'
27.
The defence raised
by the defendants is not sustainable.
No
breach
28.
The defendants claim they did not breach
the agreement. In support they state that:
i.
They have never defaulted on both
agreements;
ii.
They deny that the sale of first
defendant's Spar constitutes a material deterioration.; and
iii.
They state that first defendant has
assets that it uses to generate income.
29.
I
deal with the three defences in turn. The first statement is recorded
solely to be dismissed. It is irrelevant and amounts to
nothing more
than a plea
ad
misericordiam
[15]
.
30.
On the question of assets that the first
defendant has, counsel for the plaintiff called upon this court to
dismiss this defence
pointing that first defendant has made no
attempt to provide any detail to substantiate this claim. One cannot
see the difficulty
in establishing assets as this is part of the
regime of preparing audited financial statements of many large
businesses. As such,
first defendant should be under no constraint in
providing the plaintiff with a set of audited statements to
demonstrate the claimed
assets. The undisputed facts are:
i.
A
mere three months after signing the overdraft agreement, first
defendant sold the Spar. The circumstances under which first
defendant
came to sell its business have not been placed before this
court. I add that first defendant is yet to provide evidence that it
complied with the terms of the medium term agreement in disposing off
the Spar.
ii.
Plaintiffs
counsel argued that the Spar was the first defendant's major asset
and that the plaintiff was justified in the circumstances
in its
conclusion that first defendant's financial position had materially
deteriorated.
gg) Apart from the claim, first
defendan,tin the face of the call made to it, has not seized the
opportunity to provide evidence
to show that the plaintiffs
conclusions are unjustfiied. The sentimentsexpressed in
Joob
Joob v Stocks
[16]
are helpful in
the circumstances of this case:
31.
'In John Wallingford v The Directors &
c. of The Mutual Society
(1880) 5 AC 685
(HL) at 699- 700, Lord
Hatherley referred to the objects of the new English procedure as
follows:
'I apprehend that from the first
the objects of these short methods of procedure has been to prevent
unreasonable delay, a delay
which was very prejudicial to the
creditors, and never, I am afraid, or rather, I am pleased to say,
can have been very beneficial
to the debtor himself. Simply allowing
legal proceedings to take place, in order that delay may be applied
to the administration
of justice as much as possible, is not an end
for which we can conceive the Legislature to have framed the
provisions which now
exist under the several Judicature Acts. If a
man really has no defence, it is better for him as well as his
creditors, and for
all the parties concerned, that the matter should
be brought to an is ue as speedily as possible; and therefore there
was a power
given in cases in which plaintiffs might think they were
entitled to use the power by which, if it was a matter of account, an
account might be immediately obtained upon the filing of a bill, or,
if it was a matter in which the debt was clear and distinct,
and in
which nothing was needed to be said or done to satisfy a Judge that
there was no real defence to the action, recourse might
be had to an
immediate judgment and to an immediate execution.'
All
three defences must necessarily fail.
Implied
written consent
32.
To substantiate the 'implied written
consent', defendants refer the court to a series of e-mail exchanges
marked TRA FOUR. The first
is an e-mail of 11 October 2016 from
second defendant to Coetzee titled Updated Valuation: P Kyriacou. The
body of the e-mail asks
Coetzee to confirm. There is no response from
Coetzee. Second defendant sends a follow up email to Coetzee in the
afternoon of
the same day in which he notes: 'Here are the assets for
the asset finance. Forced sale value is fine R11m.' There is further
reference
to an OD. On 28 November 2016, there is a second trail
titled, 'Doornpoort Transactions'. In the first e-mail second
defendant
records something about machines that are not banking and
asks Coetzee to advise. On the same day, Coetzee responds stating
they
are investigation the matter. The third and last email in TRA
FOUR is dated 3 February 2018
[17]
.
The e-mail comes from Coetzee and is directed to a colleague within
the bank. It reads:
'Hi William My client Paul K...
has acquired the shares in Jurgens Cl situated in
G
Rankuwa and has
offered us an opportunity to quote on the short term insurance. The
business is substantial and has a stock value
of R250m to give you
and idea. Please provide available dates to meet with the client so
that I can arrange
a
meeting.'
33.
The last e-mail is nothing more than a
business lead between colleagues. I state that the e-mail refers
second defendant to the
colleague and it refers to his acquisition of
some stake. All three emails do not in any way deal or refer to the
fact that the
first defendant sold its Spar in December 2016, nor do
these e-mails establish any 'implied written consent' on the part of
the
plaintiff as first defendant claims. The Medium Term Loan
Agreement calls for written consent prior to first defendant changing
the nature of its business or ceasing to trade. These documents
establish no defence for the first defendant.
Estoppel
34.
First defendant contends that based on
the email correspondence namely, annexures TRA TWO, FOUR, and SEVEN
it is clear that the
plaintiff through Coetzee was fully aware of the
changes in the business of the first defendant. Then first defendant
goes on to
state that in the event the email correspondence, referred
to throughout this judgement, cannot be construed to evidence 'at
least
written consent' to the changes in the first defendant's
business for the purposes of the medium term loan, then respectfully,
the plaintiff is estopped from alleging that it did not consent to
the change in the nature of the first defendant's business. In
amplification, first defendant states for the first time that it
utilized the proceeds from the Spar to finance a trans action
it
refers to as Jurgens Cl, and it claims that the plaintiff was fully
aware. First defendant further notes that since the latter
part of
2017 plaintiff was aware of first defendant's intention to open the
Campworld store in Nelspruit which did not materialize
as plaintiff
had blocked first defendant's overdraft account.
35.
Having dealt with all the correspondence
covered under TRA ONE, TWO, and FOUR and dismissed as irrelevant to
the current dispute
and not capable of supporting any of the defences
raised by first defendant, the only e-mail I have not covered is TRA
SEVEN. TRA
SEVEN comprises three emails, the first is dated 20
October 2017 from Coetzee to second defendant, the second, 21 October
2017,
from second defendant to Coetzee, and the final one, 16 January
2018 from second defendant to Coetzee. The first email reads:
'Hi Paul, As mentioned we are
unable to process the application until the Travel col
outstanding debt has been repaid. You
mentioned that you are in the
process of buying a new business which will trade under TravelCol.
Please provide details.'
In the second e-mail second
defendant replies:
'Hi Chris, Nelspruit Campworld
will start trading in Travelcol. We are aiming for 1 November 2017'.
The final email from second
defendant to Coetzee reads: 'We wanted to start on the Travelcol
account but I see its (sic) blocked?'
36.
With these e-mails first defendant seeks
to establish a position that plaintiff had rep resented that it
approved of the sale
of the Spar and or first defendant's change of
the nature of its business; and, that plaintiff would not rely
thereon to claim
the full outstanding balance. One need only have
reference to the dates of these e-mails and the defence fails. The
Spar was sold
in December 2016 and these emails are exchanged almost
a year later.
37.
The tone of the e-mail from Coetzee
makes it quite clear that the plaintiff is anxiously calling upon
first defendant to pay full
the monies owed under the facility. This
e-mail from Coetzee of 20 October is not capable of being construed
in any other manner,
much less a construction that amounts to an
'implied written consent' or prior knowledge or a position or conduct
that plaintiff
would not rely on it for breach. Nonetheless and for
good measure, the position as regards estoppel by conduct is provided
in this
dictum in Absa Bank ltd v Knysna Auto Services CC
[18]
,
where the SCA noted:
'[18] As regards estoppel by
conduct, in Concor Holdings (Pty) Ltd t/a Concor Technicrete v
Potgieter.... .. .it was held that:
'Our law is that a person may be
bound by a representation constituted by conduct if the representer
should reasonably have expected
that the representee might be misled
by his conduct and if in addition the representee acted reasonably in
construing the representation
in the sense in which the representee
did so. . . Nevertheless if a representation by conduct is plainly
ambiguous, the representee
would not be acting reasonably if he chose
to rely on one of the possible meanings without making further
enquiries to clarify
the position.' (citation excluded)
38.
Counsel for the plaintiff submitted that
this defence should fail for two reasons. They are: First, referring
to Coetzee's email
in which he unambiguously indicates that the first
defendant's debt with the plaintiff had to be repaid, counsel
submitted that
this e-mail can never be reasonably construed as prior
written consent to the sale of the Spar or the change in the first
defendant's
business. Second, he submit ted that the defendant
seeks to establish that it failed to act to its detriment by not at
tempting to change or re-arrange its bank affairs, yet this is
exactly what first defend ant attempted to do with the Campworld
transaction, which failed because by then, the plaintiff had blocked
its account for want of payment of all monies outstanding.
Counsel submitted that first
defendant has failed to establish the requirements to succeed with a
defence of estoppel. Counsel further
referred to HNR Properties CC
and Another v Standard Bank
[19]
where the court pronounced:
'It is therefore not permissible
to import into the writing, whether by reference to back ground
or surrounding circumstances
or any other source, an intention to
release which is otherwise not ascertainable from the actual language
of the document relied
upon. If the position were otherwise the very
object of the requirement of writing would be frustrated.'
39.
The defence of estoppel fails.
40.
The first defendant alleges that since
October 2016 the plaintiff was aware of the sale and, since 2017 the
plaintiff was aware
of first defendant's intention to open up the
Campworld Store in Nelspruit, which did not materialize as the first
defendant's
account was blocked by the plaintiff. Only now, 17 months
after the sale of the Spar does the plaintiff raise the alleged
breach
of contract. These statements were met with a riposte from the
Plaintiff's counsel. In the first instance, counsel referred to
Clause 14.9 of the Overdraft agreement, which states:
'Any concessions we may give you
will not be seen as a waiver of any of our rights under this
Overdraft Agreement or in a any way
affect any of our rights against
you.'
41.
Counsel further referred to Clause 18.8
of the Medium Term Loan:
'To the maximum extent permitted
by law, any special consideration we may give you will not be seen as
a waiver of any of our rights
under this Agreement or in any way
affect any of our rights against you.'
42.
He concluded that the knowledge of the
sale of the Spar does not imply any form of waiver. That is indeed
the correct position our
law, regard being heard to
inter
alia,
NHR above.
Liability of second and third
defendants
43.
One last issue remains and that is the
liability of the second and third defendants. Second and third
defendants are bound by the
individual suretyship agreements which,
as I mentioned earlier, have not been denied. The two are bound by
the liquid documents
as per annexes D and F
[20]
.
Thus, second and third defendants are liable to the plaintiff as
aforementioned
[21]
.
44.
Regarding the issue of costs, first and
third defendants are liable for costs on the scale as between
attorney and own client in
terms of:
Clauses 10.2 of the Medium Term
Loan Agreement
[22]
;
and
Clause 1.1.3 of the mortgage
bond
[23]
.
CONCLUSION
45.
In all the circumstances the defendants
have made out no defence to the plaintiff's claims. They have set out
no facts upon which
I could exercise a discretion in their favour. On
all the information before the Court, the plaintiff is entitled to
its summary
judgment. It is ordered that summary judgment in favour
of the applicant/ plaintiff be granted against the defendants jointly
and
severally, the one paying the other to be absolved, as follows:
a.
Payment
of the amount of R1 555 667.07 (One million Five Hundred and Fifty
Five Thousand Six Hundred and Sixty Seven Rand and Seven
Cents).
b.
Payment
of interest on the amount of R1 555 667.07 from 26 March 2018 to date
of full payment, both days inclusive at the prime
rate from time to
time, being 10% (Ten Point Zero Zero Percent) at 28 March 2018, plus
a margin of 8.35% (Eight Point Three Five
Percent) ie, 18.35
(Eighteen Point Three Five Percent) per annum, which interest is
calculated daily and compounded in arrears.
c.
Payment
of the amount of R 3 048 970.39 (Three Million Forty Eight Thousand
Nine Hundred and Seventy Rand and Thirty Nice Cents).
d.
Payment
of interest on the amount' of R3 048 970.39 from 26 March 2018 to
date of payment, both days inclusive at the prime rate
from time to
time, being 10% (Ten Point Zero Zero Percent) at 26 March 2018, plus
a margin of 4.25% (Four Point Two Five) ie, 14.25
(Fourteen Point Two
Five Percent) per annum, which interest is calculated daily and
compounded monthly in arrears.
e.
Payment
of costs by the first and third defendants on a scale as between
attorney own client, which costs include the employment
of two
counsel.
f.
As
against second defendant, costs of suit, including the costs
attendant to the employment of two counsel.
NN BAM
ACTING JUDGE OF THE HIGH COURT,
PRETORIA
APPEARANCES
DATE OF
HEARING:
:2 May 2019
DATE
OF JUDGMENT:
:29 May 2019
PLAINTIFF'S
COUNSEL:
:Adv S SYMON SC
:Adv E FURSTENBURG
Instructed
by:
Ramsay Webber Attorneys
Melville Road, lllovo,
Johannesburg
c/o Andrea Rae Attorneys
Douglas Street
Colbyn
DEFENDANTS'
COUNSEL:
:Adv AJ LOUW SC
Instructed
by:
Bert Smith Incorporated
Lord Charles Office Park
Brooklyn Road, Brooklyn
Pretoria
[1]
Page 23 paragraph 10.1 of plaintiff s particulars of claim; page 28
paragraph 22.2
[2]
Page 36 paragraphs 43-
44
[3]
page 66 of plaintiff's particulars of claim
[4]
Page 80 of the plaintiff's particulars of claim
[5]
Page 25 paragraph 15 and 16, particulars of claim
[6]
and Others (17121/2011)
[2011] ZAWCHC 487
;
2012 (3) SA 167
DNCC);
(2012]
2 All SA 422
DNCC) (15 November 2011)
[7]
Limited (330/13)
[2014] ZASCA 38
(28 March 2014)
[8]
4 Barclays National Bank Ltd v Love1975 (2) SA at 514 (D) at
516H-517A.
[9]
Annexure C4, page78
[10]
Annexure D, page 78, Annexure F, page 97
[11]
(676/2 01 3)
[2014] ZASCA 79
(29 May 2014)
[12]
2002 (4) SA 1
(SCA) at par [13]
[13]
(5077 /2012) (2013] ZAFSHC 78 (16 May 2013) para 28
[14]
v Standard Bank of SA Ltd
2004 (4) SA 471
(SCA),at para 15
[15]
Jili v Firstrand Bank Ltd (763/13) (2014] ZASCA 183 (26 November
2014) paragraph 7
[16]
(161/08)
[2009] ZASCA 23
(27 March 2009), paragraph 30
[17]
page 180 of the bundle of documents
[18]
(266/15)
[2016] ZASCA 93
(1 June 2016)
[19]
A
[20]
pages 79 and 97 of the particulars of claim
[21]
paragraph 4 page 3 of this judgement
[22]
page 94
[23]
page 126