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[2018] ZAGPPHC 349
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Business Partners Limited v Towers and Another (32325/2017) [2018] ZAGPPHC 349 (1 March 2018)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
IN THE HIGH
COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO: 32325/2017
1/3/2018
(1)
NOT
REPORTABLE
(2)
NOT
OF INTEREST TO OTHER JUDGES
(3)
REVISED
BUSINESS
PARTNERS LIMITED
:
Plaintiff/Applicant
(Registration
number: 1981/000918/06)
And
RAJNA
TOWERS
: 1
st
Defendant/1
st
Respondent
(Identity
number:[….])
BIO
INDUSTRIAL SERVICES (PTY) LTD
: 2
nd
Defendant
/2
nd
Respondent
(Registration
number: 2012/024095/07)
JUDGEMENT
A.
INTRODUCTION
1. This
is an opposed summary application based upon two claims of R3 304
899.99
(three million three hundred and four thousand eight hundred
and ninety-nine rand and ninety nine cents) and R1 035 657.47 (one
million and thirty-five thousand six hundred and fifty-seven rand and
forty-seven cents) against the respondents. The respondents
are sued
in the capacities as sureties and co-principal debtors
in
solidum
with Bio Prop Invest (Pty)
Ltd ("the principal debtor'').
B.
FACTS
2. The
principal debtor concluded two loan agreements with the applicant
on
4
th
December 2014 and the respondents stood as sureties and co-principal
debtors
in solidum
with
the principal debtor for those loans in terms of the suretyship
agreement.
3. The
principal debtor defaulted on the loans and after it was called
up to
bring the arears up to date during May 2016, not all arrears were
paid. As a result, the principal debtor was liquidated
on 30 November
2016.
4. The
respondents were served with summons and filed Notice of appearance
to Defend the action.
5. It
was the Notice of Appearance to Defend that led to the applicant
applying for summary judgement.
6. In
their opposing affidavit, the respondents aver that they have a
defence to the claim by the applicant. They contend
inter
alia
,
that
after being called upon to bring the arrears of the principal
debtor's account up to date during May 2016, they were granted
an
extension to repay the arrears with no specific date by when the
arrear payments were to be made. They further aver that the
extension
or rather the indulgence to repay the arrears amounted to variation
of the loan agreements.
7. The
respondents further contend that the claim by the applicant is
not
for a liquidate amount nor is it based upon a liquid document
because:-
7.1. It
is based on suretyship agreement in respect of loan agreements
breached by the principal debtor;
7.2. The
suretyship undertakings by the respondents do not record their
liability in any specific amount
of money;
7.3. The
suretyship record that a certificate signed by a manager or
accountant of the applicant as to the
amount of debt and the date for
payment of such accounts shall be prima facie proof of the contents
thereof, and the surety's indebtedness
in terms of the suretyship.
7.4. The
certificates of balance are not supplemented by any statements of
account or any other means of
calculating the quantum;
7.5. Nowhere
in the suretyship is it recorded that the certificate of balance
shall be deemed a liquid document.
7.6. The
second respondent owns an immovable property which was used as
security for the obligations of the
principal debtor and the property
is valued at R4 053 109.09 (rand four million and fifty-three
thousand one hundred and nine and
nine cents).The second respondent
passed a mortgage bond in favour of the applicant:
7.7. Following
the liquidation of the principal debtor, the mortgaged property is in
the hands of the liquidators
who will sell it and pay the proceeds of
sale to the applicant as a secured creditor:
7.8. As
a consequence of the disposal of the property and payment of the
proceeds thereof to the applicant,
the applicant’s actual claim
against the respondents cannot be properly quantified and this places
the quantum of claim in
dispute.
7.9. The
liquidators of the principal debtor have not agreed to provide the
respondents with the details
of the applicant's claim against the
estate of the principal debtor.
8. In
his submission on behalf of the applicant, Mr Alli has provided
a
sequence of events to demonstrate that the so-called variation was in
fact an indulgence which did not amount to variation of
the repayment
terms of the loan agreements.
C.
THE ISSUE FOR DETERMINATION
9. The
issue for determination is whether or not the respondents have
made
out a defence in their opposing affidavit.
D.
LEGAL PRINCIPLES
10. The
summary judgment process is regulated by the provisions of Rule 32 of
the Uniform
Rules of this Court.
11. Rule
32(3)(b) provides as follows:-
"(3)
Upon the hearing of an application for summary judgment the
respondent may-
(b)
satisfy the court by affidavit (which shall be delivered before noon
on the court day but one preceding the day on which the
application
is to be heard) or with the leave of the court by oral evidence of
himself or of any other person who can swear positively
to the fact
that he has a bona fide defence to the action; such affidavit or
evidence shall disclose fully the nature and grounds
of the defence
and the material facts relied upon therefor."
12.
A
respondent in a summary judgement application needs to set out facts
which, if proved on trial, will constitute an answer to the
applicant's claim.
[1]
13.
It
will suffice if respondent swears to a defence, valid in law, in a
manner which is not inherently and seriously unconvincing.
[2]
14.
The
respondent is not at this stage required to persuade the court of the
correctness of the facts or that there is a balance of
probabilities
in favour of one party or other.
[3]
15.
In
Mowschensonand
Another v Merchantile Acceptance Corporation of SA Limited
[4]
the
following was said by Court:-
"the
proper approach (to summary judgement applications) appears to me to
be one which keeps the important facts in view that
the remedy for
summary judgement is an extra-ordinary remedy, and very stringent
one, in that it permits a judgment to be given
without trial. It
closes the doors of the court to the respondent (see the case of
Symington and Cob Supra). This can only be done
if there is no doubt
but that the applicant has an unanswerable case..."
[5]
16.
If
there is nothing inherently incredible in the respondent's answer and
if that answer, if proved, would support a defence that
is good in
law, the court will be obliged to dismiss the application and give
the respondent leave to defend the action:-
[6]
17.
In
Shepstone
v. Shepstone
[7]
the
following was held by court:-
"...a
respondent may successfully resist summary judgment where his
affidavit shows that there is a reasonable possibility
that the
defence he advances may succeed on trial. If there is doubt whether
the respondent has a bona fide defence, caused by
a defective
affidavit, the benefit of the doubt ought to go to the respondent.
(See: JNO G Teale and Sons (Pty) Ltd v. Vrystaatse
Plantediens (Pty)
Ltd
1968 (4) SA 371
(0)".
18.
In
Graha
v Pupkewitz & Sons (Pty) Ltd,
[8]
the
court considered a cause of action consisting of a deed of surety and
the allegation that goods were sold and delivered for
a certain
amount and held as follows:-
"...
it is a cause of action which is indicated with a minimum of
particulars. It may not be excepiable but shows an inherent
secrecy
which places the respondent in an unfavourable position should he
wish to defend the action...It is true that his defence
does not
comply with the requirements of Rule 32 (3), viz a complete statement
of the nature and grounds of the defence, but this
lack ought, in the
present case, I think, be judged in the light of his impotence by the
formulation of its cause of action by
the plaintiff. Because of the
particular nature of the combined facts which were before the court a
quo. I think this is pre-eminently
a case where the court a
quo
ought to have exercised its discretion, and given the defendant
the opportunity to request further particulars and defend the
action."
E.
REASONS FOR THE JUDGMENT
19. In
this case, it is averred that an indulgence was extended to the
principal debtor
to bring arrear payments up to date. The respondents
contend that this indulgence amounts to variation of the loan
agreements.
It is not necessary at this stage to inquire as to the
correctness of this assertion. It is sufficient that if this
assertion is
established at trial, it may constitute a valid defence
to the applicant's claim.
20. It
has been contended that other than the certificate of balance issued
by the
applicant, there are no supplementary statements of account,
upon which the certificate of balance is based. This lack of the
statement
of account and the fact that the suretyship agreement
itself provides for unlimited liability of the respondent creates a
prejudice
for the respondents to not can establish factually the true
balance due to the applicant.
21. The
respondent contend further that the liquidators of the principal
debtor was
not willing to share information with the respondents and
to allow then access to the books of the estate of the principal
debtor
to establish the statement of accounts.
22. It
appears apparent from the affidavit resisting the application for
summary
judgment that indeed the liquidation and distribution account
of the estate of the principal debtor has not be concluded.
Consequently,
the respondents will be disadvantage-das they claim the
value of the bonded property is more than R4 million.
23. I
am of the view that it will not be in the interest of justice that
the respondents
be denied the opportunity of requesting further
particulars in preparation of trial to verify the precise quantum
that the applicant
is entitled to claim taking into account the
set-off from the proceeds of sale of the property secured by a
mortgage bond in favour
of the applicant.
24. Consequently,
I am of the view that the respondents should be granted leave to
defend
the claim.
25. It
is not necessary at this stage to deal with the full merits of the
case submitted
on behalf of the applicant's counsel Mr Alli.
ORDER
26. The
application for summary judgment is hereby dismissed and the costs
will be in the
main action.
M.L.
SENYATSI AJ
For: Plaintiff
/Applicant: MR
N ALLI
INSTRUCTED BY
MENDELOW - JACOBS ATIORNEYS
MELROSE
NORTH, JOHANNESBURG
For:
Defendants/Respondents: MR
D MILNE
INSTRUCTED BY
CALTEAUX & PARTNERS
ATTORNEYS
JOHANNESBURG
[1]
See Breintenbach V. Fiat
1976 (2) SA 226
at 2288.
[2]
See Arend V. Astra
1974 (1) SA 298
(C) at 303 -304
[3]
See Tesven CC and Another v. S.A. Bank of Athens
2000 (1) SA 268
SCA
[4]
1959(3) SA 362 (W) at 366 E - 367 8
[5]
See also Kroonklip Beleggins (Edm s) Beperk v Allied Minerals
Limited
1970 (1) SA 674
{T) at 678 and City Bank NA, SA Branch v.
Paul NO and Another 2003 (2) All SA 484 (T)at 502
[6]
See Mowschenson and another v Mercantile acceptance corporation of
SA Limited (supra)
[7]
1974 (2) SA 462
(N) At 466 - 467
[8]
1973 (3) SA 49(A)