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[2018] ZAGPPHC 646
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Firstrand Bank Limited v Du Plessis and Others (29137/2016) [2018] ZAGPPHC 646 (19 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 DIVISION, PRETORIA)
(1)
NOT REPORTABLE
(2)
NOT OF INTEREST TO OTHER
JUDGES
(3)
REVISED.
Case Number: 29137/2016
19/3/2018
In
the matter between;
FIRST
RAND BANK
LIMITED
Applicant
and
ANDRE;
GEORGE DU PLESSIS
First Respondent
JORPE(PTY)
LTD
Second Respondent
JORPE TURNKEY PROJECTS CC
Third
Respondent
JUDGMENT
NOWOSENETZ AJ
[1] The
applicant claimed judgment in its notice of motion for payment of the
amount
of R 2 911 156,88 against the respondents jointly and
severally arising from three suretyships signed on February 2010 by
each
of them as co-principal debtors and sureties for the
indebtedness of Astradeals 121 CC (Astradeals). the principal debtor.
The
first respondent admits signing the respective suretyships on his
own behalf and on behalf of the ether two respondents as director
and
member respectively. The principal debt arose from credit facilities
granted to Atradeals by the applicant between 2007 and
2010. The
first respondent was the sole member of Astradeals which was
converted to a private company of which he was the sole
member. The
applicant abandoned its claim against the second respondent. (The
first and third respondents are referred to as ;the
respondents').
Both parties filed affidavits late, but no prejudice was caused and
neither party objected. Condonation was granted.
On 12 March 2018 at
the roll call the respondents applied for leave to file a
supplementary answering affidavit, The basis was
new evidence
relating to alleged undisclosed payments and the Rule 35(12)
developments. The applicant was also given leave to file
a
supplementary replying affidavit, both of which were duly filed.
BACKGROUND
[2]
The applicant granted credit facilities and advanced monies to
Astradeals pursuant to three
agreements dated 25 October 200 7, 16
November 2007 and 3 February 2010. The first respondent was only a
signatory to the third
agreement which he admits.
[3]
Astradeals defaulted on repayments from June 2014 and no further
payments were made (save
for a payment of R20 000 in October 20 14).
The applicant applied for the liquidation of Astradeals and a
provisional order was
issued in this division on 31 March 2105. A
settlement agreement signed by the first respondent on behalf of
Astradeals was made
an order of court on 5 May 2015 and the
provisional order of liquidation was discharged. Astradeals admitted
its Indebtedness towards
the applicant in the amount of R 2 735
347.33 together with interest at the then facility rate of 8.5% plus
0,25% interest per
annum compounded monthly calculated from 20
November 20 14. Astradeals undertook to settle Its indebtedness by 5
August 2015. The
settlement was not a novation and the securities
under the facility agreements were intact.
[4]
Astradeals again defaulted and on 15 October 2015 it was placed under
final liquidation
at the instance of another creditor. As at 29
October 2015 the deponent of the applicant's founding affidavit, Ms
KJ Cawood attached
a certificate of Indebtedness issued by her
in
the amount of R2 911 156,88 plus interest calculated at the rate
of 9,5% from 30 October 2015.
[5]
On 2 December 2015 the applicant issued a simple summons for recovery
of this debt against
the respondents based on the suretyships but at
the stage after an application for summary Judgment was filed the
applicant withdrew
the action proceedings and issued this application
on 13 April 2106. The liquidator sold the encumbered property of
Astradeals
for R2 793 000.00 and a provisional dividend of R950 000
had been received by the applicant on 31 October 2017.
THE ISSUES
[6]
Aside from the points in limine and application to strike out dealt
with below, the main
disputes raised by the respondents were that the
third agreement dated 3 February 2010 was a new facility under which
only R1 329
079.99 was advanced and that the suretyships were limited
to the indebtedness of Astradeals as from 3 February 2010 . The
parties
intended that the respondents would not be liable for any
debts of Astradeals prior to 3 February 2010. Conditional
rectification
of the suretyships was sought in the event of the rt
not upholding this interpretation. The first respondent had no
knowledge of
the first
and
second facility agreements as he
was not a member of Astredeals when those agreements were signed. He
became a member of Astrodeals
from 31 August 2008.
[7]
The indebtedness and amount due by the respondents was in dispute.
First respondent
alleges that more than the mount of R R132 079. 99
has been repaid and that since March 2010 to October 2014 Astradeals
repaid
R2 402 531.20. This allegation is valueless because on 3 May
2015 the first respondent admitted indebtedness of Astradeals in the
amount of R 2 735 347.33 plus interest. On 29 October 2015 Ms Cawood
signed a certificate of indebtedness of Astradeals in the
sum of R2
911 156, 88. No contradictory evidence of the balance due as at that
date has been submitted by the respondents.
[8]
The. applicant attached recent statements to the supplementary
replying affidavit reflecting
an opening balance of R3 3 0 907.95 as
at 19 February 2017. Ms Cawood set out the outstanding capitalised
interest from February
to November 2017 and after adjustment for the
provisional dividend the capital sum claimed is now R2 869 15746. An
interest adjustment
in favour of the applicant was also included in
the amount of R70 000 arising from interest on the liquidation
administrative costs
still to be decided by the Master .
[8] In
the supplementary answering affidavit the first respondent stated
that a provisional
dividend of R950 000.00 was made on 31 October
2017. A further payment of R20 6 923.50 is still to be made by the
liquidator of
Astradeals to the applicant. Leaving aside the
correctness of this evidence, it was pointed out by Ms M Riley on
behalf of the
applicant that the respondents were not only sureties
but were coprincipIe debtors and this has the legal consequence
that
the benefits of excussion and division are renounced by a
surety.
Neon and Cold Cathode
Illuminations (Pty) Ltd v Ephron
1978
(1) SA 463
(A). Thus respondents cannot rely on payments to be made
out only payments actually made. The applicant confirmed in its
supplementary
replying affidavit that no payments were m de after 31
October 2017.
NATIONAL
CREDIT ACT
[9]
The respondents contended that the facility agreements were subject
to the National
Credit Act 34 of 2005 (the NCA) was applicable to the
facility agreements and further that the parties had agreed that the
NCA
would be applicable. The applicant denied any such agreement and
further submitted that the NCA excluded juristic persons with a
monetary asset value of or annual turnover of more than R1 000 000.00
and where the agreement is considered a large agreement ie
in excess
of R250 000. Further it was decided that contacting parties cannot
bind a court by agreeing to incorporate provisions
of the NCA into
an
agreement which is not within the purview of the statute.
RMB
Private Bank a division of First Rand Bank limited v Kaydez Therapies
CC {in liquidation)
&
two others
2013 (6) SA 308
(GSJ). These submissions are. unassailable and this defence is
rejected.
IN LIIMINE, STRIKING OUT AND RULE
35 (12) APPPL!CATIONS
[10] The
respondents raised several points in limine. The issue of non joinder
of the second respondent
was resolved and the other points were
abandoned. The remaining issue was the lack of personal knowledge of
the cause of action
by Ms Cawood. This point is associated with the
defence on the merits of hearsay. The first respondent stated that he
had never
met her and she had, no personal knowledge of or the
transactions in this case. Ms Cawood stated in the applicant's
founding affidavit
that she was the authorised recoveries manager and
in paragraph 2.2 that she obtained personal knowledge by -
' perusing the records and
documentation referred to...which books and records are under my
control... In addition and by virtue
of my capacity aforesaid, I have
unfretted [sic] access to the Applicant's electronic records and its
relevant transaction files.
have acquainted myself with all the
relevant documents records and notes ... '
[11] It
appears from documents annexed to her founding affidavit that she
also was the deponent in the liquidation
application against
Astradeals in which she stated that she had acquainted herself with
the documents end records of the applicant.
It is common cause that
she deposed to tr1e affidavit in support of summary judgment against
Astradeals. In her replying affidavit
she stated that she had also
gleaned information from discussions with her colleagues who were
involved in this matter. The respondents
applied to strike out
paragraphs 3 to 41 of the founding affidavit (of total 41 paragraphs)
and paragraphs 2 to 29 of the replying
affidavit ( of total 29
paragraphs). It was shown in a detailed spreadsheet submitted on
behalf of the applicant that most of the
allegations in the
applicant's founding affidavit were either admitted or the defendants
pleaded no knowledge. The authenticity
of the third facility
agreement and the three suretyships signed by the first respondent
were admitted. Neither were the applicant's
bank statements for
Astradeals during the period 1 February 20,0 to 19 May 2015
challenged.
[12] The
applicants cited
Shackleton Credit
Management v Microzone Trading 88 CC
2010
(5) SA 112
KZP- where the ·following principles were expressed
in the context of summary judgment: The requirement of a person who
can swear positively to the facts precludes information that the
person obtains from another source or documents; the deponent in
a
corporate entity is not expected to have personal knowledge of every
fact and can legitimately rely on company records in possession
of
the company to swear positively to at least certain of the relevant
facts. However the cases do not go so tar to suggest that
the
deponent to an affidavit in support of summary judgment can have n9
person ! knowledge whatsoever and rely exclusively on the
perusal of
the records and documents in order to verify the cause of action and
the facts giving rise to it.
[13] Further
reliance was placed on
First Rand
Bank v Huganel Trust
2012 (3) SA 167
WCC, which also dealt with summary judgment, where it was stated that
there will be cases where some further personal knowledge
is required
beyond examination of the documents by reason of the nature of the
defence raised, if the defendants if proved could
constitute a valid
defence.
[14] The
applicant submitted that in addition to familiarizing herself with
the documents and records of
the applicant pertaining to this case,
Ms Cawood was actively involved in the litigation with Astrodeals in
which she deposed to
both the liquidation and summary judgment
application . The authorities of
Maharaj v Barclays National Bank
Ltd
1976 (1) SA 418
.AD ;
Barclays National Bank Ltd v Love
1975
(2) SA 514
D and Rees v Investec Bank 2014(4) 220 SCA 15
were cited to the effect that a deponent can acquire personal
knowledge of the debtor's
financial standing in the ordinary course
of duty in the bank that employs the deponent. The information set
out in the affidavit
must support this conclusion. First hand
knowledge of every fact is not required.
Standard Bank of South
.Africa L.td v Secatsa (Pty) Ltd
1999 (4) SA 229
(C). These
authorities deal with summary judgment proceedings which are not
quite the same as motion proceedings. To my mind more
leeway can be
allowed in motion proceedings in affidavits claiming personal
knowledge of the cause of action because of the opportunity
of the
applicant to reply to a challenge regarding personal knowledge and
also the possibility of referring material disputes of
fact to oral
evidence or trial.
[15] It is
inconceivable in the course of a transaction history spanning since
2007,
that every official of the bank who had personal
dealings with the debtor must make an affidavit. Indeed this well
nigh an impossibility
in large institutions which invariably have a
turnover, of persons who may individually or in teams deal with a
client from time
to time as well es contingencies such by employees
leaving or passing away. Of consequence is that the respondent has
not raised
any defences which require any knowledge beyond what she
has deposed to and the documents which she has attached. The deponent
therefore cannot be said to know nothing about the cause of action.
It can be reasonably inferred that she has sufficient personal
knowledge from her experience in the Astrodeals litigation together
with a familiarity of the facility agreements and suretyships.
[16] The
authenticity of any of the documents underpinning the cause of action
have not been seriously disputed
by the respondents. It is trite that
that it is not necessary to prove an admitted fact. The. indebtedness
of the Astrodeals is
presented inter alia by bank statements which
are admitted and also in the first respondent's settlement agreement.
The court can
relax the strict application of hearsay in terms of the
statutory discretion and this is an appropriate case to do so. There
is
no aspect of the applicant' s affidavits that can be regarded as
inadmissible even if constituting hearsay and the striking out
application on the basis of lack of personal and inadmissible hearsay
is dismissed.
[17]
The respondents served a Rule 35 (12) notice dated 15 August 2016 on
the applicant calling for
the inspection of the books and records
referred to by her in paragraph 2.2 of her affidavit referred to
above. This notice was
disregarded by the applicant. A further Rule
35 (12) notice dated 22 February 2108 was delivered by the
respondents containing
21 specified items mainly based on paragraph
2.2 of her affidavit. The respondents relied on Rule 35 (12) provides
that the consequences
of not complying with Rule 3S (12) are that the
applicants may not use such documents save with the leave of the
court. The applicant
contended that it has attached neither all the
documents it relies upon and that the respondents have not shown why
the further
documents are required nor any prejudice by non
compliance by the applicant. Indeed the disputes raised and defences
on the merits
required no additional documentation. it was also
argued that the notices required the full documentation which formed
part of
the facility agreements which were not attached. No attempt
was made to show what assistance this would be. No further steps to
enforce the first rule 35(12) application were taken until a few
weeks before the hearing. The notices were frivolous and unnecessary
and were not shown to be reasonably required to defend this
application. The striking out of the documents to the extent that
they are already on record is refused and the applicants are granted
leave to use them. Costs are awarded on an attorney and client
scale
for the Rule 35( 12) application.
THE FACILITY AGREEMENTS
[18] An
amount of R 2 000 000 .00 was advanced by the applicant to Astradeals
in terms of the
first credit facility agreement repayable over 120
months and the previous members of Astradeals signed suretyships. The
second
facility agreement states that the sum advanced is R2 875
000.00 also payable over 240 months. The previous members of
Astrodeals
again signed suretyships A covering security bond over
property registered in the name of Astradeals was registered in favor
of
the applicant on 4 March 2008 pursuant to this advance. The third
credit facility agreement states that the facility sum is R3 900
000.00 payable over 120 months. The three suretyships were signed by
the first respondent as stated above. Nowhere in this document
does
it state that the sum advanced is R1 329 07 9. 99 as alleged by the
respondents. Nor does the second agreement stipulate that
the advance
is R875 000 (being the additional amount to the first advance). Each
advance after the first is clearly cumulative
of previous facilities
and do not stand in isolation as separate loans. Thus the second and
third agreements cannot be seen as
new loan facilities but rather are
extensions of the prior facilities.
THE SURETYSHIPS AND RECTIFICATION
[19]
Clause 1.1 of the suretyships reads:
' the due and punctual payment by
the debtor to the Bank of II and any sums of money which may now be,
or which may hereafter become,
owing by the debtor to the Bank in
terms of the RMB Private Bank Single Credit Facility Loan agreement/s
entered into or about
to be entered into by the Bank and the
debtor...'
This provision is plain and
unambiguous. It refers to all any sums of money owing presently and
in terms of the facility agreements
entered into between the parties.
There is no express provision excluding or including any previous
agreements from the suretyships.
The wording ' agreement/ s' is
sufficient to convey an inclusive meaning. The applicant denies that
any understanding existed that
the suretyship was limited to the loan
agreement and debts after but not before 3 February 2010. There is
nothing in the context
of this suretyship to alter the meaning. The
nature and purpose was the same as the suretyships given by the first
respondent's
predecessors as security for the first and second credit
facility agreements. There is no space for rectification of the
suretyships.
No basis in evidence was produced by the respondents of
a common intention for the suretyships to reflect any other terms
than
those recorded. The applicant rejected this notion completely.
Nor is there any inherent commercial rationale for such a
rectification.
No genuine dispute of fact arises.
PREJUDICIAL CONDUCT
[20] The
respondents complain of a wrongful and negligent payment instructed
to be made on instructions
of the applicant to the municipality for
rates and municipal charges in relation to the sold property in the
sum of R1 004 548.40.
The applicant explains that this was an
administrative fee paid to the liquidator to facilitate the transfer.
This amount has been
credited to the applicant and there is no
prejudice to the respondents. Prejudicial conduct by the applicant
was also based on
the failure of the applicant to assess the
affordability of debtor's monthly instalments. However the credit
facility agreements
state that the amount repayable is inserted to
assist the debtor to determine whether he is able to afford the
credit. Thus the
debtor must also bear responsibility. This point has
no substance as a defence to the suretyships.
CONCLUSION
[22] Th
applicant has proven that the first credit facility agreement was
extended twice by simply increasing
the credit limit incrementally
and the third· agreement did not constitute a separate and new
credit facility . The suretyships
were plainly as a covering security
for all the Indebtedness of Astradeals existing at as 3 February
2010. The applicant is entitled
to the sum of R2 869 157.46 which
includes capitalized interest from February to November 2017.
ORDER
[23]
An order is made in terms of the draft
Order marked "XY''.
L. NOWOSENETZ
ACTING JUDGE OF THE HIGH COURT
CASE
NO: 29137 / 20 16
HEARD
ON: 15 MARCH 2018
FOR
THE APPLICANT/ APPELL.ANT / PLAINTIFF ; ADV. M RILEY INSTRUCTED BY:
FRANS RABIE ATORNE;YS
FOR
THE RESPONDENT /DEFENDANT: ADV. C WOODROW
INSTRUCTED
BY: RORICH WOLMARANS & LUDERITZ INC
DATE
OF JUDGMENT: 19 MARCH 2018
IN THE HIGH COURT OF SOUTH
AFRICA
(GAUTENG DIVISION, PRETORIA)
On this 15
th
day of
March 2018 before the Honourable Mr Justice Nowosenetz AJ
Case
No: 29137/ 2016
In
the matter between:
FIRSTRAND
BANK
LIMITED
Applicant
(REG.NO:
[….])
and
ANDRE
GEORGE DU
PLESSIS
First Respondent
(ID.
NO: [….])
JORPE
(PTY)
LTD
Second Respondent
(REG
NO: 1997/016214/07)
JORPE
TURNKEY PROJECTS
CC
Third Respondent
(REG
NO: [….])
DRAFT
ORDER
Having read the papers and after
hearing counsel, judgment is granted against the First and Third
Respondents jointly and severally
, the one paying the other to be
absolved , which liability will be joint and several with any claims
proven to and paid by liquidators
of the Second Respondent, as
follows:
1. Payment
in the amount of R2 869 157.46;
2. Interest
on the aforesaid amount at the rate of 9.75% per annum , calculated
from 15 February 2018 to date of payment;
3. Costs
of the application on the scale as between attorney and client.
BY ORDER
REGISTRAR
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG DIVISION, PRETORIA)
On
this 15
th
day of March 2018 before the Honourable Mr
Justice Nowosenetz AJ
Case
No: 29137/2016
In the matter between:
FIRSTRAND
BANK
LIMITED
Applicant
(REG.NO:[….])
and
ANDRE
GEORGE DU PLESSIS
First Respondent
(ID.
NO: [….])
JORPE
(PTY) LTD
Second Respondent
(REG
NO: [….])
JORPE
TURNKEY PROJECTS CC
Third Respondent
(REG
NO: [….])
DRAFT
ORDER
Having read the papers and after
hearing counsel, judgment is granted against the First and Third
Respondents jointly and severally
, the one paying the other to be
absolved , which liability will be joint and several with any claims
proven to· and paid
by liquidators of the Second Respondent,
as follows:
1. Payment
in the amount of R2 869 157.46;
2. Interest
on the aforesaid amount at the rate of 9.75 % per annum , calculated
from 15 February 2018 to date of payment;
3. Costs
of the application on the scale as between attorney and client.
BY ORDER
REGISTRAR