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[2017] ZAFSHC 96
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Small Enterprise Finance Agency (Soc) Limited v Furnserve Sic CC and Others (1256/2017) [2017] ZAFSHC 96 (22 June 2017)
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IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case
number: 1256/2017
In
the matter between:
SMALL
ENTERPRISE FINANCE AGENCY
Applicant
(SOC)
LIMITED
and
FURNSERVE SIX
CC
First
Respondent
MANKOSI
LEFUO
Second Respondent
GAUTA LAWRENCE
LEFUO
Third
Respondent
HEARD
ON:
15 June 2017
DELIVERED
ON:
22 June 2017
MHLAMBI,
J
[1]
The applicant (plaintiff in the main action) applies for summary
judgment against the respondent (defendants in the main action)
for
payment of R 2 391 720.01 with interest thereon at 16.10%
calculated from 1 November 2016 to date of final payment
and costs.
[2]
The applicant relies on a written Development Term Loan Agreement
entered into between itself and the first respondent on 3
June 2015
in terms of which a capital amount of R 2 687 323.00 was
advanced to the first respondent. The term of the
loan was for a 3
months period reckoned from the date on which the loan amount or any
part thereof was advanced to the first respondent.
A certificate
issued by an authorised signatory of the respondent shall be
prima
facie
proof
of the fact stated therein which shall include the amount owing, the
interest payable, the date from which the interest shall
be
calculated and the cause of action. The first respondent shall be
liable for the payment of any legal costs actually incurred
by the
applicant in any action arising from the loan agreement which shall
include legal costs on an attorney and own client scale.
[3]
The second and third respondents executed deeds of suretyship in
favour of the applicant for the due and punctual payment of
all sums
owed by the first respondent to the applicant.
[4]
On 30 August 2016 the applicant through its debt collection agent,
Asili Risk Management, notified the first respondent of the
breach
and demanded payment in full of the balance of R 2 266 241.44
by 7 September 2016. The first respondent failed
to remedy the breach
and as at 31 October 2016, the balance owing was the amount of R
2 391 720.01. Similarly, the applicant
alleged that both
second and third respondent were in breach of the loan agreement in
that they failed to fulfil their obligations
in terms of the
suretyship agreements.
[5]
The application is opposed and the respondents raised the following
issues:
5.1
Whether the deponent to the founding affidavit, as an interim General
Counsel, had the necessary personal knowledge as required
by law;
5.2
Whether the deponent to the applicant’s affidavit verified the
cause of action as required by law;
5.3
Whether the founding affidavit was properly commissioned as the
commissioner of oaths did not state his full names after
signing the
oath deposed to by the applicant’s deponent;
5.4
Whether the respondents had a
bona fide
defence and fully
disclosed the nature and grounds as well as the material facts of the
defence relied on.
5.5
Whether the respondents entered the notice of intention to defend
solely for the purpose of delaying the action.
[6]
The question that arises is whether the application as it stands is
technically in order and complies with the requirements
of Uniform
Rule 32(2)
[1]
. That brings one
to the first preliminary point raised by the respondents. I was
referred to Shackleton,
supra
where the attorney’s “personal knowledge” of the
facts giving rise to the applicant’s cause of action was
derived from documents he inspected and that constituted his
investigation of the claim. His affidavit, the court found, was
entirely
hearsay when he purported to verify the facts giving rise to
the claim and the amount of that claim
[2]
.
It was contended on behalf of the respondent that the deponent
clearly relied on hearsay evidence based on an unexplained and
illogical job description, namely “Interim General Counsel
[3]
”.
A counsel would refer to an advocate, it was contended, who
represented a party in a court of law and his description clearly
did
not comply with the requirement of the relevant Rule.
[7] The deponent to the
affidavit in support of summary judgment stated:
“
1.
I am an adult male and Interim General Counsel of the Applicant, and
employed as such at [...] E. F.,
Block D Eco Park, [...] T. C. (off
Witch Hazel Avenue), Centurion, Gauteng Province.
2.
I am authorised to depose to this affidavit in my aforesaid capacity,
and the facts deposed to
herein are, save where the contexts(sic)
indicates otherwise, within my personal knowledge and both true and
correct.
3.
I am fully acquainted with the Defendant’s account held with
the Plaintiff to which the indebtedness
relates, as I have an
oversight role over the legal adviser who handles this matter.
4.
I confirm that the Respondents are indebted to the Plaintiff in the
sum of
R 2 391 720.01 (Two Million Three Hundred and
Ninety One Thousand Seven Hundred and Twenty Rand, One Cent),
excluding interest on the aforesaid sum at
16.10%
(sixteen
point one zero per cent) per annum calculated from 1 November 2016,
to date of final payment both days inclusive, for their
breach of the
Development Term Loan Agreement and Suretyship Agreements
respectively, as more full set out in the Combined Summons.
5.
The Respondents have delivered Notice of Intention to defend the
action on 31 March 2017.
6.
I verily believe that the Respondents do not have a bona fide defence
to the action, and that they
have delivered Notice of Intention to
Defend solely for the purpose of delay.”
[8]
In
Rees
v Investec Bank
[4]
,
the bank had proceeded on the suretyship agreements against the
appellants and the suretyships provided for a certificate of balance
to be issued which would serve as a liquid document or constitute
prima
facie
proof
of the sureties’ indebtedness. It was against that backdrop
that the deponent’s affidavit must be viewed. The
dependent in
that case, Mrs Ackerman, relied on the information at her disposal
which she obtained in the course of her duties
as the bank’s
recoveries officer to swear positively to the contents of her
affidavit. She had, prior to the institution
of the action,
corresponded with the applicant’s attorney in regard to the
principal debtors’ delinquent accounts and
had also addressed
letters of demand to them, received letters of response which
canvassed the appellants’ defences. “
She
could thus ‘swear positively to the facts’,’ verify
the cause of action and the amount claimed’ and
‘assert
that in her opinion the appellants did not have a bona fide defence
to the action’ and had entered an appearance
to defend ‘solely
for the purpose of delay’. These factors show that the
requirements set out in Maharaj are met
[5]
”.
Similarly, paragraphs 3 and 4 in casu are descriptive of the deponent
being seized with the matter seen more especially
in the light of the
exchanged e-mails referred to in the respondents’ opposing
affidavits relating to the demand of the unpaid
capital amount.
[9]
In
Buttertum
Property (Pty) Ltd v Dihlabeng Municipality and Others
[6]
it was stated:
“
Firstly,
the respondent’s deponent elected to use the word “confirm”
instead of “verify”…….there
can be no doubt
that “verify” has, generally speaking, a much stronger
meaning than the word “confirm”……..However
if this was respondent’s only obstacle, I would probably be
inclined to find that the mistake could be condoned
”
.
In
Maharaj
[7]
it was stated that
“
while
undue formalism in procedural matters is always to be eschewed, it is
important in summary judgment applications under Rule
32 that, in
substance, the Plaintiff should do what is required of him by the
Rule……. Where the affidavit fails to
measure up to
these requirements, the defect may, nevertheless, be cured by
reference to other documents relating to the proceedings
which are
properly before the court…….The principle is that, in
deciding whether or not to grant summary judgment
the court looks at
the matter “at the end of the day” on all documents that
are properly before it.”
[8]
[10]
The commissioner of oaths who commissioned the affidavit, instead of
writing his full name, was content to use his stamp with
the
following particulars
“
T
Soqaka 7187101-2
”
.
His signature, the South African Police Service date stamp, full
address and the office held by him, appear thereunder. Only his
initials and not his full name appear on the attestation. I am
satisfied that the commissioner substantially complied with
regulation
4(2)(b) of the regulations promulgated in terms of section
10 of the Justices of the Peace and Commissioners of Oaths Act 61 of
1963. The objection raised is purely technical, does not prejudice
the respondent and the non-compliance is therefore condoned
[9]
.
[11]
During oral address, it was conceded on behalf of the applicant that
the amount of R 150 000.00 referred to and of which
the proof of
payment was annexed to the respondent’s opposing affidavit, was
indeed paid on 13 October 2015. An additional
payment of R 100 000.00
was made on 14 December 2015. It was contended on the applicant’s
behalf that these amounts
be subtracted from the capital claim and
the Court was requested to grant summary judgment in the reduced
amount of R 2 140 720.01.
[12]
The first respondent admitted being indebted to the applicant in a
certain amount but denied the correctness of the amount
claimed. The
first respondent contended that though he could only provide proof to
the court of only R150 000.00 paid, various
other payments
would be brought to the attention of the Court at the hearing
of the trial or if proof of such payments were
located in time, by
way of a supplementary affidavit in these proceedings.
[10]
Furthermore, “throughout the loan agreement” first and
third respondents communicated with the applicant as regards
the
payments to be made
[11]
with
Asili Risk Management in respect of the outstanding loan amount as
evidenced by the e-mails exchanged between the third Respondent
and
Asili Risk Management. The late payment was made by the first
respondent and accepted by Asili Risk Management on behalf of
the
applicant.
[12]
The emails
referred to do not indicate an acceptance of the offer by the
applicant but a threat of legal action by the applicant
as against
the respondents, whereupon the third respondent responded by putting
the blame on the Department of Human Settlement
for failing to
pay the respondents’ invoices.
[13]
The agreements and respondents’ indebtedness to the applicant
were conceded on their behalf by their counsel during oral
argument
albeit
for an
unknown amount. It was contended on their behalf that should summary
judgment be granted against them, a reasonable possibility
existed
that an injustice might be done and in this regard I was referred to
Jili
v Firstrand Bank.
[13]
[14]
The applicant contended that the respondents placed no evidence
before the court in relation to the other payments that would
have
been made and failed to comply with the requirements of Rule 32 to
establish a defence capable of resisting summary judgment.
The
parties had agreed that the agreements entered into constituted the
whole agreement and that no indulgence granted by the applicant
would
prejudice the applicant’s rights as contained in the agreement.
The respondents’ resistance of the summary judgment
was solely
for the purposes of delay. I agree with this submission. A defendant
in summary judgment proceedings
“
cannot
sit back supinely and justifiably say: I don’t know whether I
owe you any money. I might, I might not, but don’t
give summary
judgment against me because when it comes to trial I might be able to
find in the documents that you provide some
basis for saying that I
don’t owe you any money anyway. That is not good enough if one
has to demonstrate bona fides as the
rule requires, nor is it good
enough if one has to set out one’s defence fully by way of
facts as opposed to speculative
propositions
[14]
.”
[15]
In Jili,
supra,
it was
stated that the precaution for the court to exercise a discretion
against granting an order for summary judgment, applied
in situations
where the court is not persuaded that the plaintiff has an
unanswerable case.
[15]
The
discretion should also not be exercised against a plaintiff on the
basis of mere conjecture or speculation. The consequences
of refusing
summary judgment in this case are speculative.
[16]
Having regard to the nature, grounds and facts whereupon the
respondent’s defence is founded, I am not persuaded that
a
bona
fide
defence
has been disclosed. I am therefore of the view that the application
for summary judgment, in the reduced amount as prayed
for, must
succeed.
[17] The following order
is therefore made:
Order
1.
Summary
judgment in the minus petitio amount of R2 140 720.01 is granted with
costs on a scale as between attorney and client.
________________
MHLAMBI,
J
Counsel
for Applicant:
Adv. JS
Rautenbach
Instructed
by:
Nandi Bulabula Inc.
C/o Matsepes Inc.
26/28 Aliwal Street
BLOEMFONTEIN
Counsel
for Respondents:
Adv. JL Oliver
Instructed
by:
Peyper Attorneys
200 Nelson Mandela Avenue
BLOEMFONTIEN
S.Radigomo
[1]
Shackleton
Credit Management (Pty) Ltd v Microzone Trading 88 CC and Another
2010 (5) SA 112
(KZP) paras 5, 24-26
[2]
Shackleton,
supra para 11
[3]
Paras
3.5 & 3.6 of respondents’ heads of argument
[4]
2014
(4) SA 220 (SCA)
[5]
Rees,
supra, paras B-C p. 226 Barclays v Love
1975 (2) SA 514
at 516
H-517A
[6]
A260/2015)
[2016]
ZAFSHC 159
(8 September 2016) at para 43
[7]
Maharaj
v Barclays National Bank LTD
1976 (1) SA 418
A
[8]
Maharaj,
supra, paras E-F p. 423
[9]
Cape Sheet Metal
Workers (Pty) LTD v JJ Calitz Builder (Pty) LTD
1981 (1) SA 697
(O)
at 699 A-C; Bank van die Oranje-Vrystaat BPK v OVS Kleiwerke (Edms)
BPK
1976 (3) SA 804
at 807 B-C.
[10]
Para
9.2: Opposing affidavit
[11]
Para
10.1: Opposing affidavit
[12]
Para
10.3: Opposing affidavit
[13]
2015
(3) SA 586
[14]
Nedperm
Bank Ltd v Verbri Projects CC
1993 (3) SA 214
at 223 B-C (W);
Jacobsen v.d. Berg S.A. Ltd v Triton Yachting
Supplies 1974 (2) 584 (O) at 587 E-F.
[15]
Jili,
supra, paras A-B on p 591
.