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[2017] ZAFSHC 190
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Nedbank Limited v De Wet du Plessis N.O. and Others (2182/2017) [2017] ZAFSHC 190 (19 October 2017)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case
number: 2182/2017
In
the matter between:
NEDBANK
LIMITED
Plaintiff
and
DANIEL
DE WET DU PLESSIS
N.O.
1
st
Defendant
DANIEL
DE WET DU
PLESSIS
2
nd
Defendant
JAN
FREDERIK
TAUTE
DU
PLESSIS
3
rd
Defendant
HEARD
ON:
03 AUGUST 2017
JUDGMENT
BY:
PIKE, AJ
DELIVERED
ON:
19 OCTOBER
2017
[1]
This is an opposed application for summary judgment. The plaintiff
instituted action against the three defendants herein by
way of
combined summons, seeking relief against the defendants jointly and
severally, in the following terms:
“
1
Payment of the amount of R361 517 .12;
2.
Interest on the aforesaid amount of 21% per annum, compounded dally
and capitalised monthly
from 25/01/2017 to date of final payment
(both days inclusive);
3.
An order declaring the following Immovable property executable for
the
said
sum, plus interest and costs: THE
FARM GRASVELD 1128
DISTRICT
BRANDFORT
PROVINCE
FREE STATE PROVINCE (sic)
IN
EXTENT 128,4798 (ONE HUNDRED AND TWENTY EIGHT, COMMA FOUR SEVEN NINE
EIGHT) HECTARES
HELD
BY DEED OF TRANSFER 18260/1977
4.
Attorney and client costs as provided for in the agreements of loan
and bond;
5.
Further and/or alternative relief.”
[2]
After the defendants gave notice of their intention to defend this
matter, the plaintiff instituted application for summary
judgment
against all three defendants for the relief set out in the
particulars of claim.
[3]
On 20 May 2011 the plaintiff and the first defendant, Daniel De Wet
Du Plessis NO, in his capacity as only trustee of the Baruk
Business
Trust IT224/2009, entered into an overdraft facility agreement.
Thereafter a renewal of the aforesaid agreement was concluded
between
the parties. In paragraph 6 of the particulars of claim it is averred
that the renewal agreement was signed on 4 October
2017. However, I
accept the date on which the said agreement was concluded to be 4
October 2013, as the copy of the relevant agreement
was annexed as
Annexure A2 to the particulars of claim, which indicates
the date of signature as 4 October
2013. The date of 2017
was therefore clearly a typing error.
[4]
As security for the payment of the first defendant's obligations to
the plaintiff in terms of the aforesaid facility agreement
the third
defendant consented to the registration of a first covering mortgage
bond in the sum of R450 000 and an additional
amount of R113 000 over the abovementioned immovable property.
The said bond was subsequently registered in favour of the
plaintiff
at the registrar of deeds, Bloemfontein, on 25 July 2011 under
mortgage bond number 84695/2011.
[5]
The second and third defendants bound themselves jointly and
severally, as surety and co-principle debtors
in solidum
for
the repayment on demand of all or any sum or sums of money which the
first defendant may from time to time owe or be indebted
to the
plaintiff. The second and third defendants renounced the benefits of
excussion and division. The second defendant bound
himself as
aforesaid on 20 April 2011 and again on 3 November 2011. The third
defendant bound himself as aforesaid on 20 April
2011 and again on 17
November 2011.
[6]
The plaintiff's cause of action is based upon the written renewed
overdraft facility agreement, which contains the following
material
terms and conditions:
6.1
In the event of any breach by the first defendant, the plaintiff will
be entitled to claim
immediate repayment of all amounts owing under
the agreement, together with interest thereon.
6.2
A certificate signed by a manager of the plaintiff, whose capacity or
authority will not be necessary
to prove, which will, upon the mere
production thereof, be binding and be
prima facie
proof of the
contents of such certificate and of the fact that such amount and
interest is due and payable in any legal proceedings
and will be
valid as a liquid document.
6.3
No amendment, alteration, addition, variation or consensual
cancellation will be of any
force or effect, unless reduced to
writing and signed by the parties.
6.4
No waiver of any of the terms and conditions of the agreement will be
binding or effectual
for any purpose, unless expressed in writing and
signed by the said party.
[7]
The plaintiff alleges in its particulars of claim that the defendants
did not make prompt payments on the due dates, are therefore
in
arrears and due notices were given to all the defendants at their
chosen domicile addresses. The defendants persevered in not
paying
any of the outstanding amounts, therefore the full amount outstanding
became due and payable, which amount plaintiff derived
from the
certificate of balance.
[8]
The second and third defendants' liability emerge from the fact that
they bound themselves as co-sureties and the third defendant
consented to the registration of a first covering mortgage bond, as
mentioned above, hence the prayer to declare the immovable
property
specially executable.
[9]
The second defendant filed an opposing affidavit on behalf
of all three defendants and raised the following
defence:
Due
to the drought the defendants were not able to service the loan
account. On 29 September 2016 the second defendant received
a
phone call from Andile Mlozana from the plaintiffs head office in
Bloemfontein requesting a meeting as the defendants had missed
some
payments. On 3 October 2016 a meeting was held at the offices of the
plaintiff in Bloemfontein. At the meeting the second
defendant
represented the trust, himself and the third defendant, and the
plaintiff was represented by Andile Mlozana as well as
Arnold Du
Toit. At this meeting the second defendant advised the plaintiff that
he had acquired property in Vista Park and was
in the process of
selling same, whereafter he would settle the amount owing to the
plaintiff. Mr du Toit responded by stating that
the plaintiff was not
in the business of ruining emerging farmers and was therefore
prepared to grant an indulgence regarding the
payment of the debt on
condition that the proceeds of the aforesaid sale would be used to
repay the amount owing to the plaintiff.
A verbal agreement was
consequently concluded in terms of which the defendants were granted
an extension on all payments until
the said property situated in
Vista Park was sold, which extension included all arrears as well as
the full capital amount outstanding.
According to the defendants a
binding and valid agreement, which constitutes a complete defence to
the plaintiff's claims, exists
between the parties.
[10]
The defendants aver that the summons is consequently contrary to the
verbal agreement, and therefore is not only premature,
but also
unconscionable and/or immoral and against public policy.
[11]
Additional to the defendants' above stated defence it is further the
defendants' case that the summons is defective or open
to exception
or that the summary judgment application is defective. The defendants
also aver that the requisite notices in terms
of the provisions of
the National Credit Act had not been addressed to the first defendant
at his chosen
domicilium citandi
et
executandi
address.
I will return to these aspects.
[12]
According to Rule 32(3)(b) of the Uniform Rules of Court a defendant
may satisfy the court by affidavit that he has a
bona
fide
defence to the action. Such affidavit shall disclose fully the
nature and grounds of the defence and the material facts relied upon
therefor. 'Satisfy' does not mean 'prove'. What the rule requires is
that the defendant sets out in his affidavit facts which,
if proved
at the trial, will constitute an answer to the plaintiffs claim. (See
Breytenbach
vs
Fiat
SA
(Edms) Bpk
1976(2)
SA 226 (T)).
[13]
The leading case in this regard is
Maharai v Barclays
National Bank
1976 (1) SA 418
(A) at 426C where
Corbett JA (as he
then was) determined the
ambit
of
the
rule of disclosure as
it
applies to the
remedy
of
summary
judgment,
in the
following
terms:
"The
word "fully", as used in the context of the Rule (and its
predecessors), has been the cause of some judicial
controversy in the
past. It connotes, in my view, that, while the defendant need not
deal exhaustively with the facts and the evidence
relied upon to
substantiate them, he must at least disclose his defence and the
material facts upon which it is based with sufficient
particularity
and completeness to enable the Court to decide whether the affidavit
discloses a
bona fide
defence."
[14]
In order to counter the above principle the plaintiff needs to proof
that he has an unanswerable case. If there is a
possibility that the
defendants have a valid defence, leave to defend should be granted.
(See
Maharai vs Barclays National Bank Bpk,
supra
at 425 H.) In
Soil Fumigation Services Lowveld CC vs
Chemfit Technical Products (Pty) Ltd
2004(6) SA 29
(SCA) at 35 B - C the court found as
follows:
"With
regard to the court's overriding discretion to refuse summary
judgment even where the defendant's affidavit does not
measure up to
the requirements of rule 32(3)(b), it has been said that, in view of
the extraordinary and stringent nature of the
summary judgment
remedy, that discretion may be exercised in the defendant's favour if
there is doubt as to whether the plaintiffs
case is unanswerable and
there is a reasonable possibility that the defendant's defence is
good."
[15]
I agree with the approach as set out by Howard, J in
Bonnet
en
andere vs Snaar Dorpsontwikkelaars (Edms) Bpk
en
andere
1978(4) SA 212 (D) op 217 C - E
regarding the approach to be followed when a real difficulty as to a
matter of law arises:
"Die
advokate is diteens dat diehof nie verplig is om moeillke regsvrae in
sulke verrigUnge (summiere vonnis verrigtinge) op
te los nle. Volgens
gevestlgde praktyk word summiere vonnls slegs toegestaan lndlen al
die geopperde verwere klaarblyklik onaanvaarbaar
is. Anders gestel,
om 'n aansoek om summiere vonnfs met welslae te bestry, opregsgronde
of andersins, Isdltslags nodig om 'n beregbare
en beredeneerbare
verweer ('a fairly triable and arguable Issue') op te werp ..."
[16]
Mr Zletsman, on behalf of the plaintiff, both in his heads of
argument and supplementary heads of argument, submitted that
the
defendants' defence is in defiance of the so called Shifren
principle. (See
SA
Sentrale
Ko-op
Graan
Maatskappy Beperk v Shifren
1964
(4)
SA 760
(A).
[17]
Mr Tsangarakis, on behalf of the defendants, in his heads of argument
and during oral argument, contended that the defendants'
defence Is
effectively one of
exceptio dolis
generalis,
which
means that a defence is available where the plaintiff did not act in
good faith. Although the
exceptio dolis generalis
was rejected
as a defence in
Bank
of
Lisbon
and
South
Africa
Ltd
vs
De
Ornelas
and
another
1988(3) SA 580 (A), he submitted that it derived from a
pre-constitutional era. He contended that the provisions of section
39(2)
of the Constitution, 108 of 1996, obliges the courts to develop
the common law, in appropriate circumstances, to promote the spirit,
purport and objects of the Bill of Rights.
[18]
Mr Tsangarakis also referred me to the judgment In
Crown
Restaurant
CC
vs
Gold
Reef
City
Theme
Park
(Pty)
Ltd
2008(4) SA 16 (CC) at 18 G tot 19 C:
"[3]
The applicant applied unsuccessfully to the Supreme Court of Appeal
for leave to appeal the judgment of the High Court.
Hence, the
present application in which, for the first time, the applicant seeks
to have the
ecxeptio delis generalis
reintroduced as a
defence, contending that this equitable remedy is In line with
constitutional values. ...
[4]
Msimeki AJ was called upon to deal only with the waiver defence and
did so. He was not invited to develop the common
law of contract to
promote the spirit, purport and objects of the Bill of Rights, nor to
address any of the other constitutional
issues now raised by the
applicant. On the limited basis on which the case was presented to
him, the learned judge arrived at the
correct conclusion.
[5]
This court has stated repeatedly that it is generally undesirable for
it to stt as a court of first and last instance.
...
[6]
In respect of the development of the common law of contract, the High
Court and the Supreme Court of Appeal have a vital role
to play. ..."
[19]
Mr Tsangarakis pointed out that although the constitutional court
failed to come to the assistance of the applicant in the above
matter, it merely held that the defence of an
exception dolis
generalis
should rather have been proffered in the court a
quo.
[20]
Mr Tsangarakis furthermore submitted that the defendants do not
rely exclusively on the defence of
exceptio dolis generalis,
in
that additional thereto. they also raise the following defence as set
out in
Juglal NO and another vs Shoprite Checkers (Pty) Ltd
t/a
OK
Franchise Division
2004(5)
SA 248
(SCA) at
258
D - F where the court
held
as
follows:
"Because
the courts will conclude that contractual provisions are contrary to
public policy only when that is their clear effect
(see
the
authority cited in
Sasfin (Pty)
Ltd
vs
Beukes
1989
(1)
SA
1
(A)
at
8
C to
9 G) it follows that the tenancy of a proposed transaction
towards such a conflict can only be found to exist if there Is a
probability
that unconscionable, immoral or Illegal conduct will
result from the Implementation of the provisions according to their
tenor.
(It may be that the cumulative effect of implementation of
provisions not individually objectionable may disclose such a
tendency.)
If, however, a contractual provision is capable of
Implementation in a manner that is against public policy but the
tenor of the
provision is neutral then the offending tendency Is
absent. In such event the creditor who Implements the contract In a
manner
which Is unconscionable, Illegal or Immoral will find that the
court refuses to give effect to his conduct but the contract itself
will stand:
[21]
The Supreme Court of Appeal, already in
Brisley
vs
Drotsky
2002 (4) SA 1 (SCA) at 18 C- D, to a large
degree, recognised the above principle:
“
Aangeslen
die verskanslngsklousule opslgself nle ongeldlg Is nle, vind die
Sasfln beginsel geen direkte toepasslng nie. Op die veronderstelllng
dat die Sasfin-beginsel uitgebrei kan word om die afdwing van
kontraksbepallngs(wat nie
per
se in stryd met die openbare
belang Is nle) le verhoed, sal sodanige toepasslng noodwendig beperk
moat word tot gevalle wal analoog
Is aan Sasfin, synde gevalle waar
die afdwinging van die verskansingsklousule so onbilllk saf wees dat
dit as 'inimical to the
Interests of the community' beskryf kan
word.”
[22]
This principle has also been discussed and applied in the full bench
judgment in
Nvandenl Local Municipality vs Hlazo
2010(4) SA 261 (ECM) as follows:
"[63]
The result that the municipality, on the facts of this case, may not
rely on
bona fides
to escape the entrenchment clause,
does not, however, put an end to mr. Bothma's submission that if its
operation on the facts of
this case nevertheless offends public
policy, then clause 14may not be enforced.
Bona
fides
may
not be the peg on which to hang public policy,
but there may be another valid rule of law protected by public
interest which may
legally justify a departure from the Shifren
principle, and it is to this issue that I now tum my attention...
[83]
In the present case it is not suggested, nor can it be said, that the
infringement clause Is
per
se contrary to public policy. The
municipality's case is that its operation, on the facts of this case,
offends public policy. In
such a case the test is to determine public
policy at the time the court is asked to enforce the term, having
regard to the prevailing
circumstances and the effect of the order at
that time…
[89]
If the operation of the clause in the prevailing circumstances and on
the facts of the case, at the time the court is asked
to enforce the
clause, is so manifestly unreasonable that it offends public policy,
then it is voidable on the grounds of unfairness.
This involves, as
Moseneke OCJ (in
Barkhulzen vs Napier
2007 (5)
SA 323) observed, an objective assessment of its impact on the
parties, and does not involve the court's own
views of the matter, or
that of the parties…
[126]
...I therefore believe that the facts and circumstances of this case
justify the departure from the Shifren principle”
[23]
Upon application of the principles dealt with above, I am satisfied
that the defendants have a
bona
fide
defence
to the action.
[24]
In view of my finding on the merits of the defendants' defence, I
deem it unnecessary to deal with the other defences referred
to in
paragraph [12] supra.
[25]
Regarding costs there is no reason why the usual order pertaining to
costs in an unsuccessful application for summary judgment
should not
be granted in this matter.
[26]
I, accordingly, make the following order:
1.
The application for summary judgment is dismissed;
2.
The defendants are granted leave to defend the action;
3.
Costs of the application are costs in the main action.
____________________
EA
PIKE, AJ
On
behalf of plaintiff:
Adv PJJ Zietsman
Instructed
by:
Hill McHardy & Herbst
Bloemfontein
On
behalf of defendants: Adv S Tsangarakls
Instructed
by:
C/o
Blair Attorneys
Bloemfontein