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[2016] ZAFSHC 117
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Transnet Soc Ltd t/a Transnet Property v Defensor Electronic Security Systems (Pty) Limited and Another (6023/2015) [2016] ZAFSHC 117 (21 June 2016)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE STATE DIVISION,
BLOEMFONTEIN
Case
number: 6023/2015
In
the matter between:
TRANSNET
SOC LTD t/a TRANSNET PROPERTY
Plaintiff
(Registration
No. 1990/000900/06)
and
DEFENSOR
ELECTRONIC SECURITY SYSTEMS
(PTY)
LMITED
1st Defendant
GERT
RENIER VAN ROOYEN
2nd Defendant
HEARD
ON:
5 MAY 2016
JUDGMENT
BY:
RAMPAI,
J
DELIVERED
ON:
21
JULY 2016
[1]
These were action proceedings. The plaintiff instituted an
action against the defendant. The relief sought was payment
of
the capital claim of R711 417.93, interest thereon together with
costs. The defendant filed notice of intention to
defend the
action. The notice triggered off the current summary judgment
application.
[2]
The fulcrum of the plaintiff’s action was a lease agreement the
parties conclude in Bloemfontein on 14 June 2014.
The nub of
the defendant’s defence may be condensed as follows:
2.1 The original
lease agreement was cancelled by the plaintiff on account of the
defendant’s breach;
2.2 The first
defendant and the plaintiff then entered into a subsequent lease
agreement which settled the dispute;
2.3 The same
dispute which has already been mutually settled was wrongly
rescucitated by the plaintiff as the subject matter
of the present
claim;
2.4 The second
defendant was released from the bonds of suretyship when the
aforesaid compromise was reached;
2.5 It was entirely
unclear whether and to what extent the plaintiff relied on the
limited R25 000 acknowledgment of
debt, signed by the second
defendant, as its cause of action.
2.6
The aforesaid uncertainty rendered the plaintiff’s particulars
of claim vague and embrassing.
[3]
The plaintiff contended that those defences did not constitute bona
defences. Consequently the plaintiffs applied for
summary
judgment against the defendant.
[4]
An overview of the legal principles that govern the remedy
termed summary judgment became necessary. Uniform Rule
32(3)(b)
requires a defendant confronted with a summary judgment application,
to file an opposing affidavit which fully discloses
the nature and
grounds of defence as well as the material facts on which such a
defence is based.
[5]
A defendant must go beyond the mere formulation of the dispute.
It is incumbent upon a defendant to fully disclose the
real grounds
upon which he disputes a claim. Material facts underlying a
dispute must be raised –
Chairperson,
Independent Electoral Commission v Die Krans Ontspanningsoord (Edms)
Beperk
1997 (1) SA 244
(T) at 249-F-G.
[6] A defendant must
merely depose to facts which, if accepted as the truth or which if
proved at the trial by admissible evidence
– will disclose a
defence –
Shepstone v Shepstone
1974 (2) SA 462
(N).
Sumelar Ontwikkelings (Pty) Ltd v HTF Developers
(Pty) Ltd
2008 (6) SA 650
(T) at 653 A.
In
certain circumstances a defendant is not required to fully disclose
the facts on which its defence is founded. One such
example is
a defence of novation.
Barclays
National Bank v Smith
1975 (4) SA 675
(D).
[7]
At this juncture a defendant is not enjoined to prove its defence on
the usual civil standard of proof on a preponderance of
probabilities. Moreover, in summary judgment proceedings unlike
in provisional sentence proceedings, a defendant’s
opposing
affidavit is not subjected to stringent scrutiny by a court.
Kings
Distributors v Raath Motors (Pty) Ltd
1972 (1) PH at F18
.
[8]
It has been held that summary judgment proceedings were not and had
never been designed to be used as a forum for the resolution
of
factual disputes -
Fashion
Centre v Jasat
1960 (3) SA 221
(N) at 222E.
[9]
A court may refuse summary judgment even though it might reckon that
the defence would probably fail at the trial.
Eisenberg’s
v OFS Textiles Distributors (Pty) Ltd
1949 (3) SA 1047
(O) at 1055. All that is required of a
defendant in this type of proceedings is that its opposing affidavit
must at least
disclose sufficient particularity to enable a court to
determine whether it discloses a
bona
fide
defence.
Maharaj
v Barclays National Bank Ltd
1976 (1) SA 418
(A) at 426 C-D.
[10]
The question in the instant summary judgment proceedings is whether
the facts as alleged by the defendant(s) in the opposing
affidavit
disclose a
bona
fide
defence.
[11]
Mr Motloung, counsel for the plaintiff, submitted that the answer to
the question must be negative. Therefore, counsel
urged me to
find in favour of the plaintiff that the defendant failed to disclose
a
bona
fide
defence.
[12]
Mr Van Aswegen, counsel for the defendants, disagreed. Contrary
to the submissions made by his counterpart, counsel submitted
that
the question must be answered in the affirmative.
[13]
In the first place I deal with the first defendant. The first
defendant primarily raised a defence termed compromise.
A
compromise is a substantive contract which exists independently of
the cause that gave rise to its very existence. In the
absence
of a reservation of the right to proceed on the original cause of
action, a compromise agreement bars any future proceedings
based on
the original cause.
[14]
It has been authoritatively held that almost all agreements can be
analysed in terms of an offer and an acceptance.
“…
every
contract consists of an offer made by one party and accepted by the
other.”
Solomon
J. See
Watermay
v Murray
1911 AD 61
on 70 where the statement was quoted with approval.
[15]
In the instant matter, the plaintiff certainly accepted the first
defendant’s proposals for the settlement of the original
dispute. In its letter dated 25 June 2015 the plaintiff stated,
among others, the acknowledgement of debt would confirm the
terms of
the first defendant’s settlement agreement. The first
defendant’s offer or settlement proposals were
embodied in “anx
grr2”. The plaintiff’s acceptance of those
proposals was embodied in “anx grr1”.
The R25 000
amount of the acknowledgement of debt could not be reconciled with
the amount of the claim, R711 417-93.
[16]
It often happens, during the course of the negotiations leading to
the formation of a contract or in the formal contract itself,
that
mention is made of a written document or that mentions is made of
having the terms of the contract reduced to writing.
In such
circumstance a question often and immediately raised is whether or
not the informal contract is binding or whether the
written document
mentioned was only intended to prove the terms of the contract or
whether it was contemplated that no binding
contract would come into
existence until a written document has been drawn up and executed.
[17]
The salient principle of our law is that the burden of proof rest on
the party who asserts that an informal contract, in other
words an
unwritten contract, was not intended to be binding until reduced to
writing and signed. In
Goldblatt
v Fremantle
1920 AD 123
on 128-9 the court said:
“
Subject
to certain exceptions, mostly statutory, any contract may be verbally
entered into. Writing is not essential to contractual
validity.
And if during negotiations mention is made of a written document, the
Court will assume that the object was merely to
afford facility of
proof of the verbal agreement, unless it is clear that the parties
intended that the writing should embody the
contract.”
[18]
It
was the case of the first defendants that the first defendant and the
plaintiff concluded an informal contract on 25 June 2015
and that the
aforesaid two annexures were merely written and designed to
facilitate proof of their unwritten agreement. I
could find
nothing in those annexures that suggested that the parties intended
to conclude a formal or written agreement in order
to embody their
contract. -
Goldblatt,
supra
.
It was never the case of the plaintiff that apart from the written
offer and the written acceptance, the parties had intended
that no
valid settlement would be binding unless it was embodied in a written
form and signed. The plaintiff asserted that
no valid and new
lease agreement came into existence because no written contract was
ever signed. In view of such assertion,
the burden of proof
rested on the plaintiff to prove that written contract was intended –
Goldblatt
supra
.
That the plaintiff failed to do.
[19]
In the second place, I deal with the second defendant’s
defence. He was sued on the strength of suretyship agreement.
Suretyship is an accessory contract. Consequently an extinction
of the primary debtor’s principal obligation necessarily
extinguishes the surety’s subsidiary obligation - Caney:
The Law of Suretyship, second edition, on p197.
I have earlier
found that a compromise was reached between the first defendant and
the plaintiff. On the premise that a compromise
agreement was
concluded, the plaintiff was precluded from proceeding against the
first defendant by virtue of the original cause.
[20]
It was axiomatic, therefore, that the second defendant, as a surety,
could also not be held liable by the plaintiff, as the
creditor of
the principal debtor, on the strength of the very same original
cause. The plaintiff’s way to the second
defendant was
longa
via
the first defendant. There was no direct avenue open to the
plaintiff. The liability of the second defendant was accessory
to that of the first defendant. Seeing that the plaintiff had
reached a
cul
de sac
,
there was no alternative avenue through which the second defendant
could be reached. A compromise of a disputed main claim
may
necessarily bring about the release of a surety. -
Caney,
supra
,
on p202
.
[21]
The acknowledgement of debt, “anx e” has compounded the
uncertainty concerning the plaintiff’s claim.
The
document left much to be desired. For instance
ex
facie
the document, the second defendant acknowledged that he was indebted
to the plaintiff in the capital amount of R25 000.
But
then he undertook to liquidate the same debt at the rate of R25 000
per month from a specified date. That was one
absurdity.
The other was that nowhere in the entire document was the name of the
first defendant, as the principal debtor,
mentioned. There was
absolutely no hint of any association between the second and the
first defendant. Lastly, the
second defendant did not reside on
the leased premises as a tenant of the plaintiff. However, the
acknowledged capital debt
was described as rental arrears. The
document was not a model of good draftsmanship. It was totally
lamentable and
at odds with the plaintiff’s reconciliation
statement pertaining to the first defendant’s account. On
1 July
2013, shortly before the second defendant signed the
acknowledgment of debt, the first defendant was alleged to be
R304 239.72
in rental arrears. Given all those anomalies,
the critique that the plaintiff’s particulars were riddled with
vague
and embarrassing features was not far-fetched. The
corollary of all this was that the defendants found it difficult to
accurately
indicate or spell out their substantive defence(s) to the
substantive merits of the plaintiff’s claim.
[22]
I am of the view that a cloud of uncertainty which hangs over the
plaintiff’s cause of action by itself constitutes a
sound
reason for exercising my discretion in favour of the defendants.
I am persuaded that the defendants have crossed the
minimum
threshold. Since it cannot be said that they had shown no
bona
fide
defence to the plaintiff’s claim, I am inclined to hold that,
in these circumstances, summary judgment should be refused.
If
I were to grant summary judgment in this matter, then my decision
would not have been compatible to proper exercise of judicial
discretion.
[23]
Accordingly I make the following order:
23.1
The application for summary judgment is refused;
23.2
The defendants are granted leave to defend.
23.3
The costs of the summary judgment proceedings shall be costs in
cause.
______________
M.
H. RAMPAI, J
On
behalf of the plaintiff:
Adv. SE Motloung
Instructed
by:
Rossndorf
Reitz Barry
Bloemfontein
On
behalf of the defendants: Adv. WA van Aswegen
Instructed
by:
Peyper
Attorneys
Bloemfontein