Farmsecure v Strauss (4994/2013) [2014] ZAFSHC 56 (25 April 2014)

45 Reportability
Commercial Law

Brief Summary

Execution — Notarial bond — Application for judgment based on certificate of indebtedness — Applicant sought payment of R 272,120.20 and perfection of notarial bond — Respondent disputed validity of certificate, claiming it was invalid under contra bonos mores — Court held that the applicant failed to prove indebtedness as the only evidence was an invalid certificate — Application dismissed with costs.

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[2014] ZAFSHC 56
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Farmsecure v Strauss (4994/2013) [2014] ZAFSHC 56 (25 April 2014)

IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
CASE
NO. : 4994/2013
In
the application between:-
FARMSECURE
Applicant
and
ERNST
HENDRIK
STRAUSS
Respondent
JUDGMENT
BY:
MOLOI, J
HEARD
ON:
17 APRIL 2014
DELIVERED
ON:
2
5
APRIL 2014
[1] In this application
the applicant sought judgment for payment of an amount of R
272,120.20 together with interest
a tempore morae
from date of
judgment and perfection of a notarial covering bond to enable it to
take possession of the respondent’s moveable
goods as security
for payment together with ancillary relief as set out in the notice
of motion.  The respondent opposed the
granting of the relief
sought.
[2] It is common cause
between the parties that on 4 November 2010 the respondent gave to
the applicant a ‘Special and General
notarial bond’ a
copy of which was attached to the founding affidavit as well as an
acknowledgment of debt.  The applicant,
in addition, attached to
the founding affidavit a certificate of balance outstanding as
provided for in the notarial covering bond
referred to above.
It was also common cause that the applicant complied with
section 129
of the
National Credit Act No. 34 of 2005
.
[3] The terms of the
notarial covering bond were fully set out in the founding affidavit
and the following appeared to be in dispute
from the respondent’s
answering affidavit:  firstly, the authority of the deponent of
the founding affidavit with whom
the respondent never had dealings
much as he was the applicant’s commercial attorney and had
insight into the applicant’s
accounts and satisfied himself of
the facts deposed to; he also had an intimate knowledge of the
applicant’s business activities.
It must be stated that this
question was not argued during the hearing and can be regarded as
admitted.  Secondly the applicant
had changed its name a number
of times and thus the legal personality was put to question. This
point was also not pursued as the
certificates of incorporation
attached proved the corporate identity of the applicant
satisfactorily.
[4] The real argument
advanced by the respondent was that the goods sought to be attached
by the applicant had the value of approximately
R 800 000.00 and
it would consequently be unjustified that those goods be attached for
an alleged debt of only R 272,120.20.
In argument Mr de Wet, on
behalf of the respondent, referred to the decision of Wright, J in
the matter of
Standard Bank van Suid-Afrika Bpk v Calitz
delivered on 13 April 2000 (unreported) in Application No. 575/2000.
In paragraph 6 thereof Wright, J said:
“ ‘
n
Wesenlike aspek wat onmiddellik vermelding verdien, is die feit dat
regshulp van drakoniese aard, naamlik beslaglegging van
al
die
roerende bates van respondent, aangevra is…” and
conitinues at paragraph 11 as follows:  “Andersins
kan dit
tot gevolg hê dat die verbandgewer se hele boerdery of
besigheid tot in einde gebring word vir die beveiliging van
slegs ‘n
geringe skuld.”
In my view the court
shall have failed to deliver justice if such a draconian order is
made in the circumstances of this case.
The court has, however,
a discretion to order partial perfection of the notarial covering
bond to secure the amount owing, if proven:
See
Barclays
National Bank Ltd and Another v Natal Fire Extinguishers
Manufacturing Co. (Pty) Ltd
and Others
,
1982
(4) SA 650
(D) at 654-655 and
International Shipping Co (Pty)
Ltd v Affinity (Pty) Ltd and Another
,
1983 (1) SA 79
(C) at
84.
[5] Mr. de Wet argued
further that for the applicant to succeed and get a judgment for the
amount of R 272,120.20 claimed as balance
outstanding, it must prove
that the amount is owing and that the amount is due and payable.
The same would be required for
the perfection of the notarial
covering bond.  As the application sought is a final relief it
was a pre-requisite that the
applicant prove a “clear right”
which must be proved clearly on the balance of probability:
Welkom Bottling Co (Pty) Ltd v Becfast Mineral Waters (OVS)
(Pty) Ltd
,
1967 (3) SA 45
(O) at 56.  See also
Tavern
Drankwinkel (Edms) Bpk v Munisipaliteit van Stellenbosch
,
1985 (4) SA 892
(C) at 901 A-B.  In this case the applicant
relied on a certificate of indebtedness to prove the respondent’s
liability
to him based on the provisions of Clause 12 of the notarial
bond which provides as follows:

12.
‘n Sertifikaat deur die verbandhouer of enige bestuurder,
sekretaris,rekenmeester of ander behoorlik
gevolmagtigde beampte of
agent van die verbandhouer onderteken, is afdoende bewys vir
doeleindes van voorlopige of summiere vonnis
of enige ander
regsmiddel van
12.1    enige
bedrag aan finansieringskoste in verrekening gebring asook die
finansieringskoste koers soos van tyd tot
tyd deur die verbandhouer
vasgestel, en
12.2    die
bedrag onder hierdie verband verskuldig.”
[6] In
Ex parte
Minister of Justice in re Nedbank Ltd v Abstein Distributors (Pty)
Ltd & Others and Donelly v Barclays National Bank
Ltd
,
1995 (3) SA 1
(AD) at 22 C-D the Appeal Court held as follows:

A conclusive proof
clause (it is a clause providing for a certificate of balance to
constitute proof of indebtedness) in favour
of the creditor in an
agreement in terms whereof the creditor is to be the author of the
certificate of balance issued under such
clause is
contra bonos
mores
and therefore void, regardless of the contents of the
agreement in which it finds itself.”
The applicant sought
judgment against the respondent by way of application.  The only
basis for proving his claim was the certificate
of indebtedness.
Such certificate, as shown above, is invalid and cannot substantiate
the claim.  The claim, consequently,
remains unproved.
There is no onus on the respondent to rebut the claim.  There
should have been proof, at least
prima facie,
for the
respondent to be called upon to say something.  The applicant
cannot, therefore, expect that judgment be given in
his favour.
The same goes for the perfection of the notarial bond.  Such
perfection can only be granted if the indebtedness
of the respondent
was proven.  The applicant chose to approach the court by way of
application as against the issue of summons
where he would be allowed
to adduce even evidence
viva voce
to prove his claim.
The applicant made its bed and must lie in it.
[7] As a result the
following orders are made:
(a)  The application
is dismissed;
(b)  The applicant
is ordered to pay the costs;
____________
K.
J MOLOI , J
On
behalf of the applicant:

Adv.  JG GILLILAND
Instructed
by:
LOVIUS
BLOCK
BLOEMFONTEIN
On
behalf of the first respondent:
Adv. PJT DE WET
Instructed
by:
SYMINGTON
& DE KOK
BLOEMFONTEIN