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[2009] ZAGPJHC 70
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Mphulwane v Standard Bank of S A (A5028/09) [2009] ZAGPJHC 70 (9 December 2009)
REPUBLIC OF SOUTH AFRICA
SOUTH GAUTENG HIGH COURT, JOHANNESBURG
Reportable
Appeal Case No: A5028/09
High Court Case No: 8121/08
In the
matter between:
LUCAS
LAZARUS MPHULWANE Appellant
and
STANDARD
BANK OF SA Respondent
JUDGMENT
MOKGOATLHENG
J
(1) This is an appeal against a judgment and order by De Wet AJ in
which she granted summary judgment against the appellant in
favour of
the respondent for the repossession of a 2002 Iveco 65 Seater Bus
with Engine Number: 8360465307780040 and Chassis No:
ZCFA1RLJ0023660860.
(2) The factual matrix predicating the summons issued against the
appellant, arises from a breach of an Instalment Sale Agreement
entered into between the parties on the 17 May 2007. In terms
thereof, the appellant purchased from the respondent a certain 2002
Iveco 65 Seater Bus for an amount of R852 619.20.
(3) The respondent alleges that the appellant breached the agreement
in that he failed to make punctual payments in terms thereof
and was
in arrears in the sum of R91 638.47 as at the 12 of February 2008.
The respondent alleges that due to the appellant’s
breach, it
was entitled to terminate the agreement, reclaim repossession of the
vehicle and retain as a penalty, all monies paid
by the appellant.
(4) The appellant filed an appearance to defend the action, whereupon
the respondent instituted an application for summary judgment
against
him. In terms of
Rule 32(3)(b) of the Uniform Rules of Court
the appellant filed an affidavit in which he opposed the summary
judgment application.
(5)
Rule 32(3)(b)
provides:
‘
Upon the hearing of an application for summary judgment the
defendant may—
(a) ……….
(b) satisfy the Court by affidavit (which shall be delivered
before noon on the Court day but one preceding the day on which the
application is to be heard) or with the leave of the Court by oral
evidence of himself or of any other person who can swear positively
to the fact that he has a
bona fide
defence to the
action; such affidavit or defence shall disclose fully the nature and
grounds of the defence and the material facts
relied upon therefor.’
(6) Blieden J in
“
Marsh and Another v Standard
Bank of S.A Ltd
2000 (4) SA 947
at 949
in considering the
applicability of
Rule 32(3)(b)
stated that:
“what the Rule as interpreted by our Courts over the years
requires of a Court in adjudicating applications
for summary judgment
where a defendant has relied on this subrule is that:
(1)
The Rule requires the defendant to set out in his affidavit
sufficient facts which, if proved at the trial, will constitute an
answer
to the plaintiff’s claim
. Breitenbach v Fiat
SA (Edms) Bpk
1976 (2) SA 226
(T); District Bank Ltd v Hoosain and
Others
1984 (4) SA 544
(C).
(2)
At the summary judgment stage of the proceedings it is not for
the Court to decide any balance of probabilities or determine the
likelihood of the deponent’s allegations being true or false.
Maharaj v Barclays National Bank Ltd
1976 (1) SA 418
(A) at
426 where at A-E
the position is succinctly summarized by
Corbett JA (as he then was) as follows:
‘
Where the defence is based upon facts, in the sense that
material facts alleged by the plaintiff in his summons, or combined
summons,
are disputed or new facts are alleged constituting a
defence, the Court does not attempt to decide these issues or
determine whether
or not there is a balance of probabilities in
favour of the one party or the other. All that the Court enquires
into is (a) whether
the defendant has “fully” disclosed
the nature and grounds of his defence and the material facts upon
which it is founded,
and (b) whether on the facts so disclosed the
defendant appears to have, as to either the whole or part of the
claim, a defence
which is both bona fide and good in law. If
satisfied on these matters, the Court must refuse summary judgment,
either wholly or
in part, as the case may be. The word “fully”
as used in the context of the Rules (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…..At he same time the defendant is not expected to
formulate his opposition to the claim with the precision
that would
be required of a plea; nor does the Court examine it by the standards
of pleading.’
(3)
The subrule does not require the defendant to satisfy the
Court that his allegations are believed by him to be true. It is
sufficient
if the defendant’s affidavit shows that there is a
reasonable possibility that the defence he advances may succeed on
trial.
Shepstone v Shepstone
1974 (2) SA 462
(N) at 467A.
(4)
The Court must be apprised of the facts upon which the
defendant relies with sufficient particularity and completeness so as
to
be able to hold that if these statements of fact are found at the
trial to be correct, judgment should be given for the defendant.
(5) Summary judgment is an extraordinary and stringent remedy and
it is always necessary to keep this in mind when exercising a
discretion whether to grant or refuse it
. Arend and Another
v Astra Furnishers (Pty) Ltd
1974 (1) SA 298
(C) at 305.
(6) A Court must be careful to guard against injustice to the
defendant who is called upon at short notice and without the benefit
of further particulars, discovery or cross-examination to satisfy it
that he has a bona fide defence
.
Breitenbach v Fiat (supra
at 227D-H).”
(7) In resisting the summary judgment application the appellant
raised a variety of defences, amongst which is the allegation of
fraudulent misrepresentation couched as follows:
“In terms
of the Instalment Sale Agreement I purchased a brand new 2007 Iveco
Bus with engine Number 8360465307780040 and
chassis number
ZCFA1RLJ0022360860…….confirmed by the Instalment Sale
Agreement annexed to plaintiff’s summons
in which it is
recorded the year of first registration is 2007.”
(8) The appellant contended further that:
(a)
“
The vehicle described in the application for
summary judgment as described by the respondent is not the vehicle
described in the
Instalment Sale Agreement……….
Further
that “
Contrary to the agreement concluded with plaintiff, I
later discovered that the vehicle in question was a 2002 vehicle and
not a
2007 as claimed by the plaintiff. I verily believe that I have
been made a victim of a fraud at the behest of the plaintiff’s
agent. Had I known that the vehicle was a 2002 model and
reconstructed I would not have bought it”.
(b)
“I tendered return to the plaintiff of the vehicle
against repayment of my deposit that I paid in the sum of R150
000.00….I
am entitled to restitution of the purchase price I
paid against the return of the bus. I have a debtor/creditor lien
which entitles
me to retain the vehicle until I have been reimbursed
with the purchase price I paid. My lien is enforceable against the
plaintiff
and I am entitled to retain the vehicle in my possession
until I am paid.”
(9) In a supplementary affidavit to deal more fully with his defence
that he paid the respondent an amount of R150 000.00 which
entitled
him to retain possession of the vehicle based on a creditor/debtor
lien pending restitution of the deposit he paid, the
appellant
alleged: “
On or about the 17 May 2007 I paid the amount of
R150 000.00 to a certain John who is employed by Italian Commercial
Truck Service
Centre (Pty) Ltd trading as ‘Italian Commercial’.
John reassured me that the sum of R150 000.00 would be credited
towards
the purchase price of the vehicle…..because the
respondent insisted that I should pay a deposit in the amount of R200
000.00,
“
Italian Commercial
would reflect to them
the sum of R200 000.00 instead of R150 000.00 as a deposit to ensure
payment”
to finance the deal.
(10) The learned Judge in evaluating the appellant’s
submissions held that:
“the appellant’s affidavit does
not state that he paid the deposit of R150 000.00 to the respondent
in any other manner
other than by alleging that he paid it to Italian
Commercial Truck Service Centre (Pty) Ltd. The appellant paid the
deposit to
the vendor who sold the motor vehicle to him and not to
the respondent. There is no substance in the argument that the
appellant
has a lien over the motor vehicle nor that he is entitled
to retain the vehicle until restitution of the deposit has taken
place.”
(11) The learned Judge further held that
: “the respondent is
entitled to repossession of the motor vehicle in order to enable it
to value and assess the damages it
was entitled to flowing from the
breach of the agreement by the appellant.”
(12) The gravamen of the appellant’s defence is that he is a
victim of a fraudulent misrepresentation in that he was under
the
bona fide
impression that he was purchasing a 2007 brand new
Iveco 65 Seater Bus when in fact the respondent and its agent
“
Italian Commercial”
colluded in selling him a
2002 Iveco 65 Seater Bus, consequently, appellant contends that the
Instalment Sale Agreement was
void ab initio
and unenforceable
(13) The Instalment Sale Agreement pertinently shows that an initial
payment of R200 000.00 was paid as a deposit towards the purchase
of
the vehicle. The agreement also records the description of the goods
sold as an Iveco 65 Seater Bus with engine number 8360465307780840
and chassis number ZCFAIRJO023600860, and the year of first
registration, being ”
2007.
”
(14) The appellant seeks to resile from the agreement on the basis of
an alleged fraudulent misrepresentation. He avers that when
purchasing the Iveco 65 Seater Bus, he directly dealt with the staff
of “
Italian Commercial.
” He imputes a fraudulent
misrepresentation to “
Italian Commercial
” as the
agent of the appellant in selling him a 2002 registered vehicle and
not a 2007 registered vehicle as he thought he
was purchasing. It is
permissible for a party to resile from an agreement which is induced
by the fraud of a third party acting
in collusion with or as the
agent of one of the parties
[See Karabus Motors (1959) Ltd v
Van Eck
1962 (1) SA 451(c)
at 453D-E]
(15) Although the appellant alleges that “
Italian
Commercial
” acted as an agent of the respondent in making
the fraudulent misrepresentation, there is nothing in the terms of
the Instalment
Sale Agreement, to support such contention. The
alleged agency relationship is not substantiated by any factual
evidence and is
merely a conclusion of law by the appellant. Also,
there is no evidence of collusion between the respondent and “
Italian
Commercial.”
(16) The failure to establish agency or collusion does not
necessarily disentitle the appellant from relying on the alleged
fraudulent
misrepresentation. Sufficient facts are stated in the
answering affidavit to entitle the appellant to resile from the
agreement
on the basis of
Justus Error.
(17) The appellant avers in effect that the fraudulent
misrepresentation induced him to mistakenly believe that he was
purchasing
a 2007 Iveco 65 Seater Bus as opposed to a 2002
reconstructed vehicle. Whether his error was sufficiently reasonable
(or
Justus
) to entitle him to resile for the agreement is a
matter for the trial court to decide. See in this regard
Standard
Credit Corporation Ltd Naicker
1987 (2) SA 49
NPD)
and also
the discussion in
RH Christie The Law of Contract in South
Africa 5
th
Edition pp177 at
272.
(18) To answer the question whether the appellant as a reasonable man
was actually misled one must of necessity consider the totality
of
the relevant evidence at the trial
.
In
J Z Brink and
Humphries and Jewell (Pty) Ltd
2005 (2) ALL SA 343
(SCA),
the
Court
cautioned that: “
While courts should
come to the rescue of parties who have been misled or induced to
enter into agreements of the kind under discussion
they should be
mindful of what was stated in
National Overseas
Distributors Corporation (Pty) Ltd v Potato Board
1958 (2) SA 473
(A)
at 479G-H:
‘Our law allows a party to set up his own mistake in
certain circumstances in order to escape liability under a contract
into
which he has entered. But where the other party has not made any
misrepresentation and has not appreciated at the time of acceptance
that his offer was being accepted under a misapprehension, the scope
for a defence of unilateral mistake is very narrow, if it
exists at
all. At least the mistake (error) would have to be reasonable
(justus) and it would have to be pleaded….”
In the
present matter there is a possibility of a basis in the evidence for
a contention that the mistake was reasonable.
(19) There is no legal impediment debarring the appellant from
attacking the respondent’s cause of action because the
respondent
intends enforcing a contract that is not in accordance
with what the appellant alleges was agreed between itself and
“
Italian Commercial
” especially in this matter
where there is a dispute as to the vehicle sold, and the vehicle
intended to be purchased.
See Tesven CC v South African Bank of Athens
1999 4 ALL SA 396
A 401 para [16].
(20) The learned Judge was required to decide whether the appellant
had a
bona fide
defence to the action. The learned judge
misdirected herself in that she never applied the test enunciated in
Rule 32(3)(b)
to the facts contained in appellant’s
affidavits. In this case sufficient material facts of the nature and
grounds of the
defence have been disclosed to enable the learned
Judge to have decided whether the appellant’s defence was
bona
fide
or not.
(21) The learned Judge erred in dealing with the content of the
appellant’s affidavits as if it were evidence before her.
It
was not her function to decide, (“an
almost impossible
task
”) on paper whether the appellant was truthful or not,
neither was it her function to make credibility or factual findings
nor legal conclusions.
(22) The respondent’s cause of action is further predicated on
the basis that it financed a 2007 registered Iveco 65 Seater
Bus. The
respondent extraneously contends that the recordal in the Instalment
Sale Agreement of financing a 2007 registered Iveco
65 Seater Bus as
opposed to a 2002 registered vehicle is attributable to a
typographical error. The respondent has not sought to
rectify the
Instalment Sale Agreement to reflect the sale of a 2002 registered
Iveco 65 Seater Bus. This is in itself is a reason
to refuse summary
judgment as a claim for rectification does not fall within the ambit
of Rule 32.
(23) Applying the principles enunciated in the case of
Marsh
and Another supra
the appellant has disclosed a
bona fide
reasonable defence with reasonable sufficient particularity and
completeness to enable him to hold that if the statement of fact
is
found to be correct at trial, judgment may be given in his favour.
(24) For these reasons I would uphold the appeal with costs. In the
premises the following order is made:
(1) The appeal succeeds with costs;
(2) The order of the Court a quo is set aside and the following order
is substituted for it. “
The defendant is given leave to
defend. The costs of this application are costs in the cause of the
main action.”
Signed at Johannesburg on the 1
st
December 2009.
________________________
MOKGOATLHENG J
JUDGE OF THE HIGH COURT
I, concur
____________________________
CLAASSEN J
JUDGE OF THE HIGH COURT
I, concur
___________________________
BORUCHOWITZ J
JUDGE OF THE HIGH COURT
DATE OF HEARING:28
TH
OCTOBER 2009
DATE OF JUDGMENT:9
TH
DECEMBER 2009
ON BEHALF OF THE APPELLANT: MR ZEHIR OMAR OF ZEHIR OMAR ATTORNEYS
TELEPHONE NUMBER:(011) 815-1720
ON BEHALF OF THE RESPONDENT: ADV. E TOLMAY
INSTRUCTED BY: BLAKES BESTER ATTORNEYS c/o BREYTENBACH MOSTERT
SKOSANA ATTORNEYS
TELEPHONE NUMBER:(011) 509-8000