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[2008] ZAWCHC 125
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Standard Bank of South Africa Limited v Hunkydory Investments 194 (Pty) Ltd and Another (6408/2008) [2008] ZAWCHC 125; 2010 (1) SA 627 (C) (10 October 2008)
IN
THE HIGH COURT OF SOUTH AFRICA
(CAPE
OF GOOD HOPE PROVINCIAL DIVISION)
CASE
NO: 6408/2008
In
the matter between:
THE
STANDARD BANK OF SOUTH AFRICA LIMITED
Plaintiff
and
HUNKYDORY
INVESTMENTS 194 (PTY) LIMITED
First
Defendant
RUPERT
HENRY INGRAM
Second
Defendant
JUDGEMENT
DELIVERED ON 10 OCTOBER 2008
ELIZE
STEYN AJ
THE
APPLICATION
1
.
Plaintiff Is applying for Summary Judgment to be entered against
First and Second Defendants jointly and severally for payment
of a
capital sum together with interest thereon and costs of suit on the
scale as between attorney and client, Plaintiff further
asks for an
order against First Defendant declaring its mortgaged immovable
property executable for the claimed sums.
THE
OPPOSITION
2. Defendants
filed a Notice of Opposition of Application for Summary Judgment
wherein notice was given that they would apply for
the striking out
of paragraph 3 of the
'Applicant's
replying affidavit',
presumably
referring to the Applicant's supporting affidavit. This striking out
application was not raised in the Defendants' Heads
of Argument, but
it was dealt with in their opposing Affidavit in support of their
contentions that Summary Judgment be refused.
3. In
Paragraph 3 of the Applicant's affidavit in support of the
application for Summary Judgment, an employer of Plaintiff sets
out
the circumstances that form the basis of her knowledge of the facts
pertaining to the matter. I was referred to the judgment
of
Fischereigesellschaft
v
African
Frozen
products, 1967
(4)Sa
105
(CPD)
at
109H
- 110F. in support of the contention that Defendants' application for
the striking out was unfounded and I agree that it has
no merit.
4. Another
point not raised In the Defendants' Heads of Argument, but raised by
the Defendants in their affidavit opposing Summary
Judgment was that
the Defendants denied that the deponent to Plaintiffs affidavit had
the requisite authority to sign the affidavit,
I was persuaded by Mr.
Sievers, with reference to reported decisions that this purported
defence, is without merit.
5.
Defendants
are opposing the Application, as set out in Heads of Argument on the
grounds that:
5.1 Plaintiffs
summons is vague and embarrassing and therefore excipiable in terms
of Rule 23 and/or irregular in terms of Rule
30, in essence, because
Plaintiff made spelling errors when referring to Defendants on 5
separate occasions in the summons;
5.2 Sections
4(1)(a), 4(1)(b) and 4(2)(c) of the National Credit Act, no. 34 of
2005 (The Act') are unconstitutional in so far as
it states that the
Act is not applicable to a juristic person.
THE
SUMMONS
6. Plaintiff
instituted action against Defendants by way of a simple summons as
provided for in Uniform Rule of Court 17(1),
7. A
simple Summons (Form 9) is used for claims for debts or a liquidated
demand. Form 9 requires the Plaintiff to set out his cause
of action
'in
concise terms'.
Full
particularity is not required as long as a general Indication of the
cause of action Is provided. The statement of the cause
of action in
a simple summons is in fact no more than a
'label,
an
indication of the Plaintiffs claim
in
the most general terms'.
See
Erasmus, Superior Court Practise, B 124 and further and the comments
and cases quoted.
See
also BW Kuttle & Association Inc v O'Connell Manthe and Partners
Inc
1984 (2) SA 665
(CPD) at 668 B-D and VolKskas Bank Ltd v
Wilkinson and Three similar Cases
1992 (2) SA 38*
(CPD) at 394 J.
EXCEPTIONS
and IRREGULAR PROCEDURE
8.
That a summary judgment simple summons Is capable of being set aside
on exception, or as an improper or irregular step, may
be
a
good reason why summary judgment should be refused. It would
constitute a
bona
fide
defence. However, it could not have been intended that the initiating
simple summons should contain the degree of particularity
which is
appropriate in a declaration. A court will only grant summary
judgment if satisfied that the necessary elements which
go to make up
a cause of action have been verified under oath.
See
Dowson
v Dobson
Industrial
v
Van
Der
Werf
1991 (4) SA 417
CPD
9. It
is trite law that an overly-technical approach by the Court with
regard to exceptions and irregular procedure should be avoided.
The
Court does not look too critically at a pleading.
10. Whether
a pleading is vague and embarrassing on the ground of lack of
particularity depends on whether it complies with the
provisions of
the relevant Rules of the Uniform Rules of Court. Prejudice to a
litigant faced with an embarrassing pleading lies
ultimately in an
inability to prepare properly to meet an opponent's case.
11. As
stated hereinabove the simple summons (Form 9) intended for use in
claims for a debt or liquidated demand should contain
only an
indication of the Plaintiff's cJaim in the most general terms. All
that is required is that the claim be set out with sufficient
particularity for the court to decide whether judgment should be
granted and for the Defendant to be made aware of what is being
claimed from him.
12.
I
agree with the detailed argument of Mr. Sievers, on behalf of the
Plaintiff, that the Plaintiff has complied with the requirements
of
Rule 17 read with Form 9. There are four spelling errors relating to
the word Defendants. The 5
th
objection raised, is incorrect. The existence of a few spelling
errors does not render the summons defective or the statement of
the
cause of action inadequate.
I
am
satisfied that the necessary elements constituting
a
cause
of
action have been properly verified under oath, as being present. I am
not persuaded that summary judgment should be dismissed
on this
ground.
THE
CONSTITUTIONALITY OF SECTIONS 4(1)(a), 4(1 )(b) and 4(2)(c), OF THE
NATIONAL CREDIT ACT No 34 of 2005. ('The Act')
13. The
National Credit Act No 34 of 2005, (Ihe Act') is limited in its
application regarding incidental credit agreements on the
one hand
and all credit agreements in terms whereof the consumer is a juristic
person on the other hand. A juristic person has
an extended meaning
for purposes of the Act. It includes partnerships, any association or
body of persons, corporate or unincorporated
and trusts with three or
more trustees. Companies and close corporations fall within the
concept of a juristic person. Juristic
persons do not enjoy the
protection contained in certain parts or sections of the Act. The
exceptions are numerous and include
that juristic persons do not have
the protection of the parts of the Act dealing with reckless credit,
debt review, rescheduling
of debt etc.
14. The
Defendants correctly argue that the agreements entered into between
the Plaintiff and the First Defendant are not governed
by the
provisions of the Act, Defendants are excluded from the protection of
the Act because First Defendant is a juristic person.
(Sections
4(1)(a), 4(1)(b) and 4(1)(
c
)
of the Act.)
15. The
Defendants claim that sections 4(l)(a), 4(1)(b) and 4(2)(c)
p
of the Act are unconstitutional In so far as It states that the Act
is not applicable to a juristic person and that the Act only
applies
to a surety contract if the Act applies to the contract in respect of
which the surety was granted. Second Defendant submits
that section
4(2)(c) should be so interpreted as to afford him, as the
"alleged
surety)
the
same protection as any other natural person who signed surety for the
debt of another natural person.
He
argues
that the Plaintiff should have complied with the provisions of the
Act before issuing summons in the matter. It has failed
to do so and
the matter
'should
therefore not be before this Honourable Court.
It
is submitted that if the Court should find that the Act cannot be
interpreted so as to afford Second Defendant the protection
of the
Act, he submits that sections 4(1 )(a) and (b) of the Act are
unconstitutional,
16. Second
Defendant furthermore states that the First Defendant is a property
holding company which does not trade. Second Defendant
transferred
the property in question to the First Defendant 'as
an
estate planning measure.'
He
submits that it is unfair that First and Second Defendants are not
afforded the same protection under the Act as any other natural
person, just because the credit agreement was concluded with a
juristic person. He maintains that there Is no reason why a juristic
person should not be afforded the same protection under the Act as a
natural person. Defendants accordingly requested, in Second
Defendant's affidavit, that the Court should declare sections 4(1)(a)
and (b) of the Act unconstitutional.
17. The
Defendants have failed to comply with the relevant provisions of
Uniform Rules of Court 10 and 16 regarding the raising
of
constitutional issues in an action. I will deal with their
submissions regardless.
18. Quoting
Section 9(1) of the Constitution of South Africa, Act 108 of 1996,
('the Constitution') Defendants submitted in the
heads of Argument,
that everyone is equal before the law and have the right to equal
protection and benefit of the law. (The right
to equality) It is
furthermore submitted that the provisions of Section 36 of the
Constitution, dealing with the limitation of
rights, do not 'save
the
violation of the Defendants' rights to equality,
It
is accordingly submitted by the Defendants that the said sections in
the Act should be declared unconstitutional and for that
reason the
application for summary judgment should be dismissed and Defendants
given leave to defend the action.
19. The
purpose of the Act is described
inter
alia
In
the preamble and in par 3 of the Act. Par 3 reads as follows.
'3
Purpose
of Act
The
purposes of this Act are to promote and advance the social and
eqonomic welfare of South Africans, promote
a
fair,
transparent, competitive, sustainable, responsible, efficient,
effective and accessible credit market and Industry, and to
protect
consumers, by-
(a)
promoting
the development of a credit market that is accessible to all South
Africans, and in particular to those who have historically
been
unable to access credit under sustainable market conditions;
(b) ensuring
consistent treatment of different credit products and different
credit providers;
(c) promoting
responsibility in the credit market by;
(i)
encouraging
responsible borrowing, avoidance of over-indebtedness and fulfillment
of financial obligations by consumers; and
(ii)
discouraging
reckless credit granting by credit providers and contractual default
by consumers;
(d)
promoting
equity in the credit market by balancing the
respective rights and
responsibilities of credit providers and
consumers;
â
20 Inessence
the Act attempts to prevent the reckless provision of credit
by
Institutions
to people who cannot afford credit.
21. It
has
been
stated
that attacks on the legislation founded on the provisions relating to
equality in the Constitution raise difficult questions
of
constitutional interpretation and require careful analysis of the
facts of each case and an equally careful application of those
facts
to the law. In Prinsloo v Van
Der
Llnde, and Another,
1997
(3)
SA
1012
(CC),
it
was stated that this court -
"should
he astute not to lay down sweeping interpretations at this stage but
should allow equality doctrine to develop slowly
and hopefully
surely. This is clearly an area where issues should be dealt with
incrementally and on a case by case basis with
special emphasis on
the actual context Mwhioh each problem arises.'
22.
In
Harksen v
Lane
NO
and
Others,
1998(1)
SA
300,
CC,
p
320 Goldstone J found, regarding arguments relating to lack of
equality, that an enquiry should be directed by the Court to the
question as to whether the impugned provisions do differentiate
between people or categories of people. If it does so differentiate,
then in order not to fall foul of equality provisions in the
Constitution (at the time section S(1)of the then Interim
Constitution),
there must be a rational connection between
the
differentiation in question and the legitimate governmental
purpose it is designed to further or achieve. If It is Justified in
that way, then it does not amount to a breach of the relevant
section.
23. It
was further stated by Goldstone J, supra, p 321 D, that
Iff
the
differentiation complained of bears no rational connection to a
legitimate governmental purpose which is proffered to validate
it,
then the provision in question violates the provisions of s 8(1) of
the Interim Constitution, If there Is
such
a
rational
connection, then it becomes necessary to proceed to. the provisions
of s 8(2) to determine whether, despite such rationality,
the
differentiation none the less amounts to unfair discrimination.'
24. There
may be Instances of discrimination which do not amount to unfair
discrimination. In the final analysis it has been held
that it is the
impact of discrimination on a complainant that is the determining
factor regarding trie unfairness of the discrimination.
To establish
unfairness in this context various factors must be considered,
including the position of the complainants in the society
and whether
they have suffered in the past from, patterns of disadvantage, the
nature of the provision and the purpose sought to
be achieved by It.
If the purpose is aimed at achieving a worthy societal goal, this
purpose may have a significant bearing on
the question whether
complainants have in fact suffered the Impairment in question.
25. There
can be no doubt that there Is a rational connection between the
differentiation created by the relevant provisions of
section 4
of
the
National Credit Act and
the legitimate governmental purpose
behind its enactment.
I
have
not been persuaded, on a balance of probabilities, by thje
Defendants, who bear the
onus
in
this regard, that any differentiation on discrimination, even if it
exists, is unfair. I have not been persuaded that the First
Defendant's exclusion from the protection of the relevant sections
ofj the Act, have any negative effect on it.
26.
The
Defendants have failed to set out in their Heads of Argument, or
in
argument in Court, any constitutional right that would be
infringed upon, should judgment be granted as prayed. As correctly
submitted
by Mr Sievers, the onus is on the Defendants to set out how
and why their rights will be prejudiced unless the provisions of the
Act are declared unconstitutional. In his affidavit the Second
Defendant admits that the property which Plaintiff is claiming should
be declared executable, was transferred to First Defendant as
'an
estate planning measure',
He
decided to avail himself of the use of a separate entity in order to
avoid certain tax implications. This is the reason why First
Defendant docs not have the protection of a natural person and why it
is fair that he should not be bestowed with the same protection.
27.
I
do not intend to deal with the remaining defences raised on behalf of
the Defendants in their opposing Affidavit. I have considered
these
defences and took note of the arguments relating thereto. The
defences were not proceeded with by Defendants in Court and
have no
merit.
CONCLUSION
28.
The
defences raised in this matter are without merit. Defendants do not
have a
bona
fide
defence
and their opposition to the application for summary judgment is aimed
merely at a delay of the action.
ORDER
Judgment
is claimed and is granted as follows:
1.
Against
First Defendant for:
i
1,1.
Payment ofthe sum of R 982 115,42;
1.2.
Interest:
1.2.1
on R 828 000,00 at 13.25% per annum from 9 April 2008;
1.2.2
on R 156 115.42 at 14.75% per annum from 9 April 2008 to 28 May 2008
and thereafter on R 154 115,42 at 14.75% per annum to
date of payment
in full.
1.3.
An order declaring Erf 3186 Somerset West, in the City of Cape Town,
Stellenbosch Division, Western Cape Province, specially
executable.
1.4.
Costs of suit
2.
Against Second Defendant, (jointly and severally with First
Defendant) for
i
payment
of
the
amounts
referred
to
in 1.1,1.2 and 1.4 hereof.
Elize
Steyn, AJ