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[2024] ZAFSHC 128
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Standard Bank of South Africa Ltd v De Villers Theron N.O. and Others (4609/2022) [2024] ZAFSHC 128 (7 May 2024)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
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IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
Reportable: YES/NO
Of
Interest to other Judges: YES/NO
Circulate
to Magistrates: YES/NO
Case
No. 4609/2022
In
the matter between:
STANDARD
BANK OF SOUTH AFRICA LTD
APPLICANT
(Registration
number:1962[…])
And
FRANK
DE VILLERS THERON N.O.
1
ST
RESPONDENT
(Identity
number: 6[…])
KARIEN
THERON
N.O
2
ND
RESPONDENT
(Identity
number: 7[…])
BETA
TRUST ADMIN (PTY) LTD
3
RD
RESPONDENT
(Registration
number:2012[…])
FRANK
DE VILLIERS THERON
4TH
RESPONDENT
(Identity
number: 6[…])
KARIEN
THERON
5
TH
RESPONDENT
(Identity
number: 7[…])
CORAM:
MAJOSI, AJ
HEARD
ON:
18 APRIL 2024
DELIVERED
ON:
07 MAY 2024
JUDGMENT
INTRODUCTION
[1]
This is an opposed application for
summary judgment in terms of Rule 32 of the Uniform Rules of Court
wherein the Applicant seeks
an order against the First three
Respondents jointly and severally for an amount of R 1 058 531.25,
the one paying, the other to
be absolved. Summary judgment is also
sought against the Fourth and Fifth Respondents for an amount of R 1
000 000.00 as they are
guarantors of the debt of the first three
Respondents.
II
PARTIES
[2]
The Applicant is a company with
limited liability and bank duly registered and incorporated in
accordance with the laws of the Republic
of South Africa with its
registered office in Johannesburg.
It
is also a registered credit provider.
[3]
The First Respondent is a major male
person cited in his capacity as trustee of the Theron Family Trust
with registration number
IT 474/94. The Second Respondent is a major
female cited in her capacity as trustee of the Thereon Family Trust
with based in Bloemfontein,
Free State.
[4]
The Third Respondent is Beta Trust
ADMIN (PTY) Ltd, NO, a private company duly registered and
incorporated with the laws of the
Republic of South Africa cited in
its capacity as trustee of the Theron Family Trust. The Fourth and
Fifth Respondents are cited
in their personal capacities and as
guarantors of the guarantee agreement.
Ill
BACKGROUND
[4]
On 30 March 2019, the Applicant concluded a written agreement with
the First, Second and Third Respondents wherein
a credit overdraft
facility of R 500 000.00 was extended with interest. The Fourth and
Fifth Respondents jointly and severally,
guaranteed this debt with a
maximum aggregate of R 1 000 000.00 with an additional agreement.
[6]
The First, Second and Third
Respondents failed to service their debt in monthly instalments and
the Fourth and Fifth Respondents
also failed to make payments as the
guarantors of the debt. Despite lawful demand, the Respondents failed
to make payments and
the Applicant issued summons to recover the
money due and payable for the above-mentioned debts.
[7]
A notice of intention to defend was filed and
after a plea was filed on behalf of the Respondents, the Applicant's
filed an application
for summary judgment. The Applicant's Manager
for Business Lending Collections and Business and Commercial Banking
deposed to an
affidavit verifying the cause of action together with
the amount claimed and alleged that the Respondents did not raise any
issue
for trial that would persuade the court not to grant summary
judgment.
[8]
The Respondents filed affidavits
resisting summary judgment and assailed the application for various
reasons. Firstly, that the
affidavit in support of summary judgment
failed to allege that the deponent personally verified the cause of
action. Secondly,
that the National Credit Act (NCA) is applicable to
the agreements. Lastly, that the Trust is not defined as a juristic
person
and did not sign the credit facility agreement nor did it take
a resolution to apply for debt or consent that the debt be extended.
IV
DISCUSSION
Rule
32 of the Uniform Rules of Court
[10]
Rule
32 sets out the grounds upon which a court may grant summary judgment
and directs that a defendant must either provide security
to the
satisfaction of the court or file an affidavit within the prescribed
time frames wherein they fully disclose the nature
and grounds and
material facts relied upon for resisting summary judgment.
[1]
[11]
In Joob Joob Investments (Pty) Ltd v Stocks
Mavundla Zek Joint Venture 9
2009 (5) SA 1
(SCA), Navsa stated the
flowing at paragraph 32:
'The rationale for
summary judgment proceedings is impeccable. The procedure is not
intended to deprive a defendant with a triable
issue or a sustainable
defence of her/his day in court. After almost a century of successful
application in our courts, summary
judgment proceedings can hardly
continue to be described as extraordinary. Our courts, both of first
instance and at appellate
level, have during that time rightly been
trusted to ensure that a defendant with a triable issue is not shut
out. In the Maharaj
case at 425G-426E, Corbett JA was keen to ensure,
first, an examination of whether there has been sufficient disclosure
by a defendant
of the nature and grounds of his defence and the facts
upon which it is founded. The second consideration is that the
defence so
disclosed must be both bona fide and good in law. A court
which is satisfied that this threshold has been crossed is then bound
to refuse summary judgment. "
[12]
Tumileng Trading CC v National Security and
Fire (Pty) Ltd 2020 JDR 0747 (WCC) 2020 JDR 0747, Binns-Ward J said
the following at
para 13:
"
Rule 32(3), which regulates what is
required from a defendant in its opposing affidavit, has been left
substantively unamended in
the overhauled procedure. That means that
the test remains what it always was: has the defendant disclosed a
bona fide (i.e. an
apparently genuinely advanced, as distinct from
sham) defence? There is no indication in the amended rule that the
method of determining
that has changed. The classical formulations in
Maharaj and Breitenbach v Fiat SA as to what is expected of a
defendant seeking
to successfully oppose an application for summary
judgment therefore remain of application... "
Affidavit
in support of summary judgment
[13]
The
Respondents contend that the deponent of the founding affidavit does
not have direct or personal knowledge to enable her to
positively
swear to all the facts or that she personally verified the Plaintiffs
cause of action and the amount claimed for as
required by Rule
32(2).
[2]
[14]
The Applicant averred that the deponent is
employed as a Manager Business Lending Collections and that as part
of her duties ,she
has, in her control, all of the records and
documentation relevant to the respondents case including all
agreements entered into
with the respondents including the guarantees
signed by the fourth and fifth respondent, all payments made by the
respondents and
all records showing the failure of the respondents
including the guarantors, in paying the debt.
[15]
In
addition to this, she also has access to all balances relating to the
debt of the respondents hence she was able to verify the
cause of
action as stated in the summons and account for all amounts due and
payable together with interest due not only in the
credit facility
agreement, but also the guarantor agreement.
[3]
and has also attached her letter of authority confirming same.
[16]
In
my view, having regard to the founding affidavit as well as the
deponent's letter of authority
[4]
confirming
that by virtue of her position, she personally accessed the
above-mentioned documents but she is also deposed to an affidavit
specifically relating to litigation involving Applicant and the
Respondents, I am satisfied that she has sufficient knowledge to
swear positively to the facts and was able to verify the Plaintiffs
cause of action.
Resolution
[17]
The
Defendants allege the Third Respondent was not part of the meeting of
the trustees that resolved to take out a credit facility
of R 500
000.00 and there was also no formal meeting between the trustees of
the Theron Family Trust hence there was no resolution
taken in that
regard.
[5]
[18]
The
Applicant argued that a Trust is a legal personality that requires
all appointed Trustees to act together and the respondents
were thus
required to provide it with a resolution to that effect which was
indeed done as per the resolution provided which was
signed on the 30
of March 2019.
[6]
[19]
The
Respondents' assertion that there was no resolution taken cannot be
accepted for several reasons. Firstly, the papers reveal
the said
resolution was signed on the very same date when the agreement for
the credit facility was signed which is coincidently
the same date on
which the guarantee agreement was also signed. Secondly, clause 10 of
the credit facility agreement
[7]
unequivocally states that the provision of authorizing or supporting
resolution is suspensive condition to the agreement. In other
words,
if this is not provided, credit would not be extended. This was known
even before they signed the agreement.
[20]
Thirdly,
though the Respondent's indicated that the resolution was taken in
the absence of the Third Respondent, if one looks at
their plea in
the main action and their opposing affidavit, specifically paragraph
11 thereof, they do not deny that the third
respondent is also a
member of the Theron Family Trust but covertly do not disclose who
are its members. In my view, this line
of argument is not only
opportunistic but supports the Applicants assertion that the first
and second respondents as trustees,
intended to bind the Third
Defendant as per the signatures appearing on the resolution provided
to the Applicant.
[8]
Denial
of the breach and Liquated claim
[21]
The Respondents deny that they are in
breach of the agreement or that the certificate of balance provides
an easily calculable amount
as per the requirements of Rule 32(1) as
there is no specific breakdown of the capital amount and the interest
due and payable
and contend that the credit was unilaterally extended
without their knowledge.
[22]
The
Applicant in turn avers that clause 18.14 of the overdraft agreement
states that a certificate of balance to that effect will
be
sufficient to prove the claim,
[9]
the loan amount and interest thereto which is in any event contained
in the agreement. I agree with the Applicant for three reasons.
Firstly, Respondents have admitted in paragraphs 29.1 and 34.1 of
their opposing affidavits that an overdraft facility of R 500
000.00
was indeed applied for as per the agreement and that they are indeed
in arrears with the repayments thereof. This in itself
together with
clause 18.14 reveals that the Respondents argument in that regard
does not suffice and cannot stand as a defence.
[22]
Secondly,
the signed agreement entered into on the 30 of March 2019
specifically states that the principal debt will be the amount
of R
500 000.00 and that it will be subject to a variable
interest
rate.
[10]
This
is over and above the certificate of balance indicating the amount
due for the credit facility and the
guarantee
agreement. The agreement is thus undoubtedly based on a liquid
document.
Lastly,
the assertion that the overdraft facility was extended without their
knowledge cannot be accepted either. The guarantor
agreement as
signed by the Fourth and Fifth Respondents, who are coincidentally
listed as Trustees of the Theron Family Trust,
bound themselves
jointly and severally to pay the debt (R 1 000 000.00) upon written
notice and demand when the debt becomes due
and payable. This much is
contained in paragraph 1.2 of their agreement.
Juristic
persons and the National Credit Act
[23]
The
last defence raised in resisting summary judgement is that that the
trust is not a juristic person and the National Credit Act
is
applicable to the agreements and that the Applicant failed to conduct
a credit risk assessment and may have extended reckless
credit and
referenced sections 81(1)(b) and section 81(2) of NCA.
[11]
[24]
The
Applicant in its founding affidavit was specific to state National
Credit Act is not applicable to the said agreements as they
are
specifically excluded in terms of section 4(1)(a)(i) of the NCA and
the first three respondents (consumers) are juristic persons
whose
asset value or annual turnover exceeded R 1 000 000.00. Also, in
terms of section 4(1)(b) of the Act, the debt exceeds and
amount of R
250 000.00.
[12]
[25]
I
am not in agreement with the Respondents when they state that the
Applicant made a bald allegation that the NCA is not applicable.
The
first Three Respondents contracted in their official capacities as
trustees of the Theron Family Trust and same can be classified
as a
juristic person as defined in section 1 of the NCA. Furthermore, the
credit facility amount concerned is for an amount of
R 500 000.00,
which automatically places it in the category of a large agreement.
In my view, the NCA is not applicable to this
agreement due the
credit facility amount and there can be no defence of reckless credit
being extended.
[13]
The
Respondents
in
any
event
did
not
dispute
that
the
amount
concerned is over the threshold value as determined by the Minister.
[26]
The further challenge with the Fourth and
Fifth Respondents is that they bound themselves as guarantors to the
main agreement. It
important to note at this stage, that their
liability would only arise should the first three
respondents(consumers) fail to repay
or settle the debt. In my view,
section 4(2)(c) of the NCA makes it clear to state a credit guarantee
will only apply to the credit
facility in respect of which the credit
guarantee was granted.
[27]
This
therefore entails that should the NCA not be applicable to the main
agreement, it can therefore not apply to the guarantee
agreement as
they (fourth and fifth respondents) did not actually receive the
credit extended to the first three respondents and
they cannot be
considered to be co-principal debtors
[14]
and their assertions that the NCA is applicable must thus also fail.
[
27] In light of the above, I hereby find that the Applicant has made
out a case for summary judgment to be granted against all
the
Respondents and the defences raised thereto have no merit. To that
end, the order below shall refer to the parties as they
are cited in
the main action to dispel any confusion pertaining to all parties
concerned. It is trite that costs follow the result
and I am not
persuaded to deviate from this established principle and will order
costs in favour of the Plaintiff (Applicant).
V
ORDER
[42]
Accordingly, I make the following order;
1.
The First, Second and Third Defendants are ordered
to pay the Plaintiff the amount of R 1 058 531.25. jointly and
severally, the
one paying, the other to be absolved.
2.
The Fourth and Fifth Defendants are ordered
to pay the Plaintiff the amount of R 1 000 000.00. jointly and
severally, the one paying,
the other to be absolved.
3.
Interest on the aforesaid amounts above the
rate of 7.75% per annum from the 25 June 2022 to date of payment.
4.
Costs on attorney and client scale.
MAJOSI
OR, AJ
APPEARANCES:
On
behalf of the Applicant
Adv.
Z Nyezi
Instructed
by:
c/o
Symington and De Kok Attorneys
BLOEMFONTEIN
On
behalf of the Respondents
Adv.
G.S.J Van Rensburg
Instructed
by:
Huggett
Retief Inc.
BLOEMFONTEIN
[1]
(1)
The plaintiff may, after the defendant has delivered a plea, apply
to court for summary judgment on each of such claims in
the summons
as is only -
(a)
on a liquid document;
(b)
for a liquidated amount in money;
(c)
for delivery of specified movable
property; or
(d)
for ejectment;
together
with any claim for interest and costs.
(2)(a)
Within 15 days after the date of delivery of the plea, the plaintiff
shall deliver a notice of application for summary
judgment, together
with an affidavit made by the plaintiff or by any other person who
can swear positively to the facts.
(b)
The plaintiff shall, in the
affidavit referred to in subrule (2)(a), verify the cause of action
and the amount, if any, claimed,
and identify any point of law
relied upon and the facts upon which the plaintiff's claim is based,
and explain briefly why the
defence as pleaded does not
raise any issue for
trial.
(c)
If the claim is founded on a liquid
document a copy of the document shall
be
annexed to such affidavit and the notice of application for summary
judgment shall state that the application will be set down
for
hearing on a stated day not
being
less than 15 days from the date of the delivery thereof.
(3)
The
defendant
may
-
(a)
give security to the plaintiff to
the satisfaction of the court for any judgment including costs which
may be given; or
(b)
satisfy the court by affidavit
(which shall be delivered five days before the day on which the
application is to be heard), or
with the leave of the court by oral
evidence of such defendant or of any other person who can swear
positively to the fact that
the defendant has a bona fide defence to
the action; such affidavit or evidence shall disclose fully the
nature and grounds of
the defence and the
material facts relied upon therefor.
[2]
Respondents'
Opposing
affidavit, para 17- 18.
[3]
Founding
affidavit,
para
4-17.
[4]
Annexure
SJ1,
Letter of authority
of
Mbali Mazibuko.
[5]
Opposing
affidavit para 11-14 and Respondents heads of argument, para 4.
[6]
Indexed
bundle, P 41.
[7]
Ibid
P 22.
[8]
Slipknots
Investments v Du Tait 2011(4) SA 72 (SCA).
[9]
Applicants
heads of argument. Para 5.
[10]
Indexed
bundle Overdraft agreement clause 1, 4 and 5.
[11]
Opposing
affidavit, para 29 -30.
[12]
Founding
affidavit 19- 28.
[13]
FirstRand
Bank Ltd v Carl Beck Estates (Pty) Ltd and Another
2009 (3) SA 384
(T), paras 9 -13.
[14]
Ibid
para 16 -
23.