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[2024] ZANCHC 3
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ABSA Bank Limited v Saunderson (2395/2022) [2024] ZANCHC 3; [2024] 2 All SA 364 (NCK); 2024 (4) SA 552 (NCK) (19 January 2024)
SAFLII
Note:
Certain
personal/private details of parties or witnesses have been
redacted from this document in compliance with the law
and
SAFLII
Policy
FLYNOTES:
CIVIL PROCEDURE – Summary judgment –
Supporting
affidavit
–
Defendant
contending that affidavit delving into merits and attaching
documents not included with particulars of claim –
Additional evidence allowed as long it serves only to support
contentions by plaintiff as to why defences as pleaded by
defendant do not raise issues for trial – In event this
evidence being documentary in nature, same is attached to
supporting affidavit so that defendant in position to answer
thereto – Annexures attached to supporting affidavit serving
these purposes – Uniform Rule 32(2).
IN THE HIGH COURT OF
SOUTH AFRICA
(NORTHERN CAPE
DIVISION, KIMBERLEY)
CASE NUMBER:
2395/2022
HEARD ON:
17 NOVEMBER 2023
DELIVERED ON:
19 JANUARY 2024
Reportable: YES/NO
Circulate to Judges:
YES/NO
Circulate to Regional
Magistrates: YES/NO
Circulate to Magistrates:
YES/NO
In the matter between:
ABSA
BANK
LIMITED
Plaintiff
/ Applicant
and
JAN
HENDRIK GERHARDUS SAUNDERSON
Defendant
/ Respondent
(Identity Number: 7[…])
Coram
:
Olivier AJ
JUDGEMENT
OLIVIER AJ
INTRODUCTION
:
1.
This is an application for summary judgment
in terms whereof the plaintiff / applicant (herein after referred to
only as “
the plaintiff
”)
approaches this Court for judgment against the defendant / respondent
(“
the defendant
”)
in essentially the following terms:
1.1
Payment in the amount of R1 589 187.81 plus interest thereon at
a rate
of 9,75% linked, per annum, capitalized monthly from 21
September 2022 to date of payment;
1.2
Payment in the amount of R3 339 659.28 plus interest thereon at
a rate
of 9,75% linked, per annum, capitalized monthly from 21
September 2022 to date of payment;
1.3
Payment in the amount of R831 974.24 plus interest thereon at a
rate of
9,75% linked, per annum, capitalized monthly from 21
September 2022 to date of payment; and
1.4
Payment by the defendant of the costs of suit on a scale as between
attorney
and client.
2.
The plaintiff’s notice of application
for summary judgment, dated 29 March 2023, contains further prayers
for orders in terms
whereof various properties would be declared
specially executable as well as matters ancillary thereto, but these
prayers did not
form the subject of the argument before me at this
time and I consequently did not have to determine same.
It
appears to be accepted that the relief sought by way of these prayers
will be referred to open Court for determination in due
course.
3.
This application for summary judgment
(herein after only referred to as “
the
Application
”) is opposed.
BACKGROUND
:
4.
The plaintiff issued Combined Summons
against the defendant on or about 12 December 2022 and the defendant,
subsequent to being
served with a Notice of Bar, filed his plea on or
about 3 March 2023.
5.
The Application was filed on 29 March 2023
and served before Nxumalo J on 5 May 2023 who postponed the
Application to 9 June
2023 and who ordered
inter
alia
further that the defendant’s
answering affidavit should be delivered on/before 12 May 2023.
6.
It appears to be common cause that the
answering affidavit was served 2 (two) Court days out of time which
prompted the defendant
to lodge an application for condonation for
the late filing of said answering affidavit on or about 18 May 2023
(herein after referred
to as “
the
Condonation Application
”).
7.
Subsequent to the filing of the answering
affidavit on 16 May 2023, the application served before Nxumalo J
again, who postponed
the Application to the opposed roll of 17
November 2023 for argument and determination.
CONDONATION
FOR LATE FILING OF ANSWERING AFFIDAVIT
:
8.
At the commencement of argument of the
Application on 17 November 2023, I enquired from Mr van Tonder who
appeared for the plaintiff,
whether he intended pursuing any sort of
argument in opposition to the condonation application since he
indicated in his Heads
of Argument on behalf of the plaintiff that
the condonation application will not be opposed.
9.
Mr van Tonder indicated that the
plaintiff’s position in the above regard had not changed and
conceded that the plaintiff
had not suffered any prejudice as a
result of the late filing of the defendant’s answering
affidavit in the Application.
10.
In view of the above and also in view of
the fact that the answering affidavit was filed a mere 2 (two) Court
days out of time,
I can see no reason why the required condonation
should not be granted and I furthermore do not deem it necessary to
spend any
more time on the issue.
LEGAL
POSITION IN RESPECT OF THE FOUNDING PAPERS
:
11.
It is common cause that
Rule
32
of the Uniform Rules of Court
(herein after referred to only as “
the
Rules
”) was amended during
the course of 2019 and that the amended
Rule
32
came into operation on 1 July
2019.
12.
It is furthermore common cause that
probably the most significant amendment to
Rule
32
is that an application for
summary judgment may now only be brought after a defendant’s
plea in an action had been filed
as opposed to after notice of
intention to defend was given according to what was required by the
rule pre-amendment.
13.
Rule 32(1)
of
the Rules sets out the restricted claims on which summary judgment
may be applied for.
14.
The parties appeared to be
ad
idem
that, given the claims of the
plaintiff on which the Application is based in this matter, the
Application is competent.
It was
certainly not argued to the contrary by any of the parties.
15.
Rule
32
furthermore
stipulates that an application for summary judgment should be
delivered within 15 (fifteen) days from date of delivery
of a
plea.
[1]
16.
In this instance again, the parties seemed
to be
ad idem
about the fact that the Application was served within the required
period of 15 (fifteen days) as no argument to the contrary was
offered.
17.
Rule
32
then
proceeds in stipulating that an application for summary judgment
should be accompanied by an affidavit deposed to by someone
who can
swear positively to the facts
[2]
and that said affidavit should:
17.1
Verify the cause of action and the amount, if any, claimed;
17.2
Identify any point of law relied upon as well as the facts upon which
the plaintiff’s claim
is based; and
17.3
Explain briefly why the defence as pleaded does not raise any issue
for trial.
18.
The above is a further significant
departure from the provisions of
Rule
32
pre-amendment, as the “old”
rule required that an affidavit in support of an application for
summary judgment should
be made by someone who can swear positively
to the facts and such a deponent was then only required to:
18.1
Verify the cause of action and amount, if any, that was claimed; and
18.2
State that in his/her opinion a
bona fide
defence to the
claims did not exist and that notice of intention to defend was given
solely for the purpose of delaying the proceedings
in the action.
19.
From a cursory glance at the contents of
the defendant’s answering affidavit in the present matter, it
appears that the defendant
takes issue with the fact that the
plaintiff’s supporting affidavit does not meet the formal
requirements of
Rule 32 (2)
of the Rules as the said supporting affidavit allegedly goes “
above
and beyond
” what is expected of
an affidavit in support of an application for summary judgment.
20.
It does however also appear that the
deponent to the defendant’s answering affidavit, despite
correctly quoting
Rule 32(2)(a)
and
Rule 32(2)(b)
of the Rules in paragraph 3.4.2 of the answering affidavit, confuses
the current provisions of
Rule 32
in respect of the contents of the supporting affidavit, with the
provisions of
Rule 32
pre-amendment, where the said deponent states in paragraph 3.5 of the
answering affidavit
“…
that
an application for summary judgment must be supported by an affidavit
which must comply with Rule 32(2)
”
,
which is essentially correct, but then in paragraph 3.7 states as
follows:
“
In
order to comply with Rule 32(2) the verifying affidavit must be made
by the applicant or by another person who can swear positively
to the
facts, contain a verification of the cause of action and the amount,
if any, claimed, as well as contain a
statement
by the deponent that in his opinion there is no bona fide defence to
the claim and that appearance to defend has been
entered solely for
the purposes of delay
.
”
(My underlining)
21.
The last-mentioned underlined statement
made by the defendant is of course not correct as this is not
required by
Rule 32
post-amendment any longer.
22.
Mr Jankowitz who appeared for the defendant
in the Application did however pursue the fact that the supporting
affidavit goes “
above and beyond
”
what is expected of an affidavit in support of an application for
summary judgment during his argument before me and I consequently
deem it prudent to deal with this issue at this stage of my judgment
already.
23.
Mr Jankowitz, if I understood him
correctly, primarily took umbrage with the fact that in the
supporting affidavit in the Application,
the plaintiff delves into
the merits of the matter by discussing the validity of the
defendant’s plea and by attaching documents
to the supporting
affidavit which were not attached to the plaintiff’s
particulars of claim and that the plaintiff, in doing
so, creates a
“
mini-trial
”
which in essence defeats the purpose of summary judgment proceedings.
24.
Rule 32(2)(b)
of
the Rules specifically states as follows:
“
The
plaintiff shall, in the affidavit referred to in sub-rule (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
.
”
(My underlining)
25.
I hold the view that the above underlined
of
Rule 32(2)
of the Rules, already indicate that a supporting affidavit in an
application for summary judgment (post-amendment) should contain
something more and deal with something more than what was required,
or rather prescribed, in terms of
Rule
32(2)
pre-amendment.
26.
I
am fortified in my above view to a very large extent by a recent
judgment penned by the learned Binns-Ward J in the matter of
Tumileng
Trading CC v National Security and Fire (Pty) Ltd
[3]
where, with reference to the contents of a memorandum published by
the relevant task team of the Rules Board during June 2016,
the
learned Judge
inter
alia
pointed out that the Rules Board reasoned as follows:
[4]
26.1
That the requirement that a plaintiff should briefly explain in
his/her founding affidavit why
the defences proffered by the
defendant do not raise triable issue(s), is necessary in order to
allow the Court to consider the
question whether a
bona fide
defence was raised, in a meaningful way;
26.2
That the above requirement will also remove the criticism that the
defendant is expected to commit
him-/herself to a specific version
whilst the plaintiff is not similarly burdened; and
26.3
That the above requirement will also serve to minimize the possible
temptation for a plaintiff
to use the summary judgment procedure as a
tactical move in order to have the defendant commit to a specific
version under oath
which could then serve as basis for
cross-examination during trial.
27.
The
learned Judge then opined that the summary judgment procedure under
the new regime, would mean that a plaintiff would be justified
to
lodge an application for summary judgment only if such plaintiff is
able to show that the defence as pleaded in the defendant’s
plea, is not a
bona
fide
defence and that it constitutes a sham defence.
[5]
28.
Further
and with specific reference to the requirement in terms of the “new”
rule that the plaintiff should state in
his/her supporting affidavit
why the defence raised in the defendant’s plea does not raise a
triable issue, the learned Judge
sets out his considered view as to
what this requirement entails and then remarks as follows:
[6]
“
It
is required to explain why it is contended that the pleaded defence
is a sham … What the amended rule does seem to do
is to
require of a plaintiff to consider very carefully its ability to
allege a belief that the defendant does not have a bona
fide defence.
This is because the plaintiff’s supporting affidavit now falls
to be made in the context of the deponent’s
knowledge of the
content of a delivered plea.
That
provides a plausible reason for the requirement of something more
than a ‘formulaic’ supporting affidavit from
the
plaintiff. The plaintiff is now required to engage with the content
of the plea in order to substantiate its averments that
the defence
is not bona fide and has been raised merely for purposes of delay
.
”
(My omissions and underlining)
29.
It
should be mentioned for the sake of completeness that the learned
Binns-Ward J does then proceed in criticizing the purpose and
impact
of the amended rule and
inter
alia
states as follows:
[7]
“…
a
court seized of a summary judgment application is not charged with
determining the substantive merit of a defence, nor with determining
its prospects of success. It is concerned only with an assessment of
whether the pleaded defence is genuinely advanced, as opposed
to a
sham put up for purposes of obtaining delay. A court engaged in that
exercise is not going to be willing to become involved
in determining
disputes of fact on the merits of the principle case … the
exercise is likely therefore to conduce to argumentative
affidavits,
setting forth as averments assertions that could more appropriately
be addressed as submissions by counsel from the
bar. In other words
it is likely to lead to unnecessary lengthy supporting affidavits,
dealing more with matters for argument that
matters of fact.
”
(My omissions)
30.
The above criticism by the learned
Binns-Ward of the summary judgment procedure post-amendment, seems to
summarize the umbrage taken
by Mr Jankowitz with the plaintiff’s
supporting affidavit in the present matter (the Application).
31.
The above obviously leaves a Court, tasked
with determining an application for summary judgment under the new
regime, with a conundrum
in that:
31.1
On the one hand it is clear that the amended
Rule
32
requires of a plaintiff to prepare and file a more comprehensive
supporting affidavit
[8]
in which
the plaintiff is furthermore specifically required to state why the
defences pleaded do not raise issues for trial and
to substantiate
said plaintiff’s contentions in this regard in such a manner as
to afford the Court a proper opportunity
to determine whether the
defences raised in the plea, are
bona
fide
defences and not sham defences raised with the purpose of delaying
proceedings; and
31.2
On the other hand the Court in question might be put in a position
where it is confronted
with disputes of fact on the merits of the
principle case between the parties which the Court is not expected to
determine at the
summary judgment stage.
[9]
32.
The
above conundrum should furthermore be considered against the primary
purpose of summary judgment proceedings namely “…
to
allow the court to summarily dispense with actions that ought not to
proceed to trial because they do not raise a genuine triable
issue,
thereby conserving scarce judicial resources and improving access to
justice.
”
[10]
33.
I
could not find any authorities (nor was I referred to any),
subsequent to the decision in
Tumileng
Trading
,
which specifically deals with and answers the question as to what
exactly should be contained in a supporting affidavit after
the
amendment to the rule
[11]
and
more importantly what would be considered as being too much or as it
was put by Mr Jankowitz “
over
and beyond
”
what could or should be expected of such a supporting affidavit.
[12]
I could also not find any
authority on the question as to whether a plaintiff (subsequent to
the amendment to the rule), in an attempt
to show that the defences
pleaded in the defendant’s plea is not
bona fide
, should
be allowed to attach documentation to the supporting affidavit as
proof of the contentions made by the plaintiff or not.
This was indeed the case
in the present matter and was one of the reasons for the concerns
raised on behalf of the defendent.
34.
It is correct that
Rule
32(4)
of the Rules provides as
follows:
“
No
evidence may be adduced by the plaintiff otherwise than by the
affidavit referred to in sub-rule (2)…
”
(My
omissions)
The
existing authorities in respect of the above
Rule
32(4)
that I could find, however
all date prior to the amendment to
Rule
32
and are not of much assistance
in answering the question as to whether a plaintiff should be allowed
to tender evidence and specifically
documentary evidence in his/her
supporting affidavit in summary judgment proceedings in terms of the
new regime.
35.
I
hold the view that, in view of the amendment to
Rule
32
and specifically in view of the fact that more is expected of a
plaintiff in summary judgment proceedings post-amendment, a more
liberal approach is necessary in as far as the allowance of
additional evidence is concerned as long as the evidence that is
provided
by the plaintiff serves only to support the contentions by
the plaintiff as to why the defences as pleaded by the defendant, do
not raise issues for trial and in the event of this evidence being
documentary in nature, same is attached to the supporting affidavit
so that the defendant in the matter is in a position to answer
thereto.
[13]
36.
I hold the view further that such an
approach would better enable the Court to decide as to whether the
matter should proceed to
trial by virtue of the fact that a
bona
fide
defence was raised by the
defendant, or whether the doors of the Court should be closed on the
defendant by virtue of the fact
that the defences that were raised,
were sham defences with the sole purpose to delay.
37.
I am of the view that such a liberal
approach will still ensure a speedy result in the matter which has
always been the primary
purpose of summary judgment proceedings and
if the defendant is of the view that he/she does have a
bona
fide
defence to the claim, he/she is
still entitled to answer to the facts and even the evidence provided
in the (more comprehensive)
supporting affidavit.
38.
In view of the above, I am of the view that
the annexures attached to the supporting affidavit in the Application
serves the above
purpose(s) and I am therefore inclined to disagree
with the contentions on behalf of the defendant in this instance and
to allow
the plaintiff’s supporting affidavit in the present
matter as is.
LEGAL
POSITION IN RESPECT OF THE ANSWERING PAPERS
:
39.
The
Court has held in the matter of
Tumileng
Trading
that, despite the amendment to
Rule
32
of the Rules, what is required from a defendant in the answering
affidavit in summary judgment proceedings has remained essentially
the same and
“…
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.
”
[14]
40.
The
consequence of the above is therefore that the well-known principles
as laid down in
inter
alia
the matters of
Maharaj
v Barclays National Bank Ltd
[15]
and
Breitenbach
v Fiat SA (Edms) Bpk
[16]
therefore still finds application.
41.
It
is trite therefore that a defendant should, in his answering
affidavit in summary judgment proceedings, fully disclose the nature
and grounds of his defence and the material facts upon which it is
founded and this defence should at the very least be
bona
fide
and good in law
[17]
and not
inherently and seriously unconvincing.
[18]
42.
A
defendant’s defence should furthermore be set out in such a way
and with such particularity and completeness that the Court
would be
able to determine whether a
bona
fide
defence is disclosed.
[19]
43.
It has also been held:
“…
that
the statement of material facts be sufficiently full to persuade the
Court that what the defendant has alleged, if it is proved
at the
trial, will constitute a defence to the plaintiff’s claim …
if the defence is averred in a manner which appears
in all the
circumstances to be needlessly bald, vague or sketchy, that will
constitute material for the Court to consider in relation
to the
requirement of bona fides.
”
[20]
(My
omissions)
44.
In
Tumileng
Trading
the learned Binns-Ward J considered the principle that a defendant’s
answering affidavit should not be examined by the standards
of
pleadings and came to the conclusion that although more may be
expected of a defendant now than previously, it does not mean
that
the intention behind the amendment was to make the procedure more
“
draconian
or drastic
”
than it used to be.
[21]
Binns-Ward
J then concludes that:
“
Had
such a signal change been intended, it seems unlikely that subrule
32(3) would have been left substantively in the same form
that it
used to have. I would have expected any change in what was required
of the defendant’s opposing affidavit to be accompanied
by the
introduction of other changes to bring our procedure more in line
with that in jurisdictions in which the courts are able
to give
directions that enable the genuineness of the advanced defences to be
further explored before summary judgment is granted
or refused…
”
[22]
THE
PLAINTIFF’S CLAIM
:
45.
The plaintiff’s claim is essentially
based on the following:
45.1
A mortgage loan agreement entered into between the parties on or
about 6 February 2017 in
terms whereof an amount of R1
500 000.00 was advanced by the plaintiff to the defendant;
45.2
A term loan agreement entered into between the parties on or about
26 November 2015 and
in terms whereof the plaintiff afforded a
loan in the amount of R2 500 000.00 to the defendant; and
45.3
An overdraft facility agreement entered into between the parties in
terms whereof (essentially)
the defendant was afforded an overdraft
facility, as from 23 December 2020, in the amount of R1
000 000.00 on the defendant’s
existing cheque account.
46.
The plaintiff alleges that the defendant is
in breach of the above agreements as the defendant had failed to make
timeous payments
of the installments due in terms of the agreements,
which resulted therein that the defendant is indebted towards the
plaintiff
in the amounts claimed from the defendant in the action.
47.
The
plaintiff furthermore alleges that it properly complied with the
relevant provisions of The National Credit Act
[23]
(herein after referred to as “
the
NCA
”).
THE
DEFENDANT’S DEFENCES
:
48.
It should be mentioned that, at the
commencement of his argument, I enquired from Mr Jankowitz whether
the conclusion of the above
agreements and the non-payments as
alleged were in dispute since it appeared from the defendant’s
plea that same was not.
Mr
Jankowitz confirmed that the above was not in dispute, but also
confirmed that the defendant will persist with his defences as
set
out in the plea and indeed also in the answering affidavit for
purposes of the application.
49.
These defences, in summary, are as follows:
49.1
That the supporting affidavit relied upon by the plaintiff in the
application, goes beyond the
boundaries as prescribed by
Rule
32(2)
of the Rules, in that the supporting affidavit seeks to
introduce evidence (by way of attaching certain documents to the
affidavit)
which would result in the application becoming a “
mini
trial
” (“
the Defective Affidavit Defence
”);
49.2
That the plaintiff entered into the above agreements with the
defendant without conducting either
the required risk assessment or
the required assessment as to the defendant’s financial means
and repayment history and that
the conclusion of the agreements
ultimately boils down to the affording of credit to the defendant
under circumstances where it
was reckless to do so (“
the
Reckless Credit Defence
”);
49.3
That the plaintiff failed to adhere to the provisions of
Section
129
of the NCA by failing to show that proper service of the
said notice was effected on the defendant (“
the Section 129
Defence
”); and
49.4
That the failure of the defendant to make regular and/or timeous
payments of the installments
in terms of the agreements, was due to
the fact that the plaintiff had afforded the defendant a payment
holiday in terms of an
oral agreement that was concluded between them
and that the defendant is therefore not indebted towards the
plaintiff in the amounts
claimed (“
The Payment Holiday
Defence
”).
50.
The question that this Court now needs to
answer is whether the above defences (or any one of them) raise a
triable issue which
would prompt this Court to dismiss the
application and order the matter to proceed to trial.
The
Defective Affidavit Defence
:
51.
I have already dealt with this issue herein
above and based on my points of view set out above, I am of the view
that this defence
raised by the defendant does not cut mustard and
cannot be regarded as a defence that raises a triable issue.
The
Reckless Credit Defence
:
52.
Mr van Tonder argued with conviction on
behalf of the plaintiff that this particular defence raised by the
defendant, should not
be regarded as a
bona
fide
defence since the allegations made
by the defendant in this regard were done so without reference to any
factual basis upon which
the allegations are based.
53.
The allegation by the defendant is
therefore denied by the plaintiff and it appears, from the
documentation attached to the plaintiff’s
supporting affidavit,
that the plaintiff did in fact take cognizance of certain documents
which placed it in a position to assess
the relative financial
strength of the defendant as well as the defendant’s ability to
repay the amounts in terms of the
agreements in question.
54.
Seeing
that a credit provider is to a great extent free to determine the
ways in which a risk assessment is to be done
[24]
,
I cannot find the measures used by the plaintiff in this regard to be
insufficient or improper.
55.
What is interesting is that the defendant,
by way of his answering affidavit, elects not to deal with the
averments made by the
plaintiff in the supporting affidavit in
respect of the assessments that were done and specifically in respect
of the documentation
used for that purpose.
The
defendant,
inter alia
,
does not deny:
55.1
The existence of the documents attached to the plaintiff’s
supporting affidavit;
55.2
The averment made by the plaintiff that these documents were used in
assessing the defendant’s
financial situation and/or his
ability to repay the loans;
55.3
The plaintiff’s averment that the plaintiff, based on these
documents, was satisfied that
the loans made to the defendant were
not reckless; and
55.4
The averment made by the plaintiff that the agreements were concluded
long before the defendant
allegedly fell on hard times and that,
prior to the defendant allegedly falling on hard times, the defendant
never objected to
the loans on the basis that the credit was extended
recklessly.
56.
In
view of the above I consequently hold the view that the Reckless
Credit Defence is not only sketchy
[25]
but that it may very well be characterized as a sham defence in that
it has no merit.
[26]
The
Section 129 Defence
:
57.
Mr Jankowitz argued on behalf of the
defendant that the plaintiff failed to adhere to the provisions of
Section 129
of the NCA in that the plaintiff did not serve the required notice on
the defendant properly.
58.
Mr Jankowitz’s primary complaint, if
I understood him correctly, is that the required notice (herein after
referred to as
“
the Section 129
Notice
”) was served upon the
defendant by way of affixing and not, as is required by the NCA, by
way of registered mail or service
on an adult person at the address
appointed by the defendant.
59.
Mr van Tonder simply argued that the above
defence should not be accepted as
bona
fide
based thereon that:
59.1
The defendant never alleged that the Section 129 Notice did not in
fact come to his attention;
and
59.2
The defendant never stipulated the exact manner in which the
plaintiff did not comply with the
provisions of
Section 129
of the NCA.
60.
In the particulars of claim, the plaintiff
inter alia
pleads as follows:
“
The
Default Notice … was served by the Sheriff of the High Court
on the defendant at his chosen domicilium citandi et executandi
being
Perseel 110, Sultanaoord, Karos Settlements, Upington …
”
(My omissions)
and
further
“
A
reasonable consumer (in the position of the defendant), would have
acted on the Default Notice which was duly served on him.
”
61.
In answer to the above, the defendant does
not deny receipt of the Section 129 Notice in his plea but simply
notes the above facts
as pleaded by the plaintiff and then, in as far
as the Section 129 Notice is concerned, pleads:
“
Defendant
subsequently pleads that plaintiff has not complied with the
peremptory provisions of Section 129 of the National Credit
Act and
is, therefore, not entitled to enforce the credit agreements.
”
62.
In his answering affidavit in the
application, strangely enough, the defendant again fails to take his
case any further by failing
to deny either service or receipt of the
Section 129 Notice or by setting out in which manner the plaintiff
had allegedly flaunted
the provisions of
Section
129
of the NCA.
63.
It is only in the Heads of Argument and
during argument on behalf of the defendant that the issue of improper
service was raised
but this, in my view, is unfortunately a case of
“
too little too late
”.
64.
The Court, as was already alluded to herein
above, has to assess the defences raised by a defendant by looking at
the contents of
the answering affidavit and nowadays also the plea.
65.
In
this instance I find the Section 129 Defence as set out in the plea
and answering affidavit of the defendant to be bald and vague
and
also devoid of
bona
fides
as this defence was apparently raised only with the intention to
delay the action and to stand in the way of the plaintiff in claiming
his relief.
[27]
The
Payment Holiday Defence
:
66.
In his plea, the defendant pleads that the
terms of the agreements as pleaded by the plaintiff in the
Particulars of Claim, were
not the only terms of the agreements and
then pleads, in summary, that the defendant entered into an oral
agreement with the plaintiff,
represented by an authorized (but
unidentified) representative of the plaintiff in terms whereof and as
a result of certain hardships
suffered by the defendant, the
plaintiff would afford the defendant a payment holiday as from April
2020 up and until December
2022 where after the defendant’s
financial position and the terms of the agreements will be reassessed
and/or restructured.
67.
In the supporting affidavit, the plaintiff
denies the above Payment Holiday Defence based thereon:
67.1
That the plaintiff did not agree to a payment holiday of more than 2½
years or at all
during which period the plaintiff would not receive
any payments, as this would be against accepted banking practice and
would
be prejudicial to the plaintiff; and
67.2
That the defendant fails to plead the identity of the alleged
representative of the plaintiff
and also fails to plead that this
representative was duly authorized to enter into an agreement which
would amend the initial credit
agreements.
68.
More importantly to the above, the point
was taken by the plaintiff in the supporting affidavit that the
defendant should not be
allowed to rely on the alleged oral agreement
by reason of a non-variation clause contained in a facility letter,
which was incorporated
into the above-mentioned Mortgage Loan
Agreement as well as similar non-variation clauses contained in the
other agreements.
69.
The defendant again fails to deal with the
above contentions made by the plaintiff in any sort of detail in his
answering affidavit
and simply repeats the contents of the plea and
then adds:
“
The
applicant now herein merely denies the validity of such an
agreement
[28]
yet does not deny the existence thereof.
”
This
last-mentioned contention made by the defendant is clearly not
correct as the plaintiff, on at least two occasions in the supporting
affidavit, specifically and categorically denies the existence of the
oral agreement.
70.
Mr
van Tonder argued for the plaintiff that the Payment Holiday Defence
does not raise a triable issue by virtue of the fact that
the alleged
oral agreement would be
contra
the above-mentioned non-variation clauses.
[29]
During
his argument on the issue, Mr van Tonder unsurprisingly referred me
to the well-known
Shifren
principle
that was adopted by the Supreme Court of Appeal in the matter of
SA
Sentrale Ko-op Graanmaatskappy Bpk v Shifren & Andere
[30]
in terms whereof a purported oral amendment of an agreement,
contra
to a stipulation in the agreement to the effect that all amendments
should be in writing, is deemed to be void.
[31]
71.
Mr
Jankowitz in turn and whilst acknowledging the above
Shifren
principle, urged me to consider the minority judgment in the recently
decided matter of
Ba-Gat
Motors CC t/a Gys Pitzer Motoring & Another v Kempster Sedgwick
(Pty) Ltd
[32]
and he also referred me, in his heads of argument, to the matter of
Buffet
Investments Services (Pty) Ltd & Another v Band &
Another
.
[33]
72.
In this instance I deem it necessary to
revisit the defendant’s plea with specific reference to what is
pertinently pleaded
in as far as the Payment Holiday Defence is
concerned.
The
defendant pleads as follows in as far as the above-mentioned mortgage
loan agreement is concerned:
“
7.3
It is specifically pleaded by the
defendant that the plaintiff, as represented by an authorized
representative, and the defendant, as represented by himself, during
or about March/April 2020 and at Upington, concluded an oral
agreement, premised on the following expressed, alternatively tacit,
alternatively implied terms:
7.3.1
The plaintiff acknowledged that the defendant as an agricultural
farmer had suffered immense losses
to its harvest due to unforeseen
events, including frost, rain and the Covid 19 pandemic;
7.3.2
Due to the hardships suffered by the defendant, the plaintiff would
granted (sic) the defendant a
payment holiday up and until the end of
2022;
7.3.3
This payment holiday would commence in April 2020 and continued (sic)
up and to December 2022;
7.3.4
The defendant would remain responsible for the interest accrued
during this payment holiday period;
7.3.5
The plaintiff would reassess the financial position of the defendant
in January 2023, whereafter
the parties would either continue with
the terms of the agreement, including payment, alternatively the
plaintiff would in agreement
with the defendant restructure the terms
of payment, alternatively assist the defendant to sell his properties
through its HelpUsell
portal.
7.4
These terms were accepted by both the plaintiff and the defendant.
”
The
above alleged additional terms of the agreement is repeated in
paragraph 15 (in respect of the above term loan agreement) and
paragraph 27 (in respect of the above overdraft facilities agreement)
of the plea.
73.
The defendant then proceeds in his plea to
deny, based on the above alleged additional terms, that he is in
breach of the various
agreements and that he is liable towards the
plaintiff in the amounts claimed.
The
defendant specifically pleads as follows in paragraph 29 of the plea:
“
29.1
It is denied that the defendant is in breach of the Mortgage Bond
Agreement or the Term Loan Agreement
or the Overdraft Facility
Agreement.
29.2
The defendant denies that the full outstanding balance on the
agreements have (sic) become
due and payable to the plaintiff.
29.3
The defendant repeats the content of paragraph 7, 15 and 27 above.
29.4
The defendant specifically pleads
that, for the reasons advanced herein above, was the plaintiff,
in
accordance with the payment relief granted, as well as the
undertaking to reassess the financial position of the defendant,
not
entitled to issue summons.
”
The
above is repeated in two further paragraphs in the plea and also in
the defendant’s answering affidavit in the application.
74.
At the risk of repeating myself it is
therefore clear that the defendant’s pleaded defence is that he
is not liable for payment
of the amounts claimed by the plaintiff
based thereon that he was excused from making the agreed upon
installment payments in terms
of the credit agreements for a period
of almost 2½ years and that he is consequently not indebted
towards the plaintiff
in the amounts claimed.
The
defendant in the present matter does not raise an alternative defence
based on estoppel (as was the case in
Ba-Gat
Motors
) in his plea and also does
not attempt to do so in his answering affidavit.
The
possibility of a defence based on estoppel was also not pursued by Mr
Jankowitz during his argument on behalf of the defendant.
75.
In
the dissenting judgment in the matter of
Ba-Gat
Motors
,
the learned Dambuza JA, with reference to the judgment in the matter
of
HNR
Properties CC & Another v Standard Bank of SA Ltd
[34]
,
held that there is room, though small, for the defence of estoppel
founded on non-variation clauses.
[35]
Dambuza
JA in his minority judgment then proceeds and states:
“
The
nature and extent of that narrow window has not been defined by our
courts, save to say that Shifren must not be violated.
”
[36]
76.
The purpose of a non-variation clause is
trite, namely that it serves to protect the creditor as it enables
the creditor to determine
its rights with reference to existing
documentation or documentation in its possession.
The
creditor consequently does not need to rely on the memory of
employees or ex-employees and the creditor is furthermore protected
from spurious defences and unnecessary litigation.
[37]
77.
In
the matter of
Brisley
v Drotsky
[38]
the Supreme Court of Appeal confirmed the
Shifren
principle and stated
inter
alia
that to negate the said principle may lead to legal uncertainty and
also that the principle does not create an unreasonable straight
jacket.
[39]
The
Court then proceeded in holding that a Court does not have the
discretion to refuse to enforce validly concluded terms of a
contract.
[40]
78.
What is of further significance is the
following comments made by the learned Cameron JA in a minority
judgment in the matter of
Brisley
:
“…
the
appellant asks this Court to reverse the doctrine that contracting
parties may validly agree
in writing
to an enumeration of their rights, duties and powers in relation to
the subject matter of a contract, which they may
alter only by again
resorting to writing, This Court nearly four decades ago upheld the
validity of such clauses. It did so after
years of academic and
judicial controversy, and after full argument, which canvassed the
opposing contentions…
The
appellant’s attack invites us to reconsider that decision. We
are obliged to do so in the light of the Constitution and
of our
‘general obligation’, which is not purely discretionary
to develop the common law in the light of fundamental
constitutional
values.
For
the reasons the joint judgment gives, I do not consider that the
attack van or should succeed. The Shifren decision represented
a
doctrinal and policy choice which, on balance, was sound. Apart from
the fact of precedent and weighty considerations of commercial
reliance and social certainty, that choice in itself remains sound
four decades later. Constitutional considerations of equality
do not
detract from it. On the contrary, they seem to me to enhance it…
The
jurisprudence of this Court has already established that, in addition
to the fraud exception, there may be circumstances in
which an
agreement, unobjectionable in itself, will not be enforced because
the object it seeks to achieve is contrary to public
policy…
It
is not difficult to envisage situations in which contracts that
offend these fundamentals of our new social compact will be struck
down as offensive to public policy. They will be struck down because
the Constitution requires it, and the values it enshrines
will guide
the courts in doing so…
What
is evident is that neither the Constitution not the value system it
embodies give the courts a general jurisdiction to invalidate
contracts on the basis of judicially perceived notions of unjustness
or to determine their enforceability on the basis of imprecise
notions of good faith.
”
[41]
79.
In light of the above authorities
therefore, it appears that the
Shifren
principle is still accepted by our Courts and that said principle
will, as a general rule be applied, unless it could lead to an
injustice or an outcome that is against the public policy.
This
is acknowledged in the majority judgment in
Ba-Gat
Motors
which, as was rightfully
conceded to by Mr Jankowitz, did not assist the defendant’s
case much.
It
should also be stated that the matter of
Buffet
does
not assist the defendant either since the learned Mokgohloa J, in
considering whether an oral waiver might be effectual despite
the
existence of a non-variation clause, came to the conclusion that an
oral waiver may be valid, but only to the party in regard
to a right
that accrues to such a party exclusively in terms of the contract and
on the basis that the terms of the agreement was
to the sole benefit
of the plaintiffs.
[42]
This
is of course not the case in the present matter as the alleged oral
agreement, on the face of it as pleaded by the defendant,
is to the
sole benefit of the defendant.
80.
The defendant, in the present case, did not
plead or raise a defence to the effect that, if the relevant
non-variation clause is
enforced by the Court, it will lead to an
injustice or to an outcome that is against public policy and Mr
Jankowitz also did not
argue as much.
The
defendant, as was already mentioned, also did not seem to raise any
sort of defence based on estoppel.
81.
Coupled to the above, it should be stated
that it is still uncertain as to the identity of the alleged
representative of the plaintiff
with whom the oral agreement was
concluded.
82.
Although I am aware thereof that certain
banks did afford clients the possibility of payment holidays on
credit agreements during
the COVID-19 pandemic in 2020, I have to
agree with Mr van Tonder’s argument, namely that a defence that
the plaintiff would
agree, orally no less, to a payment holiday for a
period of almost 2½ years in terms whereof there are not
obvious advantages
to the plaintiff, borders on a sham defence.
83.
What is also interesting and telling is
that the defendant specifically pleads that, despite the alleged
payment holiday afforded
to the defendant by the plaintiff, the
defendant remained liable for payment of the accrued interest on the
credit agreements during
this period.
The
defendant however never pleads that it did in fact make payments in
the amounts of the accrued interest during the period of
the alleged
payment holiday.
84.
In view of all of the above, I consequently
hold the view that the Payment Holiday Defence does not constitute a
bona fide
defence and that it similarly does not raise an issue for trial.
COSTS
:
85.
I can find no reason why the costs should
not follow the result in this matter and why the plaintiff should not
be awarded its costs
as prayed for.
ORDER
:
86.
In view of all of the above, the following
order is made:
(1)
THE LATE FILING OF THE DEFENDANT’S
ANSWERING AFFIDAVIT IN THIS APPLICATION FOR SUMMARY JUDGEMENT IS
HEREBY CONDONED;
(2)
SUMMARY JUDGMENT IN GRANTED IN
FAVOUR OF THE PLAINTIFF AND AGAINST THE DEFENDANT FOR:
(2.1)
PAYMENT IN THE AMOUNT OF R1 589 187.81;
(2.2)
PAYMENT OF INTEREST ON THE AMOUNT OF R1 589 187.81 AT A
RATE OF 9,75% LINKED, PER
ANNUM, CAPITALIZED MONTHLY FROM 21
SEPTEMBER 2022 TO DATE OF PAYMENT;
(2.3)
PAYMENT IN THE AMOUNT OF R3 339 659.28;
(2.4)
PAYMENT OF INTEREST ON THE AMOUNT OF R3 339 659.28 AT A
RATE OF 9,75% LINKED, PER
ANNUM, CAPITALIZED MONTHLY FROM 21
SEPTEMBER 2022 TO DATE OF PAYMENT;
(2.5)
PAYMENT IN THE AMOUNT OF R831 974.24; AND
(2.6)
PAYMENT OF INTEREST ON THE AMOUNT OF R831 974.24 AT A RATE OF
9,75% LINKED, PER ANNUM,
CAPITALIZED MONTHLY FROM 21 SEPTEMBER 2022
TO DATE OF PAYMENT; AND
(3)
PAYMENT BY THE DEFENDANT OF THE
COSTS OF SUIT ON A SCALE AS BETWEEN ATTORNEY AND CLIENT.
ACTING JUDGE AD
OLIVIER
HIGH COURT OF SOUTH
AFRICA
NORTHERN CAPE DIVISION
KIMBERLEY
Counsel
for the applicant:
ADV AG VAN TONDER
Instructed
by:
Tim
du Toit & Co. Inc.
Cape Town
c/o
Majiedt
Swart Inc.
Kimberley
Counsel
for the respondent:
ADV DC JANKOWITZ
Instructed
by:
Willemse
& Babinszky Attorneys
Upington
c/o
Engelsman
Magabane Inc.
Kimberley
[1]
Rule
32(2)(a)
of
the Rules
[2]
See
Rule
32(2)(a)
of
the Rules
[3]
[2020]
JOL 47144
(WCC). Also see the matter of
Raumix
Aggregates (Pty)
Ltd
v Richter Sand CC & Another
[2019] JOL 45983
(GJ) at
paragraph [22]
[4]
Tumileng
Trading
,
supra
at
pages 4 and 5
[5]
Tumileng
Trading
,
supra
at
page 8
[6]
Tumileng
Trading
,
supra
at
page 10
[7]
Tumileng
Trading
,
supra
at
page 11
[8]
Than
what would have been the position before the amendment to the Rule
[9]
Also
see the matter of
Standard
Bank of South Africa v Rahme & Another
[2019]
ZAGPJHC 287 (SAFLII Reference), at paragraph [8]
[10]
See
Raumix
Aggregates
,
supra
at
paragraph [16]
[11]
Except
of course the requirements as set out in the rule itself
[12]
This
question is not dealt with or answered in the matter of
Saglo
Auto (Pty) Ltd v Black Shades Investments (Pty) Ltd
[2020]
ZAGPPHC 808 (SAFLII Reference)
[13]
Also
see the matter of
Meredith
v Moodley
[2023]
ZAGPJHC 176 (SAFLII Reference) at paragraph [24]
[14]
See
Tumileng
Trading
,
supra
at
page 7
[15]
1976
(1) SA 418 (A)
[16]
1976
(2) SA 226 (T)
[17]
See
Maharaj
,
supra
at
page 426
[18]
See
Breitenbach
,
supra
at
page 228
[19]
See
Maharaj
,
supra
[20]
Breitenbach
,
supra
[21]
Tumileng
Trading
,
supra
at
page 12
[22]
Supra
[23]
Act
34 of 2005
[24]
See
Section
82(1)
of
the NCA
[25]
See
Breitenbach
,
supra
at
page 228
[26]
Joob
Joob Investments (Pty) Ltd v Stocks Mavundla Zek Joint Venture
[2009]
3 All SA 407
at paragraph [31]
[27]
See
Breitenbach
,
supra
.
Also see the matter of
NPGS
Protection and Security Services CC & Another v Firstrand Bank
Limited
[2019]
3 All SA 391
(SCA) at paragraph [14]
[28]
Reference
is made to the alleged oral agreement.
[29]
It
should be mentioned that the existence of the non-variation clause
was never denied
[30]
[1964]
4 All SA 520 (A)
[31]
See
Shifren
,
supra
at
pages 523 and 524
[32]
[2023]
JOL 61479
(SCA)
[33]
[2009]
JOL 24368 (KZD)
[34]
2004]
1 All SA 486 (SCA)
[35]
Ba-Gat
Motors
,
supra
at
paragraph [33]
[36]
Ba-Gat
Motors
,
supra
.
[37]
See
Tsaperas
& Others v Boland Bank
[1995] ZASCA 150
;
[1996]
4 All SA 312
(SCA) at page 315
[38]
2002]
JOL 9693 (A)
[39]
Brisley
,
supra
at
paragraphs [8] and [9] of the majority judgment
[40]
Brisley
,
supra
at
paragraph [12] of the majority judgment. Reference is also made to
the matter of
Magna
Alloys and Research (SA) (Pty) Ltd v Ellis
[1984] ZASCA 116
;
[1984]
2 All SA 583
(A) where the Supreme Court of Appeal, on page 597 of
the judgment, confirmed that general principle that it is in the
public
interest that parties should be held bound to contracts that
were concluded by them.
[41]
Brisley
,
supra
at
paragraphs [2] to [6] of the minority judgment of Cameron JA
[42]
See
Buffet
,
supra
at
paragraph [12]