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IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG LOCAL DIVISION, JOHANNESBURG
CASE NO: 2022- 024180
(1) REPORTABLE: NO
(2) OF INTEREST TO OTHER JUDGES: NO
(3) REVISED: YES
06.01.2024
In the matter between:
FIRSTRAND BANK LIMITED
TRADING AS FIRST NATIONAL BANK
(Registration number: 1929/001225/06) Plaintiff
and
SIGNATURE BAKERY (PTY) LIMITED (Registration number: 2015/100244/07) First Defendant
MOHAMED R VARIAWA Second Defendant
(Identity number: 6 […])
Delivered: 6 January 2025 – This judgment is handed down electronically by
circulation to the parties' representatives via email, upload ing it to CaseLines and
releas ing it to SAFLII.
ORDER
2
1. The second defendant shall pay the plaintiff ’s costs in the application to
postpone the summary judgment application.
2. The late delivery of the second defendant’s affidavit opposing summary
judgment is condoned.
3. Summary Judgment is granted against the second defendant for:
3.1. Payment of R312 717.89.
3.2. Interest on the above amount at the prime lending rate plus 9.25% ,
calculated daily on the outstanding balance and capitalised monthly in arrears from 1 August 2021 to the final payment date.
3.3. Costs of the action on the attorney and client scale.
JUDGMENT
BESTER AJ:
[1] The plaintiff, FirstRand Bank Limited trading as First National Bank, sued the
first defendant, Signature Bakery (Pty) Ltd, and the second defendant, Mohamed
Variawa, for payment of R312 717.89 plus interest . The claims rely respectively on
an overdraft facility and a surety ship.
[2] The first defendant does not defend the action, and an application for default
judgment is pending. The second defendant opposes the action. On 6 December
2022, the plaintiff launched an application for summary judgment against the second
defendant , which is opposed. The opposing affidavit was delivered out of time. The
plaintiff opposes the condonation application for the late delivery of the affidavit.
[3] Shortly before the date set for the hearing of the summary judgment
application, the second defendant delivered an application to postpone the hearing.
The plaintiff opposes that application as well .
3
The postponement application
[4] The plaintiff delivered its practice note and heads of argument in July 2023.
On 11 October 2023, the second defendant’s attorneys withdrew from the matter without having filed a practice note and heads of argument .
[5] On 25 June 2024, the plaintiff’s attorneys served the notice of set down of the
opposed summary judgment for 2 September 2024 on the second defendant. This
elicited no response from the second defendant. On 16 August 2024, the plaintiff’s
attorneys sent a proposed joint practice note to the second defendant and asked for
his comments thereto by 19 August 2024. This communication also did not elicit any
response from the second defendant.
[6] On Thursday, 27 August 2024, the second defendant delivered an application
to postpone the hearing of the application to allow him to obtain legal representation.
[7] The Constitutional Court held in Lekolwane
1:
“The postponement of a matter set down for hearing on a particular date
cannot be claimed as a right. An application for a postponement seeks an
indulgence from the court. A postponement will not be granted unless this
court is satisfied that it is in the interests of j ustice to do so. In this respect the
applicant must ordinarily show that there is good cause for the postponement.
Whether a postponement will be granted is therefore in the discretion of the court. In exercising that discretion, this court takes into account a number of
factors, including (but not limited to) whether the application has been timeously made, whether the application given by the applicant for
postponement is f ull and satisfactory, wheth er there is prejudice to any of the
parties, whether the application is opposed and the broader public interests.”
[8] This approach is followed in the high courts as well .
2
1 Lekolwane and Another v Minister of Justice and Constitutional Development 2007 (3) BCLR 280
(CC) at para 17.
4
[9] In Unitrans Fuel and Chemical3 the Full Court of this Division cautioned that
the level of detail required for an explanation does not vary with the length of the
delay.
[10] In his affidavit supporting the application to postpone the hearing, the second
defendant states that, when the plaintiff served its heads of argument and practice
note on 27 July 2023, he experienced severe financial and health problems . As a
result, he claims, he could not afford to pay counsel to prepare his heads of
argument . The second defendant does not offer any facts to support his conclusions.
In the absence of the primary facts on which they are based, secondary facts are the deponent’s conclusions and, thus, an opinion only. A witness must provide the facts,
not merely his conclusion from the facts.
4
[11] The second defendant did not provide any facts to explain the delay over the
subsequent 13 months until he delivered the application to postpo ne the hearing. He
merely states :
“However, I am arranging a loan to defend this claim. I am hopeful that I will
have funds within 4 – 6 weeks. This will allow me to pay Counsel to prepare
my heads of argument and practice note.”
[12] The second defendant provides no details supporting his hopeful outlook on
his situation . He does not explain with whom he has sought to arrange a loan and
why the funds may be available within a few weeks. He also does not explain why he
could not have done so earlier. T he second defendant is merely speculating as to his
future ability to secure funding for his legal costs.
2 See for instance Magistrate Pangarkar v Botha and Another 2015 (1) SA 503 (SCA) at paras 27 and
28.
3 Unitrans Fuel and Chemical (Pty) Ltd v Dove- Co Carriers CC 2010 (5) SA 340 (GSJ) at paras 14 to
17.
4 Willcox and Others v Commissioner for Inland Revenue 1960 (4) SA 599 (A) at 602A; Radebe and
Others v Eastern Transvaal Development Board 1988 (2) SA 785 (A) at 793C - E; and Die Dros (Pty)
Ltd and Another v Telefon Beverages CC and Others 2003 (4) SA 207 (C) at para 28.
5
[13] The second defendant has not given a full and satisfactory explanation for his
alleged need for more time and did not bring the application timeously . A
postponement will not be in the interests of justice. As a result, I refuse d the
application and allowed the hearing to proceed. There is no reason why the second
respondent should not bear the costs of the unsuccessful application.
The condonation application
[14] The second defendant delivered his opposing affidavit the day before the
initial hearing date of the summary judgment application instead of the five days required by Uniform Rule 32(3)(b).
[15] An applicant for condonation must fully explain the delay, which must cover
the entire period and which explanation must be reasonable.
5
[16] The opposing affidavit deals with condonation in a few brief paragraphs.
Although the explanation is not very convincing, I consider it in the interests of justice
to allow the opposing affidavit. As a result, the late delivery of the opposing affidavit
is condoned.
The test for summary judgment
[17] The test in a summary judgment application remains as formulated in
Maharaj
6 and Breytenbach7, even after the amendment of the rule in 2019.8
[18] In Maharaj
9 the Appellate Division explained the approach 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
5 Van Wyk v Unitas Hospital & Another 2008 (2) SALR 472 (CC) at para 22.
6 Maharaj v Barclays Bank Ltd 1976 (1) SA 418 (A) at 426A-E.
7 Breytenbach v Fiat SA Edms) Bpk 1976 (2) SA 226 (T) at 228B -H.
8 Tumileng Trading CC v National Security and Fire (Pty) Ltd 2020 (6) SA 624 (WCC) at para 13.
9 Maharaj above n6.
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decide these issues or to 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 Rule (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. ”
The defences
[19] The second defendant admits the first defendant’s breach of the overdraft
facility and that the amount claimed against the first defendant is due . He also admits
to signing the suretyship agreement. At the time, he was a director of the first
defendant. It is not apparent from the papers whether he still is. The second
defendant raised several defences to the claim against him, which I deal with in turn.
The challenge to jurisdiction
[20] The second defendant raised a special plea that the plaintiff has abused the
hierarchy of courts by bringing its claim in the High Court instead of the Magistrate’s Court because the amount of the plaintiff’s claim falls within the jurisdiction of the
Magistrate’s Court.
[21] For this reason, he contends that this Court does not have jurisdiction to
adjudicate the plaintiff’s claim . In the alternative, he pleads that the Court should
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“decline to entertain the plaintiff’s claim” . The basis for the alternative is not evident
from either the plea or the opposing affidavit.
[22] In Mpongo10 the Supreme Court of Appeal concluded that a H igh Court’s
jurisdiction is not ousted in cases where a Magistrate’s Court has jurisdiction. As a
result, the special plea does not raise a triable issue.
Ambiguous or incomplete terms of the suretyship
[23] The second defendant contends that the suretyship agreement is ambiguous
or incomplete in its terms and, therefore, is unenforceable for failing to comply with
the formal requirements of suretyship agreements.
[24] A suretyship is invalid if it does not comply with the formal requirements of
section 6 of the General Law Amendment Act 50 of 1956, which requires the terms
thereof to be embodied in a written document signed by or on behalf of the surety:
“No contract of suretyship entered into after the commencement of this Act shall be valid, unless the terms thereof are embodied in a written document
signed by or on behalf of the surety: Provided that nothing in this section
contained shall affect the liability of the signer of an aval under the laws relating to negotiable instruments.”
[25] The terms of a contract of suretyship are the identity of the creditor, the
identity of the debtor, the identity of the surety, and the nature and amount of the principal debt.
11
[26] What , then, is the defect complained of? The second defendant points to
clause 3 of the agreement , contending that it is unclear whether his liability is
unlimited or, if limited, to what amount. The clause rea ds as follows:
10 Standard Bank of South Africa Ltd and Others v Mpongo and Others 2021 (6) SA 403 (SCA) in
para 86.
11 Sapirstein and Others v Anglo African Shipping Co (SA) Limited 1978 (4) SA 1 (A) at 12 B -D;
Fourlamel (Pty) Ltd v Maddison 1977 (1) SA 333 (A) at 344 H – 345 D.
8
“3. Amount – The amount recoverable from me/us shall be
unlimited/limited to
Mr Mohamed R Variawa (Id … )12 RUnlimited ()
Plus interest or finance charges on that amount, …”
[27] It appears from the face of the document that the word “Unlimited” was typed
in next to the letter R, where the value of a limited surety would ordinarily be
inserted. Read as a whole, the clause, in my view, does not leave room for the
second defendant’s challenge.
[28] This is further borne out by clause 1 of the document, which states that the
second defendant bound himself “ for the due payment by the Debtor of all and any
monies which the Debtor may now or from time to time hereafter owe … ”.
[29] The nature and amount of the principal debt seem to me to be set out in the
agreement. In my view , the second respondent has not raised a bona fide defence
based on the formal requirements for a suretyship.
Misrepresentation
[30] The second defendant claims that the plaintiff made a misrepresentation to
him, which resulted in the suretyship being unenforceable against him.
[31] He claims that t he bank official who assisted him when he signed the
suretyship told him, before signature, that he was binding him self to a maximum
liability of R250 000.00. He cannot recall the person’s name. The second defendant
argues that the official must have known that the surety is unlimited, as he deal s with
suretyships “ on a daily basis ”. On this basis, the second d efendant reasons that the
official knowingly or negligently made a false representation.
12 Identity number omitted.
9
[32] A person is presumed to know the contents of a document they sign. In
KPMG13 the Supreme Court of Appeal approved the explanation for the presumption
in Glen Comeragh14:
'The fact that a person has put his signature to a document gives rise to a
presumption of fact that he knew what it contained. The reason given (in
Hoffmann South African Law of Evidence 2nd ed at 391) is that ''people do
not usually sign documents without reading them'' . . . It would not in my view
be at all unusual for a person signing such a document [a standard form of
contract] not to read it, whether because of laxity, unwariness, heedlessness,
or confidence in the integrity of the[offeror]. In my view, a more satisfactory
basis for the presumption of fact is that a person by his conduct in putting his
signature to a document admits that he is acquainted with its contents
(cf Knocker v Standard Bank of SA Ltd 1933 AD 128 ). The admission is not of
course conclusive, but it is sufficient to establish that fact prima facie.'
[33] The second defendant admits that he signed the agreement. He does not
state whether he read the document or not, and if not , why he did not do so. The
document clearly warns that the agreement imposes onerous obligations upon the
surety. It reflects the unlimited nature of the obligation twice, as dealt with above.
The second defendant provides no basis upon which he may be excused from not
having read the document or understood the unlimited nature thereof. As a result, I
conclude that he has not raised a triable issue.
Rectification
[34] In the al ternative to the defence that the suretyship agreement is void
because of a misrepresentation, the second defendant contends that the suretyship
agreement should be rectified because it was the parties’ common intention to limit his suretyship to R250 000.00. The proposition goes further. The second defendant
claims that the parties’ common intention was also that “ once the principal amount of
R250 000.00 was discharged by the first defendant in terms of the overdraft
13 KPMG Chartered Accountants (SA) v Securefin Ltd and Another 2009 (4) SA 399 (SCA) in para 28.
14 Glen Comeragh (Pty) Ltd v Colibri (Pty) Ltd and Another 1979 (3) SA 210 (T) at 215A – C.
10
agreement, the suretyship agreement would automatically terminate” and that it was
the intention that he would not waive his common law defences, as the document
states .
[35] These are rather extensive changes from what appears to be the plaintiff’s
standard terms of suretyship. Yet the second defendant, who bears the onus at trial to prove the true common intention of the parties ,
15 provides no detail of how any of
these terms were agreed upon. Although he does not need to prove his defence at summary judgment, he must satisfy this court that he has a bona fide defence. He
must put up facts, which, if proven at trial, will constitute an answer to the plaintiff’s
claim.
16 He has not done so, having provided his conclusions, thus his opinion,
rather than the underlying facts.
[36] I am thus not satisfied that the second defendant has raised a bona fide
defence.
Calculation of the amount owing
[37] The second defendant also contends that the calculation of the amount owed
is not set out. Hence, he cannot identify which parts relate to the principal debt and
which to costs and interest. This would be of concern if the surety were limited in any
way for which no bona fide basis has been laid. The issue needs not to be
considered further .
The National Credit Act
[38] The second defendant seeks to rely on non- compliance with sections 129 and
130 of the National Credit Act 34 of 2005 (the NCA) because these clauses are
referred to in the overdraft facility. However, from the document , it is clear that the
clauses are only relevant if the NCA regulates the agreement .
15 Soil Fumigation Services Lowveld CC v Chemfit Technical Products (Pty) Ltd 2004 (6) SA 29
(SCA) in para 21.
16 Breytenbach above note 7.
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[39] The plaintiff has attached a certificate of turnover in respect of the first
defendant, showing that the first defendant, a juristic ent ity, had a turnover above the
threshold determined in terms of Section 7(1) of the NCA and, therefore, the N CA is
not applicable, in terms of Section 4(1)(b) of that Act. The second defendant does
not challenge this evidence.
[40] A mere mention of the NCA in the document does not render it applicable.
The Legislature decides when legislation applies.
17 As a result, this argument also
does not raise a bona fide defence.
Breach notice [41] Lastly, the second defendant contends that the plaintiff did not comply with
the procedure prescribed in clause 7 of the overdraft facility agreement. The clause
provides for a procedure in the event of the first defendant being in breach of the
agreement.
[42] This proposed defence also does not assist the second defendant. His
obligation to pay under the suretyship arises upon the first defendant’s default, which he has admitted. Whether or not any further steps have been taken against the first
defendant does not influence the second defendant’s liability.
Conclusion
[43] In my view, the second defendant has not raised a bona fide defence, and
there is no reason for me to exercise my discretion against summary judgment.
[44] I make the following order:
a) The second defendant shall pay the plaintiff ’s costs in the application to
postpone the summary judgment application .
17 EJ v WJ and Another 2024 (6) SA 400 (SCA) in para 30; RMB Private Bank (A Division of
FirstRand Bank Ltd) v Kaydeez Therapies CC (in Liquidation) 2013 (6) SA 308 (GSJ) in para 15.
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b) The late delivery of the second defendant’s affidavit opposing summary
judgment is condoned.
c) Summary Judgment is granted against the second defendant for :
i) Payment of R312 717.89.
ii) Interest on the above amount at the prime lending rate plus 9.25%,
calculated daily on the outstanding balance and capitalised monthly in arrears
from 1 August 2021 to the final payment date.
iii) Costs of the action on the attorney and client scale.
A Bester
Acting Judge of the High Court of South Africa
Gauteng Local Division, Johannesburg
Heard: 2 September 2024
Judgment Date: 6 January 2025
Appearance for the Applicant: R. Carvalheira , instructed by Schuler Heerschop
Pienaar Xaba Inc Attorney s
NS Nxumalo drew the heads of argument
Appearance for the First Defendant : Unrepresented
Appearance for the Second Defendant: In person