[3] The principal liability comprises the following transactions concluded between
the Bank and DSCM : instalment sale agreements in respect of 164 vehicles
subject to a Master Instalment Sale Agreement; rental agreements in respect of
135 vehicles subject to a Master Rental Agreement; a Fleet Management
facility; an overdraft facility with a credit limit of R800 000; a Vehicle and Asset
Finance facility with a credit limit of R14.9 million; a Liquidating Credit facility with
a credit limit of R7 382 100; a Fleet Management Services facility with a credit
limit of R 500 000.
[4] In terms of the two guarantees relied on which were concluded on 17 November
2022 ( the first guarantee) and 27 February 2023 (the second guarantee)
respectively, the respondent guaranteed and undertook , as a principle and
independent obligation in favour of the Bank in respect of all debts which DSCM
owed or may in the future owe in connection with agreements between the Bank
and DSCM. Recovery under the first guarantee was limited to 25 million together
with interest and costs and to R47.8 million together with interest and costs under
the second guarantee.
[5] The Bank alleges that DSCM defaulted on the agreements and has produced
certificates of balance in respect of the indebtedness under the guarantees for
the amounts claimed.
[6] This indebtedness is challenged only by way of the raising of legal points under
rule 6(5)(d)(iii).
The points taken
[7] The defendant raises the following arguments:
a. The Bank has not proved that it is a registered credit provider for the period
under which the guarantee was concluded in that it has neglected to file a
certificate for all relevant periods affecting the span of the agreements.
b. Whilst all the agreements have , on their face , been terminated due to
effluxion of time, the Bank allowed the principal debtor to stay in possession
of some of the rented vehicles for “many months” whilst still accepting
rental payments from the principal debtor which brought about a tacit
relocation of some the lease agreements.
c. Clause 1.3 of each of the guarantees states that the respondent shall
immediately pay, on receipt of a first written demand from the Bank , “all or
any cash flow shortfalls” recorded in the demand. The defendant contends
that because the demand only sets out the amount owing and does not
specifically make reference to the term “cash flow shortfalls” this renders
the demand “fatally defective”.
d. The Bank provides no proof that it afforded the principal debtor 7 days to
remedy the breach as provided for in the agreements before instituting the
proceedings.
e. Whilst the Bank states that the respondent provided it with the guarantees
it “fails to make the necessary allegations as to how the guarantees were
signed”. The respondent points out that the signatures appearing on each
of the guarantees look different and that they seem to be electronic.
[8] The defendant seeks that if the points or any of them do not succeed that he be
allowed to file an answering affidavit.
[9] I will deal serially with the law points raised.
The Bank has not attached proof of it being a credit provider for the relevant
period.
[10] The Bank’s assertion that it is a credit provider, in the absence of evidence to the
contrary or a substantive raising of this dispute, suffices.
[11] In any event, the NCA does not apply to any of the agreements as the principal
debtor is a juristic person whose annual turnover and net asset value at the time
when each of the agreements were concluded exceeded the threshold of R 1
million provided for in Section 4(1)(a)(i) read with Section 7(1) of the Act.
Tacit relocation
[12] It is not disputed that the rental agreements have, on their face, terminated due
to effluxion of time.
[13] The defendant raises that the Bank allowed the principal debtor to stay in
possession of the vehicles for “many months” after the expiry of the agreements
whilst still accepting rental payments. He thus, contends for tacit relocation of the
lease agreements.
[14] He concedes that of the 135 rental agreements only 97 were then terminated by
notice thus leaving the remaining 38 tacitly relocated leases extant. Thus , in
respect of those leases there is no termination.
[15] There is no evidence that the Bank continued accepting rental payments. This is
the onus of the defendant to establish. Thus, no defence is made out on this
basis.
Failure to not specifically make reference to the term “cash flow shortfalls”
[16] Clearly the demand s properly and sensibly construed are for a shortfall in
payment.
No proof of the affording of 7 days before institution of action
[17] Again, the premature institution of action is a matter which would have to have
been raised by the defendant with a factual basis. This has not been done.
Failure to allege details as to the signatures
[18] Again, it suffices for the Bank to have raised that the guarantees were given to it
for the principal indebtedness. If the signature of the documents is disputed this
is for the defendant to raise and prove.
Discussion
[19] All the points raised are without merit.
[20] It seems to me that the opposition to the claim is an exercise in delay. There is
no defence raised on the merits.
[21] The decision to not file an affidavit shapes the extent of the argument s. The
points raised purport to be like an exception – i.e. if submissions are not
substantiated with documentary evidence , then the Bank has not made out a
case.
[22] This approach fails to take account of the fact that application proceedings
require engagement with evidence. The failure to raise real disputes on the facts
or issues of law which have substance is fatal to the defence.
Request for the right to file an affidavit.
[23] It is sought by the respondent that he should now be given the opportunity to file
an answering affidavit. The application is brought, informally, from the Bar.
[24] A court has a discretion in relation to allowing the filing of an affidavit. A court will
however be loath to exercise this discretion if it is of the view that that the
respondent is acting mala fide. To my mind this is manifestly the case here.
[25] There is no explanation for the failure to file an affidavit on the merits in the first
place and, given the obvious lack of merit in in the purported law points raised,
this court can only reach the conclusion that the request to file an answering
affidavit is merely a further manifestation of attempts to delay the process.
Costs
[26] The agreements in issue provide for recovery of attorney and client costs
Order
[27] The respondent is ordered to pay to the applicant:
Heard:
Delivered:
For the Applicant:
Adv.A.J Venter
For the Respondent:
Adv. N Strydom
3/9/25
15/9/25
Instructed by
Martins Weir- Smith
Instructed by
Hahn & Hahn Attorneys