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TEBEILE AJ:
Introduction
[1] This is an application for summary judgment brought by the plaintiff, Scania Finance
Southern Africa (Pty) Ltd, against the first, second and third defendants (“the defendants”).
The plaintiff seeks payment of the sum of R13 448 064.46, together with interest and costs
on the attorney and client scale.
[2] The application arises from a fleet finance arrangement wherein the plaintiff entered
into various written financial lease agreements with North Shore Trading 140 (Pty) Ltd
(“North Shore”), a company that was subsequently placed into liquidation. The defendants
bound themselves as sureties and co-principal debtors for the obligations of North Shore.
[3] The defendants oppose the application for summary judgment, raising several
defences:
3.1. That the plaintiff lacks locus standi due to the absence of a valid resolution
authorising the institution of proceedings;
3.2. That the plaintiff ’s claim for the unexpired term of the lease constitutes a penalty
subject to reduction under the Conventional Penalties Act 15 of 1962;
3.3. That the vehicles were sold without proper valuation and at below -market prices;
and
3.4. That the defendants have instituted third party proceedings against Tata Automobile
Corporation SA (Pty) Ltd ( “TACSA”) for a contribution and/or indemnification
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arising from TACSA ’s breach of a service and maintenance agreement, which
breach directly caused the financial collapse of North Shore.
The parties
[4] The plaintiff is Scania Finance Southern Africa (Pty) Ltd, a private company duly
incorporated under the laws of the Republic of South Africa, with its principal place of
business in Roodepoort, Gauteng. The plaintiff is a credit provider and financier of
commercial vehicles.
[5] The first defendant is Fensham Group (Pty) Ltd, a private company with its
registered address in Rustenburg, North-West Province.
[6] The second and third defendants are, Mr John Andrew Fensham and Ms Olga
Fensham, and they are both the directors of the first defendant and the sureties in this
matter.
[7] The third party, TACSA, is a company duly registered in South Africa with its
registered address in Germiston, Gauteng. TACSA was the service and maintenance
provider for the Daewoo fleet operated by North Shore.
Factual background
[8] The plaintiff concluded various written financial lease agreements with North Shore,
the principal debtor. The last agreement was entered into on 20 December 2022,
comprising general terms and conditions, transaction schedules, and a consolidation of debt
agreement concluded on 22 February 2023 . Pursuant to these agreements, the plaintiff
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granted North Shore the use and possession of 15 Scania trucks described in Schedule 1 to
the consolidation agreement. The plaintiff was entitled to receive monthly rental payments
as stipulated in the agreement.
[9] On or about October 2023, North Shore fell into arrears and was therefore in breach
of the agreement. The plaintiff addressed letters of demand to North Shore on 30 October
2023, 26 February 2024, and 29 February 2024 respectively. Notwithstanding these
demands, North Shore failed to remedy the breach.
[10] On 7 March 2024, the plaintiff communicated a notice of termination to North Shore.
After termination, North Shore voluntarily surrendered the vehicles. The plaintiff sold the
vehicles and credited the proceeds to North Shore ’s account, leaving an alleged shortfall
of about R13 448 064.46.
[11] On 23 April 2023, the directors of North Shore adopted a resolution to voluntarily
place North Shore in business rescue. The business rescue proceedings were subsequently
terminated, and on 5 September 2024, North Shore was placed in provisional liquidatio n.
A final winding-up order was granted on 31 October 2024.
[12] The plaintiff proved its claim against North Shore at the first meeting of creditors
on 10 June 2025 and now elects to claim directly from the sureties.
[13] On 27 January 2023 at Rustenburg, the defendants bound themselves as sureties and
co-principal debtors, jointly and severally and in solidum with North Shore, in favour of
the plaintiff. The Deed of Limited Suretyship includes, inter alia:
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13.1. Clause 1: The sureties bind themselves for the performance of all obligations
of North Shore to the plaintiff, past, present or future.
13.2. Clause 14: A certificate signed by any director or authorised official of the
plaintiff shall be prima facie proof of indebtedness.
13.3. Clause 28: The sureties waive the benefits of excussion, division, and de
duobus vel pluribus reis debendi.
The defendants’ defence and third party proceedings
[14] On 22 August 2025, the defendants served a special plea (challenging the plaintiff’s
locus standi) and a plea on the merits. On 12 September 2025, the defendants issued a third
party notice against TACSA in terms of Rule 13 of the Uniform Rules of Court.
[15] The defendants ’ case against TACSA is that on 25 January 2021, North Shore ,
represented by the second defendant , entered into a written service and maintenance
agreement with TACSA. The material terms of that agreement included that TACSA
would:
15.1. Perform all routine maintenance and service work on the vehicles;
15.2. Perform repairs arising from fair wear and tear;
15.3. Attend to breakdowns and be responsible for transportation to the nearest TACSA -
approved workshop; and
15.4. Perform all work with reasonable care and skill and within a reasonable period.
[16] The defendants allege that TACSA breached the service and maintenance agreement
by failing adequately to maintain and service the vehicles. They further allege that during
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the period from August 2021 to July 2024, the vehicles experienced approximately 1 357
recorded breakdowns. The defendants have attached a detailed breakdown schedule to their
papers in this application. They allege that a s a result of the alleged breakdowns, North
Shore suffered standing time, incurred additional expenses for repairs and maintenance,
lost client contracts (including the refusal of mines to allow access to the Daewoo fleet due
to failed safety inspections), and ultimately sustained damages calculated at approximately
R83 011 626.02 (calculated at an average of R18.50 per kilometre for kilometres not
travelled due to standing time).
[17] The defendants contend that TACSA ’s breach directly caused North Shore ’s
inability to service its monthly payments to the plaintiff, which in turn led to the
cancellation of the lease agreements and the institution of these proceedings.
The application for summary judgment
[18] In September 2025, the plaintiff launched this application for summary judgment.
The plaintiff ’s founding affidavit was deposed to by Ms Maureen Permal, a business
support employee of the plaintiff, who stated that she was duly authorised to depose to the
affidavit.
[19] The plaintiff submitted that the defendants’ plea raised no bona fide defence and that
the appearance to defend was entered solely for the purpose of delay. The plaintiff argued
that:
19.1. The suretyship agreement is clear and enforceable;
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19.2. the defendants have waived the benefits of excussion, division and de duobus
vel pluribus reis debendi;
19.3. The claim for liquidated damages in clause 101(c) of the lease agreement is
enforceable and not a penalty; and
32.1. The absence of a resolution is a technical defence that has been cured by the
production of a resolution authorising the proceedings.
[20] The matter was initially set down on the unopposed motion roll for 13 October 2025.
However, on 8 October 2025, the plaintiff filed a notice of removal in terms of which the
application was removed from the roll because the matter had become opposed.
[21] On 24 February 2026, Khaba AJ granted an order in an interlocutory application
compelling the defendants to file their heads of argument. The summary judgment
application was thereafter set down for hearing on the opposed motion roll and was
eventually heard on 29 April 2026 before this court.
Legal principles governing summary judgment
[22] The principles applicable to summary judgment applications are well -established
and bear repetition.
[23] Rule 32(3)(b) of the Uniform Rules of Court requires that a defendant opposing
summary judgment must satisfy the court by affidavit that he has a bona fide defence to
the action and such affidavit or evidence shall disclose fully the nature and grounds of the
defence and the material facts relied upon therefor.
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[24] In Breitenbach1it was held that the doors of the court should be closed to a defendant
only if “there is no doubt but that the plaintiff has an unanswerable case. ”2 However, the
court cautioned that this dictum goes too far in favour of defendants, and that the proper
approach is to assess whether the defendant has disclosed a reasonable possibility that the
defence may succeed at trial.
[25] In Shepstone3 Miller J held that “a defendant may successfully resist summary
judgment where his affidavit shows that there is a reasonable possibility that the defence
he advances may succeed on trial.”4
[26] In Mowschenson5 Marais J stated that the remedy of summary judgment is “an
extraordinary remedy, and a very stringent one , in that it permits a judgment to be given
without trial” and “closes the doors of the Court to the defendant”.6 This can only be done
if “there is no doubt but that the plaintiff has an unanswerable case”.7
[27] Importantly, in Maharaj8 the court correctly opined:
“The extraordinary and drastic nature of the remedy of summary judgment in its present
form has often been judicially emphasised… The grant of the remedy is based upon the
supposition that the plaintiff’s claim is unimpeachable and that the defendant’s def ence is
bogus or bad in law”9
1 Breitenbach v Fiat SA (Edms) Bpk 1976 (2) SA 226 (T) at 227E-F
2 Id at 227E-F
3 Shepstone v Shepstone 1974 (2) SA 462 (N).
4 Id at 467H.
5 Mowschenson and Mowschenson v Mercantile Acceptance Corporation of SA Ltd 1959 (3) SA 362 (W).
6 Id at 366E-F.
7 Id.
8 Maharaj v Barclays National Bank Ltd 1976 (1) SA 418 (A).
9 Id at 423F-G.
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[28] In First National Bank of SA Ltd v Myburgh and Another 10 the court held that
because of the drastic nature of summary judgment, the court has a discretion in terms of
Rule 32(5) to grant the defendant leave to defend the action, even where he has failed to
disclose fully the nature and grounds of a bona fide defence and the material facts relied
upon by him, as contemplated in Rule 32(3 )(b). It was held that t he court will grant
summary judgment only where the plaintiff has an unanswerable case , and if it has the
slightest doubt, the court will not grant summary judgment.
Analysis of the defences
Locus Standi / Absence of a resolution
[29] The defendants raised a special plea that the plaintiff has failed to annex a valid
resolution authorising the institution of these proceedings. The plaintiff submits that this
defence is without merit and not a bona fide defence because a valid resolution authorizing
the legal proceedings was provided and is attached as annexure “FA1” to the summary
judgment application. It was further submitted by the p laintiff that the defendants have
been aware of this resolution but have not withdrawn their special plea and argued that this
is merely a delaying tactic.
[30] In my view, this defence is no longer a triable issue. The plaintiff has now produced
a resolution, and the defendants did not seriously persist with this defence in argument
10 2002 (4) SA 176 (C).
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including at the hearing of the application for summary judgment . I am satisfied that the
plaintiff has locus standi to bring these proceedings. In my view, to the extent that this was
a defence, it has been cured.
The penalty clause and the Conventional Penalties Act 15 of 1962
[31] It was submitted on behalf of the defendants that clause 101(c) of the general terms
and conditions, which entitles the plaintiff to claim “an amount equal to the amounts that
would be payable for the unexpired term of lease as liquidated damages ” constitutes a
penalty as defined in the Conventional Penalties Act 15 of 1962 (“the Act”).
[32] Section 1 of the Act defines a penalty as:
“[A]ny stipulation in terms of which any person who fails to perform any act in terms of a
contract, or who performs such act late or in a defective manner, is bound to pay to another
person a sum of money or to deliver anything to another person, or to do or to refrain from
doing something, irrespective of whether such stipulation is contained in a contract which
also provides for the performance of that act.”
[33] Section 3 of the Act provides:
“If upon the hearing of a claim for a penalty, it appears to the court that such penalty is out
of proportion to the prejudice suffered by the creditor by reason of the act or omission in
respect of which the penalty was stipulated, the court may reduce the penalty to such extent
as it may consider equitable in the circumstances.”
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[34] In Claude Neon Lights (SA) Ltd v Schlemmer11 Milne J held that a claim for the full
balance of rentals for the unexpired term of a lease, without a discount for accelerated
payment, constitutes a penalty and may be reduced by the court. Milne J held that:
“It follows that in terms of sec. 3 of the Act, if it appears to the Court that
such penalty is out of proportion to the prejudice suffered by the plaintiff
by reason of the defendant’s default, the Court may, subject to the proviso
to sec.3 ‘reduce the penalty to such extent as it may consider equitable in
the circumstances’”.12
[35] The critical issue in the present case is that the defendants have not quantified the
extent to which they contend the penalty should be reduced.
[36] It was submitted on behalf of the plaintiff that t he plaintiff acted reasonably and in
good faith to mitigate its damages in that: (1) t he lease agreement and the consolidation
agreement explicitly authorised the plaintiff ( creditor) to sell the goods at its sole
discretion, by public auction or otherwise, and to credit the net proceeds to the debtor ’s
account; (2) the sale was conducted transparently, and the proceeds were credited to North
Shore’s account, resulting in the reduced claim of R13.45 million from the original R35.9
million; (3) t he counterclaim is unliquidated, speculative, and based on the defendants’
unsubstantiated opinion about market value.
11 1974 (1) SA 143 (N).
12 Id at 147D-E.
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[37] The plaintiff argued that a vague, unquantified counterclaim that is unlikely to
extinguish the main debt does not constitute a valid defence to summary judgment.
[38] It is trite that in application for summary judgment, t he question is whether there is
a reasonable possibility that the defence may succeed at trial. In my view, the defence that
clause 101(c) constitutes a penalty is a triable issue. There is a reasonable possibility that
at trial, the trial court may reduce the claim for the unexpired term of the lease under section
3 of the Act. I am of further view that, although this defence alone would not be sufficient
to resist summary judgment, it is a relevant factor to be considered together with the other
defences.
The valuation and sale of the vehicles
[39] The defendants contend that the plaintiff sold the vehicles without proper appraisals
to determine their true market value. The defendants’ plea states:
“While the vehicles were returned to Scania, there were no appraisals performed to
determine their true or reasonable market related value.”
[40] In Citibank NA, South Africa Branch v Paul NO and Another13, the court dealt with
a similar issue. In that case, the termination agreements provided that the value of the goods
would be determined either by an appraiser nominated by the bank or by the net amount
realised on a sale. The court held that parties are free to depart from common-law prescripts
13 2003 (4) SA 180 (T).
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by agreement, 14 and the credit receiver cannot insist on being credited with the actual
market value where the agreement provides otherwise.
[41] However, in Mufamadi and Others v Dorbyl Finance (Pty) Ltd 15, Smalberger JA
confirmed that a clause giving the credit grantor the right to determine the value of goods
is not necessarily contrary to public policy, provided that the clause contemplates a bona
fide valuation or sale at arm’s length16.
[42] In the present case, the defendants have raised a factual dispute about whether the
sales were conducted at arm’s length and whether the prices obtained were reasonable. The
defendants point to the weak Rand and the purported increase in the market value of
commercial vehicles. In my view, while these allegations are not fully particularised, they
are sufficient to raise a triable issue. This is a matter for evidence at trial, not for summary
judgment proceedings.
The third party proceedings against TACSA
[43] The defendants raised a defence of third party claim against TACSA. The defendants
have issued a third party notice in terms of Rule 13, seeking a contribution and/or
indemnification from TACSA on the ground that TACSA ’s breach of the service and
maintenance agreement caused North Shore’s financial demise.
14 It at para 25.
15 1996 (1) SA 799 (A).
16 Id at 803I-805B.
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[44] The defendants have provided detailed allegations in their annexure to the third party
notice, including:
44.1. The Service and Maintenance Agreement concluded between North Shore
and TACSA on 25 January 2021;
44.2. The material terms of that agreement, including TACSA's obligation to
perform maintenance and repairs with reasonable care and skill;
44.3. The alleged breach by TACSA, evidenced by approximately 1,357
breakdowns between August 2021 and July 2024;
44.4. The damages suffered by North Shore, quantified at approximately R83 011
626.02, supported by spreadsheets detailing kilometres lost and revenue lost
due to breakdowns; and
44.5. The causal link between TACSA's breach and North Shore's inability to
service its payments to the plaintiff.
[45] The question is whether the existence of third party proceedings can constitute a
defence to an application for summary judgment. In my view, it can, in appropriate
circumstances.
[46] In my view, the third party claim against TACSA is not merely a collateral matter;
it goes to the very heart of the defendants ’ defence. The defendants contend that North
Shore would have been able to meet its obligations to the plaintiff but for TACSA’s breach.
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[47] The causal chain pleaded by the defendants is that the breaches of a maintenance
agreement by TACSA directly caused North Shore’s financial failure, which in turn caused
the breach of the lease agreement with the plaintiff and the resulting shortfall for which the
defendants are now being sued as sureties.
[48] If the defendants can prove at trial that TACSA ’s breach was the effective cause of
North Shore’s default, then the defendants’ liability as sureties may be affected. While the
defendants remain liable as co-principal debtors, the extent of the plaintiff’s damages may
be reduced if the plaintiff was under a duty to mitigate its damages or if the loss was caused
by the act of a third party.
[49] Importantly, the third party proceedings under Rule 13 are designed precisely for
situations where a defendant claims a contribution or indemnification from a third party in
respect of the plaintiff’s claim. Rule 13(1) provides:
“Where a defendant claims as against any person not already a party to the action (such
person hereinafter called the third party) that he is entitled to a contribution or
indemnification in respect of the plaintiff's claim, he shall be at liberty to issue a third party
notice.”
[50] The fact that the defendants have properly issued a third party notice, and that notice
has been served on TACSA, is a strong indicator that the defence is bona fide. TACSA has
entered an appearance to defend. In my view, the third party notice is therefore a live issue
in the litigation.
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[51] The defendants have provided extensive factual allegations, including a breakdown
schedule of damages. I am of the view that t he mere fact that the counterclaim is
unliquidated does not automatically disqualify it as a defence to summary judgment. In
Truter v Degenaar17, Van Dijkhorst J held that claims and counterclaims ought ordinarily
to be considered pari passu, and the court has a discretion to order that they be heard
together.18 That is precisely what the defendants seek: a trial in which both the plaintiff ’s
claim and the third party claim against TACSA are adjudicated together.
[52] I am satisfied that the third party proceedings against TACSA constitute a bona fide
defence that is triable. There is a reasonable possibility that at trial, the defendants may
establish that TACSA’s breach caused North Shore ’s financial difficulties, which in turn
may affect the quantum of the plaintiff ’s claim or entitle the defendants to an
indemnification or contribution.
[53] Having considered the defendants’ opposing affidavit and the annexures thereto and
the plaintiff’s documents filed for the relief sought , I am not persuaded that the plaintiff
has an unanswerable case. On the contrary, there are several triable issues:
53.1. Whether clause 101(c) of the lease agreement constitutes a penalty subject to
reduction under the Conventional Penalties Act;
53.2. Whether the vehicles were sold at market -related prices and whether the
plaintiff properly mitigated its damages;
17 1990 (1) SA 206 (T).
18 Id at 210H-211G.
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53.3. Whether TACSA’s breach of the service and maintenance agreement caused or
contributed to North Shore’s default; and
53.4. Whether the defendants are entitled to a contribution or indemnification from
TACSA in respect of any amount they may be ordered to pay to the plaintiff.
[54] The third party claim against TACSA is the most substantial of these defences. It
raises complex factual and legal issues that cannot be determined on paper. Evidence will
be required from witnesses, including representatives of the plaintiff, the defendan ts, and
TACSA, as well as expert witnesses on the valuation of the vehicles, the cause of the
breakdowns, and the quantification of the alleged damages.
[55] It cannot be gainsaid that summary judgment should not be granted where there is a
genuine dispute of fact on a material issue. In my view, the third party claim gives rise to
precisely such a dispute.
[56] The plaintiff argued that the defendants remain liable as co -principal debtors and
that the third party claim is a separate matter that does not affect the plaintiff ’s right to
summary judgment. I do not agree. The third party claim is intimately connected to the
plaintiff’s claim because it goes to causation and the quantification of damages. If the
defendants can establish at trial that TACSA ’s breach was the cause of North Shore ’s
default, that may have an impact on the amount for which the defendants are liable, or on
their right to an indemnification.
[57] Moreover, the overarching principle of our law is that summary judgment is an
extraordinary remedy that should not be granted when there is a reasonable possibility that
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For the Plaintiff: Adv BD Hitchings
Instructed by: Senekal Simmonds Inc
For the Defendants: Adv T Lautré
Instructed by: Oosthuizen Caine Inc
Date of Hearing: 29 April 2026
Date of Judgment: 24 June 2026