About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Supreme Court of Appeal
SAFLII
>>
Databases
>>
South Africa: Supreme Court of Appeal
>>
2019
>>
[2019] ZASCA 110
|
|
Connecto Fasteners (Pty) Ltd v Bidvest Bank Limited; Jacobs Capital (Pty) Ltd v Bidvest Bank Limited (1000/18; 999/18) [2019] ZASCA 110 (13 September 2019)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not
reportable
Case
No: 1000/18 and 999/18
In
the matters between:
CONNECTO
FASTENERS (PTY)
LTD APPELLANT
and
BIDVEST BANK
LIMITED RESPONDENT
and
JACOBS
CAPITAL (PTY)
LTD APPELLANT
and
BIDVEST BANK
LIMITED RESPONDENT
Neutral
Citation:
Connecto
Fasteners (Pty) Ltd v Bidvest Bank Ltd
(1000/18)
and
Jacobs Capital
(Pty) Ltd v Bidvest Bank
(999/18)
[2019] ZASCA 110
(13 September 2019)
Coram:
Saldulker and Van der Merwe JJA and
Tsoka AJA
Heard:
2 September 2019
Delivered:
13 September 2019
Summary:
Practice –
judgments and orders – summary judgment – opposing
affidavit of deponent does not disclose a bona fide
defence –
judicial discretion properly exercised – summary judgment
correctly granted.
ORDER
On
appeal from
: The
KwaZulu-Natal Local Division High Court, Durban (Gorven J sitting as
court of first instance):
Both appeals are
dismissed with costs including costs of two counsel.
JUDGMENT
Tsoka AJA (Saldulker
and Van der Merwe JJA concurring):
[1]
The issue in this appeal is whether the court below (Gorven J)
correctly granted summary judgment against the appellants.
[2]
This appeal, with the leave of the court below, relates to two
matters that were heard together. The appellants are Connecto
Fasteners (Pty) Ltd (Connecto) and Jacobs Capital (Pty) Ltd (Jacobs
Capital). The issues in the two matters are identical and the
respondent in both matters is Bidvest Bank Limited (Bidvest). The
result is that only one judgment would suffice for the two matters.
For convenience, I shall refer to both appellants as the appellant.
[3]
Three written agreements are relevant to the appeal. The first
agreement was concluded between Tradeflow (Pty) Limited (Tradeflow)
and the appellant. This is referred to as the Trading Agreement. The
second was concluded between the respondent and Tradeflow
and is
described as the Receivables Purchase Agreement. The third was
concluded between the respondent and the appellant and is
described
as the Customer Agreement. The latter is the agreement upon which the
respondent's claim is founded and the summary judgment
was sought and
granted in relation thereto. It is common cause that the contractual
relationship amongst the above named entities
was governed by these
three agreements.
[4]
Briefly, the essence of the Trading Agreement was that Tradeflow
would make payment on behalf of the appellant to the suppliers
nominated by the latter. The appellant would then reimburse Tradeflow
for those amounts along with an agreed commission and charges.
In
terms of the Receivables Purchase Agreement, the respondent would
purchase and take transfer of certain of Tradeflow's claims
against
the appellant. Tradeflow also ceded its entire right, title and
interest in its claims against the appellant, insofar as
transfer in
terms of the Receivables Purchase agreement was in any respect not
fully effective and valid. In terms of the Customer
Agreement, the
appellant would open a designated account with the respondent and
could post on a secure platform information concerning
amounts to be
paid in respect of claims for reimbursements to the respondent.
[5] Despite posting
payment assurances on the platform, the appellant failed to make
payment to the respondent. The latter then
instituted an action in
the KwaZulu-Natal Local Division of the High Court, Durban against
the appellant for payment of the moneys
due, interest and costs. The
appellant filed a notice to defend the action. As the respondent’s
claim was for a liquidated
amount, it applied for summary judgment in
terms of rule 32 of the Uniform Rules. The appellant filed an
affidavit in terms of
rule 32(3)(
b
) resisting the
granting of summary judgment. The defence persisted with on appeal
can be summarised as follows:
(a)
The enforceability of
its obligation to pay in terms of clause 3.2 of the Customer
Agreement depended on a valid and enforceable
account receivable owed
by the appellant to Tradeflow. There being no enforceable account
receivable payable by the appellant to
Tradeflow, the respondent was
not entitled to any payment. The contention being that as Tradeflow
ceded all its rights, title and
interest in the account receivable to
the respondent, the latter could not have more rights than Tradeflow
had;
(b)
The respondent’s
right to claim payment was governed also by clause 2 of the Trading
Agreement which requires the appellant
to draw a bill of exchange and
thereafter have it delivered to Tradeflow. Bills of exchange not
having been drawn, so contended
the appellant, there was no
obligation on it to pay the respondent.
[6] The appellant’s
defence requires an interpretation of clause 3.2 of the Customer
Agreement which reads:
‘
When
and each time Customer [Connecto/Jacobs Capital] posts a Payment
Assurance, Customer [Connecto/Jacobs Capital] creates and
assumes, in
respect of the Account Receivable to which such Payment Assurance
relates, an independent, irrevocable, unconditional,
legal, valid,
transferable and binding obligation in favour of the Supplier
[Tradeflow] (or in the event of a Transfer, in favour
of the
Supplier’s transferee) [Bidvest] to pay to the relevant
Designated Account on the relevant Maturity Date an amount
equal to
and in the same currency as the relevant Certified Amount without
deduction or counterclaim and without exercising any
right of set-off
under the Underlying Relationship to which such Payment Assurance
relates or otherwise, and such amount shall
be due and payable by
Customer [Connecto/Jacobs Capital] on the Maturity Date.’
[7]
Prior to embarking on the correct interpretation of clause 3.2 of the
Customer Agreement, it is apt to restate what this court
said in
Endumeni
Municipality
[1]
with
regards to interpretation of agreements. This court said:
‘
.
. . Interpretation is the process of attributing meaning to the words
used in a document, be it legislation, some other statutory
instrument, or contract, having regard to the context provided by
reading the particular provision or provisions in the light of
the
document as a whole and the circumstances attendant upon its coming
into existence. Whatever the nature of the document, consideration
must be given to the language used in the light of the ordinary rules
of grammar and syntax; the context in which the provision
appears;
the apparent purpose to which it is directed and the material known
to those responsible for its production. Where more
than one meaning
is possible each possibility must be weighed in the light of all
factors. The process is objective, not subjective.
A sensible meaning
is to be preferred to one that leads to insensible or unbusinesslike
results or undermines the apparent purpose
of the document . . . the
“inevitable point of departure is the language of the provision
itself”, read in context
and having regard to the purpose of
the provision and the background to the preparation and production of
the document.’
[8]
Ex facie clause 3.2 it is apparent that the clause regulates the
relationship between the appellant and the respondent. From
the
clause, it is apparent that Tradeflow is not a party to the Customer
Agreement and that the parties to the said agreement are
the
appellant and the respondent.
[9]
Clause 3.2 must be interpreted in the context of the entire Customer
Agreement and in particular the whole of clause 3 which
confirms that
the respondent’s claim is incontestable and that it was
entitled to apply for and be granted summary judgment
against the
appellant. The heading of clause 3.2 reads ‘The Payment
Obligation’. The appellant’s payment obligation
to the
respondent only arises when the former posts a payment assurance
which is defined as ‘. . . details of supplier, invoice
number,
the amount denominated in the relevant currency, the issue date and
the maturity date’ of each account receivable.
[10]
In terms of clause 3.1 the appellant is not obliged to post any
payment assurance. It is at liberty to post or not to post
a payment
assurance. But once a payment assurance is posted, the appellant
creates and assumes, in respect of account receivable,
a payment
obligation which is ‘an independent, irrevocable,
unconditional, legal, valid, transferable and binding obligation
in
favour of the supplier (or in the event of a transfer, such as in the
present, in favour of the supplier’s transferee)’.
In
addition payment by the appellant is to be made 'without deduction or
counterclaim and without exercising any right of set-off'.
[11]
Thus, clause 3.2 of the Customer Agreement provided for an
unconditional undertaking by the appellant to make payment which
is
irrevocable, legal, valid and binding entitling the respondent to an
independent and incontestable claim against the appellant
for
payment. The clause, unlike clause 2 of the Trading Agreement which
requires the drawing of bills of exchange, does not require
such an
act. In terms of clause 3.2 a payment obligation arises upon the mere
posting of the payment assurance. The appellant’s
affidavit
resisting the summary judgment disclosed no bona fide defence worthy
of consideration by a trial court in due course.
The court below was
thus correct to grant the summary judgment against the appellant.
[12]
In the result the respondent’s claims in terms of the Customer
Agreement and in particular clause 3.2 thereof, are incontestable.
The respondent was entitled to summary judgment. Furthermore, I can
find nothing wrong in the judgment of the court below indicating
that
the learned judge exercised his discretion wrongly. The defences
raised by the appellant do not disclose a bona fide defence
worthy of
consideration by a trial court in due course. Accordingly, the
appeals must fail.
[13] In the result the
following order is made:
Both appeals are
dismissed with costs including the costs of two counsel.
________________________
M Tsoka
Acting
Judge of Appeal
APPEARANCES:
For
appellant: M R Hellens SC
S
K Dayal SC
Instructed
by:
Maharaj
Attorneys, La Lucia Ridge
Claude
Reid Attorneys, Bloemfontein
For
respondent: L N Harris SC
D
Ramdhani
Instructed
by:
Norton
Rose Fulbright South Africa Inc, Sandton
Webbers,
Bloemfontein
[1]
Natal Joint Municipal
Pension Fund v Endumeni Municipality
2012 (4) SA 593
(SCA) para 18.