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[2013] ZAWCHC 58
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Absa Bank Ltd v Nicholas and Another, Absa Bank Ltd v Nicholas and Another (19942/2011, 18243/2011) [2013] ZAWCHC 58 (20 February 2013)
9
REPORTABLE
REPUBLIC OF SOUTH
AFRICA
IN THE HIGH court of
South Africa
(WESTERN CAPE HIGH
COURT, CAPE TOWN)
CASE NO: 19942/2011
In the matter between:
ABSA BANK LIMITED
..............................................................................................
Plaintiff
and
HERBERT CLIFFORD
NICHOLAS
.............................................................
First
Defendant
ELSA JOHANNA NICHOLAS
................................................................
Second
Defendant
CASE NO:
18243/2011
In the matter between:
ABSA BANK LIMITED
..............................................................................................
Plaintiff
and
ELSA JOHANNA NICHOLAS
......................................................................
First
Defendant
HERBERT CLIFFORD
NICHOLAS
........................................................
Second
Defendant
JUDGMENT DELIVERED ON
20 FEBRUARY 2013
DAVIS AJ
[1] These two matters
came before me as opposed applications for summary judgment. In case
number 19942/2011 the defendants, who
are married to one another, are
the owners of Erf 11520 Milnerton, Cape (“the Milnerton
Property”), an immovable property
which is subject to a
mortgage bond registered in favour of the plaintiff. The Milnerton
property serves as the primary residence
of the defendants. In case
number 18243/2011, the first defendant is the owner of an immovable
property situated in Napier (“the
Napier property”) which
is also subject to a mortgage bond registered in favour of the
plaintiff. The second defendant bound
himself in favour of plaintiff
as surety for the obligations of the first defendant in terms of the
mortgage loan in respect of
the Napier property.
[2] In both matters the
plaintiff instituted action against the defendants for payment of the
full balances owing on the mortgage
loans and for orders declaring
the relevant immovable properties specially executable. The plaintiff
made use of simple summonses
to which were annexed, inter alia,
copies of the relevant mortgage bonds and the deed of suretyship in
the case involving the Napier
property. The plaintiff did not,
however, annex copies of the relevant underlying loan agreements
secured by the mortgage bonds
and suretyship.
[3] The defendants
opposed both applications for summary judgment, chiefly on the basis
of section 85 of the National Credit Act
34 of 2005 (‘the
NCA’). It was contended that this was an appropriate case for
the Court to exercise its discretion
under section 85 to refer the
matter to the defendants’ debt counsellor with a request that
the debt counsellor evaluate
their circumstances and make a
recommendation to the court in terms of section 86 (7) of the NCA.
The defendants did not raise
any dispute regarding the merits of the
plaintiff’s claims.
[4] Two defences were
raised
in limine
in the summary judgment opposing affidavits
filed by the defendants in both matters. The first defence was that
of
lis pendens,
which fell away when the plaintiff withdrew
the prior actions which gave rise to this defence. The second point
raised was that
the plaintiff had failed to annex copies of the
relevant loan agreements to the simple summonses and that this
rendered the summonses
defective. I shall refer to this defence as
‘the annexure point”.
[5] The defendants did
not persist with the second point
in limine
. In the heads of
argument filed on behalf of defendants the annexure point was
apparently abandoned and reliance was placed solely
on section 85 of
the NCA.
[6]
Subsequent to the hearing
of this matter on 8 November 2012, I became aware that the Full Bench
of this Court was to hear argument
on the question of whether Rule
17(2)(b) requires that copies of the relevant agreements be annexed
to a simple summons. In the
circumstances I considered it appropriate
to await the decision of the Full Bench before deciding this matter,
and I informed Counsel
accordingly. Counsel were then afforded an
opportunity to furnish me with written submissions dealing with the
impact of the Full
Bench decision in
ABSA
Bank Limited v Janse van Rensburg & Others
(‘
Janse
van Rensburg’
)
1
on the present
application.
[7] I requested Counsel
to consider in particular, whether the decision in
Janse
van Rensburg
lays
down a general rule which must be applied, regardless of the fact
that reliance on the annexure point was apparently abandoned.
[8] In
Janse
van Rensburg
the
Full Bench held that, on a proper interpretation of rule 17(2)(b),
read with Form 9, it is necessary to attach a copy of the
written
agreement to the summons where the plaintiff’s cause of action
is based on such agreement.
2
In the course of his
judgment Griesel J, with whom Fourie J and Saldanha J concurred,
referred to the following statement in Erasmus:
3
‘
Where
the cause of action is founded on some document, reference thereto
should be made in the simple summons and a copy should
be attached to
the summons and the original should be handed in at the time when
application for default judgment is made.
If
a copy of the required document is not attached to the simple
summons, the summons would not disclose a cause of action
.’
(Emphasis added.)
[9] As authority for the
latter proposition, the learned authors refer to the decision of
Wepener J in
ABSA
Bank Limited v Studdard and Another
(‘
Studdard
’
),
4
a case which Griesel J
referred to with approval in
Janse
van Rensburg
.
In
Studdard,
Wepener J referred to the
following remarks of Swain J in
Moosa
v Hassam
5
concerning a party’s
failure to annex to the particulars of claim a copy of the written
agreement relied upon, as required
by rule 18(6):
‘
In
the present case the respondents base their cause of action against
the applicants upon the written agreement. The written agreement
is a
vital link in the chain of respondents’ cause of action against
the applicants. In order for the respondents’
cause of action
to be properly pleaded, it is necessary for the written agreement
relied upon to be annexed to the particulars
of claim. In the absence
of the written agreement the basis of the respondents’ cause of
action does not appear
ex
facie
the
pleadings.
’
6
Wepener J went on to say
in
Studdard
that:
‘
If
it is correct that it is necessary for a plaintiff to attach the
document to properly plead its cause of action,
such
would be correct not only for the purposes of Rule 18, but also for
the purposes of Rule 17 as, the plaintiff would disclose
no cause of
action pursuant to the provisions of Rule 17 if it fails to attach
the written agreement
.
’
7
(Emphasis
added.)
He concluded that,
although Rule 17(2)(b) does not in so many words require the contract
upon which the plaintiff relies to be attached
to the summons, the
effect of the failure to do so is that the summons does not disclose
a cause of action.
8
[10] Although the Courts
in
Janse van Rensburg
and
Studdard
were seized with
applications for default judgment and not summary judgment, in my
view these cases, and the authorities referred
to therein, are
authority for the general proposition that, where a plaintiff’s
cause of action is based on written document,
a copy thereof is
required to be attached to the simple summons in order for the
summons to disclose a cause of action. In my view,
Janse van
Rensburg
lays down an interpretation of rule 17(2)(b) which must
be consistently applied, regardless of whether one is dealing with an
application
for default judgment or summary judgement.
[11] To my mind two
consequences flow from a plaintiff’s failure to attach to the
simple summons a copy of the written agreement
relied for the cause
of action:
11.1 First, the Court is
not in a position where it can decide whether or not judgment should
properly be granted in respect of
the claim.
11.2 Second, the
verifying affidavit required for summary judgment in terms of rule
32(2) will be defective for failure to verify
all the facts
supporting the cause of action.
[12] As regards the
first,
it
is trite that one of the purposes of a simple summons is to enable
the court to decide whether or not judgment should be granted.
9
Without the relevant
agreement being annexed to the summons it is difficult to see how the
court can be satisfied that judgment
ought properly to be granted.
For instance, it would be impossible to know that a deed of
suretyship contravened the requirements
of section 6 of Act 50 of
1956, or that a credit agreement contained provisions which violated
section 90 of the NCA and/or
section 51
of the
Consumer Protection
Act 68 of 2008
, unless the relevant agreements were annexed to the
simple summons.
[13] It is no answer, in
my view, to say that applications for summary judgment do not call
for the same degree of caution as applications
for default judgment,
for in the former the defendant is present before the Court and able
to defend him or herself. I consider
that, even where the defendant
is before the Court, with legal representation, and does not rely on
an apparent defect in the plaintiff’s
cause of action, the
Court is duty bound to refuse judgment where it is apparent that the
plaintiff is not lawfully entitled to
the relief claimed. And to be
properly satisfied that the plaintiff is indeed entitled to the
relief claimed, the Court must have
sight of the relevant agreement,
or parts thereof, on which the cause of action is based.
[14] As regards the
second consequence,
rule 32(2)
requires that a plaintiff who applies
for summary judgment file an affidavit verifying the cause of action
and the amount claimed.
The requirement that the cause of action be
verified has been interpreted to mean that all the facts supporting a
cause of action
must be verified, including every element of the
cause of action.
10
[15] If, as has been
held,
a
written contract is a ‘
link
in the chain
’
of
the plaintiff’s cause of action, and if attachment thereof to
the simple summons is necessary to disclose a cause of action,
it
would seem to me to follow that, if the document is not annexed, an
essential element in the cause of action is lacking and
has not,
therefore, been verified on oath,
as
required by
rule 32(2).
11
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11
[16] Mr Jonker, who
appeared for the plaintiff, submitted that summary judgment ought not
to be refused in these circumstances where
the defendants did not
allege any prejudice as a result of the plaintiff’s failure to
annex the loan agreements to the summonses
and did not persist with
their reliance on the annexure point. He referred to the case of
Standard
Bank of South Africa v Roetstof (‘Roetstof’)
12
in which Blieden J
criticised the approaches taken in
ABSA
Bank Ltd v Coventry
13
and in
Gulf
Steel (Pty) Ltd
v
Rack-Rite Bop (Pty) Ltd and another,
14
where the Court
emphasised the technical correctness of the plaintiff’s
pleadings as a prerequisite for the granting of summary
judgment.
Blieden J stated that:
15
‘
If
the papers are not technically correct due to some obvious and
manifest error which causes no prejudice to the defendant, it
is
difficult to justify an approach that refuses the application,
especially in a case such as the present one where a reading
of the
defendant’s affidavit opposing summary judgment makes it clear
beyond doubt that he knows and understands the plaintiff’s
case
against him.’
[17] The approach of
Blieden J was criticised by Wallis J, as he then was, in
Shackleton
Credit Management (Pty) Ltd v Microzone Trading 88 CC and Another.
16
He pointed out that
Blieden J’s remarks were ‘
plainly
obiter
’
since,
the
rule 32(2)
affidavit in that case, properly read, did in fact
comply with the technical requirements of the rule, so that no
question of prejudice
could arise.
He
proceeded to make the following pertinent observations:
17
‘
Insofar
as the learned judge suggested that a defective application can be
cured because the defendant or defendants have dealt
in detail with
their defence to the claim set out in the summons, that is not in my
view correct. That amounts to saying that defects
will be overlooked
if the defendant deals with the merits of the defence. … The
fact that they set out that defence does
not cure the defects in the
application, and
to
permit an absence of prejudice to the defendants to provide grounds
for overlooking defects in the application itself seems to
me unsound
in principle. The proper starting point is the application. If it is
defective, then
cadit
quaestio
.
’(Emphasis
added.)
[18] I respectfully agree
with the approach taken by Wallis J, as he then was, and all the more
so where the defect lies in the
plaintiff’s summons, and not
merely in its application for summary judgment. I am also in
respectful agreement with the views
expressed by Marais AJ, as he
then was, in
Dowson
v Dobson,
where
the learned judge stated as follows:
18
‘
For
generations the Courts have
mero
motu
refused
to grant judgments upon summonses which fail to disclose a cause of
action, even although the defendant may not have entered
appearance
to defend.
The
drastic consequences of summary judgment militate against a more
benevolent view being adopted by the Courts in applications
for
summary judgment.
Thus,
even if a defendant has not raised the excipiability of the summons
or particulars of claim, if it is clear that the pleading
would be
excipiable, or liable to be set aside … I cannot see how the
Court can ignore it
…
I
may add that, where summary judgment is sought, more is involved than
a technically excipiable pleading. If the pleading lacks
an essential
allegation, it follows that there will also be a failure to verify
upon oath the existence of a good cause of action.
’
(Emphasis added.)
[19] I am forced to
conclude, for the reason given, that the plaintiff’s summons is
defective for want of compliance with
rule 17(2)(b)
, that it does not
disclose a cause of action, and therefore that the plaintiff’s
verifying affidavits, which purport to verify
‘
the facts and
cause of action stated in the summons’
do not comply with
the requirements of
rule 32(2).
On this basis the application for
summary judgment cannot, in my view, succeed.
[20] Furthermore, and
even if I am wrong in these regards, I am of the view that, without
having had sight of the written loan agreements
on which the
plaintiff’s claims are based, I cannot be certain that this is
a case in which I ought properly to grant judgment
in favour of the
plaintiff. I also consider that I cannot be certain that there may
not be some injustice to the defendant arising
from the plaintiff’s
failure to annex the agreements to the summonses. One cannot rule out
the possibility that, had the
loan agreements been annexed to the
summonses, a defence might have been apparent therefrom. In these
circumstances I consider
it imprudent to grant a final judgment
against the defendants, and I would exercise my discretion in terms
of
rule 32(5)
to refuse summary judgment.
[21] The application for
summary judgment must accordingly fail. In the light of the
conclusion which I have reached, it is not
necessary for me to deal
with the defendant’s request for relief in terms of
section 85
of the NCA.
[22] In the result, I
make the following order in both case numbers 19942/2011 and
18243/2011:
(1) The plaintiff’s
application for summary judgment is refused, and the defendants are
given leave to defend the action.
(2) The costs of the
summary judgment proceedings are to be borne by the plaintiff.
D M davis
Acting
Judge of the High Court
20 February 2013
Court:
DAVIS, AJ
Heard:
08 NOVEMBER
2012
Delivered:
20
FEBRUARY 2013
COUNSEL FOR
PLAINTIFF:
Adv. Wynand Jonker
INSTRUCTING ATTORNEYS;
Velile Tinto Associate Inc.
COUNSEL FOR
DEFENDANT:
Adv. Peter Coston
INSTRUCTING
ATTORNEY
Eben Klue Attorneys
1
As
yet unreported decision of the Western Cape High Court in Case
number 16071/12, handed down on 24 December 2012.
2
Janse
van Rensburg
supra
n 1 at para [15].
3
DE
van Loggerenberg & PBJ Farlam, Erasmus
Superior Court
Practice
B1-124 at nn 5 and 6 (Service 39,2012).
4
[2012]
ZAGPJHC 26 (13 March 2012).
5
2010
(2) SA 410
(KZP).
6
At
para [18].
7
Studdard
supra
n 4 at para [15].
8
Studdard
supra
n 4 at para [16].
9
Janse
van Rensburg
supra
n 1 at para [17]; Volkskas Bank Ltd v
Wilkinson and three similar cases (‘Wilkinson’)
1992 (2)
SA 388
(C) at 395 A.
10
All
Purpose Space Heating Co of S A (Pty) Ltd v Schweltzer
1970(3)
SA 560 (D) at 563 H;
Dowson & Dobson Industrial Ltd v Van Der
Werf and others (‘Dowson & Dobson’)
1981(4) S A
417( C) at 426-8.
11
See
Dowson & Dobson
supra
n 10 at 428 A-B.
12
2004
(2) SA 492
(W)
13
1998
(4) SA 351
(N) at 354 B - E
14
1998
(1) SA 679
(O) at 683 G – 684 B
15
Roetstof
supra
n 12 at p 496 G - H
16
2010
(5) SA 112
(KZP) at para [24] – [25]
17
At
para [25]
18
Supra
n 10 at p 430 G - H