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[2013] ZAWCHC 90
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Business Partners Ltd v The Trustees for the time being of the Riaan Botes Family Trust and Another (21758/2012) [2013] ZAWCHC 90; 2013 (5) SA 514 (WCC) (3 May 2013)
IN THE HIGH COURT
OF SOUTH AFRICA
(WESTERN CAPE
HIGH COURT, CAPE TOWN)
REPORTABLE
Case no: 21758/2012
In the matter
between:
BUSINESS PARTNERS
LTD
........................................................................
Plaintiff
and
THE TRUSTEES FOR
THE TIME BEING
.....................................
First
Defendant
OF THE RIAAN
BOTES FAMILY TRUST
OMAR BOTES
................................................................................
Second
Defendant
JUDGMENT: 3 MAY
2013
Schippers J:
[1] This is an
application for summary judgment which raises an interesting question
of procedure - whether the application may
be deferred by delivery of
a notice in terms of rules 35(12) and (14) of the Rules of Court. The
plaintiff claims against the first
and second defendants jointly and
severally, payment of the sum of R1 438 783.36 being the
balance outstanding on a loan
agreement and legal costs, together
with interest and costs on an attorney and own client scale. As
against the second defendant,
the plaintiff claims payment of the
costs of execution, insurance,and rates and taxes up to a maximum
amount of R300 000.00,
and an order declaring certain property
known as Portion 9 of the Farm Ronwe No 851 in the Drakenstein
Municipality Division, Paarl,
Province of the Western Cape, in extent
11.4275 hectares and held by Deed of Transfer No T 68582/2004
(“
the property
”), specially executable; and costs
of suit on an attorney and client scale.
[2] The plaintiff’s
claim against the first defendant, the Trustees for the time being of
the Riaan Botes Familie Trust (“
the Trust
”),
arises from a loan agreement entered into between the plaintiff and
the Trust, in terms of which it lent and advanced
the sum of
R1 500 000.00 to the Trust. The claim against the second
defendant is based on a deed of suretyship concluded
between the
plaintiff and the second defendant. In terms of that agreement, the
second defendant bound himself as surety and co-principal
debtor,
limited to a maximum amount of R1 500 000.00, for the
principal debt, and for R300 000.00 as a preferent
charge to
cover costs of execution, insurance, rates and taxes and interest,
arising from a mortgage bond. The second defendant
undertook to pay
the plaintiff on demand, the full amount owed by the Trust to the
plaintiff under any instrument of debt or any
agreement in
force,should the Trust fail to discharge any of its obligations to
the plaintiff. The second defendant registered
a surety mortgage bond
over the property as a covering security for all sums of money owing
to or claimable by the plaintiff from
the Trust.
[3] The summons was
sued out on 14 November 2012 and served on 28 November 2012. The
defendants delivered their notice of intention
to defend on 12
December 2012. This application was delivered on 13 December 2012 and
set down for hearing on 24 January 2013.
[4] On 22 January
2013 the defendants delivered a notice of their intention to oppose
this application. However, they have not furnished
security to the
plaintiff for any judgment which may be given, neither have they
delivered any affidavit to show that they have
a
bona fide
defence to the action. Instead, on 22 January 2013 they delivered a
notice in terms of rules 35(12) and (14) of the Rules of Court
(“
the
notice
”). It states
inter alia
that the defendants
require the plaintiff, within 15 days of delivery of the notice, to
produce for their inspection and permit
them to make copies or
transcriptions of various documents referred to in the summons,
particulars of claim, verifying affidavit
and the annexes thereto.
The notice further states that should the plaintiff fail to produce
the documents or permit the defendants
to make copies or
transcriptions thereof, application will be made to the Court
compelling them to do so.
[5] The defendants
contend that they are entitled to a response to the notice before
delivering their opposing affidavits in this
application. This, they
say, is essential to ensure that they have a fair opportunity to
defend the matter.
[6] The defendants
are however mistaken, for the following reasons. First, they ignore
both the purpose of, and the procedure for,
summary judgment. Second,
they misconstrue the provisions and purpose of rules 35(12) and (14).
[7] The purpose of
the summary judgment procedure in rule 32 of the Rules of Court is to
enable a plaintiff with a clear case to
obtain swift enforcement of a
claim against a defendant who has no real defence to that claim.
1
It was designed to
prevent vexatious litigation by not allowing a party to defend an
action when he has no
bona
fide
defence.
2
The
Supreme Court of Appeal (SCA) has held that it was intended to
prevent sham defences from defeating the rights of parties by
delay,
and at the same time causing great loss to plaintiffs seeking to
enforce their rights.
3
However,
the procedure is not intended to shut out a defendant with a triable
issue or sustainable defence from placing it before
the court, unless
it is clear that he has no case.
4
In
Maharaj
,
5
Corbett
JA said that the remedy provided by the rule is extraordinary and
drastic, and its grant is based on the supposition that
the
plaintiff’s case is unimpeachable and that the defence is bogus
or bad in law.
6
The
SCA has since held that the summary judgment procedure can no longer
be regarded as extraordinary because our courts have successfully
applied it for almost a century; and that having regard to its
purpose and proper application, it is drastic and holds terror only
for a defendant who has no defence.
7
[8] The basic steps
in an application for summary judgment are these.
(1) Within 15 days
after the date of delivery of a notice of intention to defend, the
plaintiff may apply for summary judgment together
with interest and
costs, if the claim in the summons is on a liquid document; for a
liquidated amount in money; for delivery of
specified movable
property; or for ejectment.
8
(2) The application
must be accompanied by an affidavit which must comply with three
requirements. First, it must be made by the
plaintiff or any other
person who can swear positively to the facts. Second, the deponent
must verify the cause of action and the
amount, if any, claimed. And
third, the affidavit must contain a statement by the deponent that in
his opinion there is no
bona
fide
defence
to the action and the notice of intention to defend has been
delivered solely for the purpose of delay.
9
(3) Upon the hearing
of the application, the defendant may either give security to the
plaintiff for any judgment which may be given,
or satisfy the court
by affidavit or with the leave of the court, by oral evidence, that
he has a
bona
fide
defence
to the action. Such affidavit or evidence must disclose fully the
nature and grounds of the defence and the material facts
upon which
it is based with sufficient particularity and completeness to enable
the court to decide whether it discloses a
bona
fide
defence.
10
Where the defence is
based on facts in the sense that material facts alleged by the
plaintiff in its summons are disputed or new
facts are alleged
constituting a defence, all that the court enquires into is: (a)
whether the defendant has 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 a
defence which is both
bona
fide
and
good in law, to either the whole or part of the claim.
11
(4) If a defendant
furnishes security or satisfies the court that he has a
bona
fide
defence
which is good in law, the court is bound to give leave to defend and
the action proceeds in the ordinary way.
12
If
the defendant fails to furnish security or satisfy the court in this
way, then the court has a discretion whether or not to grant
summary
judgment.
13
[9] Having regard to
the purpose and construction of rule 32, it will immediately be noted
that rule 35, which governs discovery,
inspection and production of
documents (essentially pre-trial procedures), does not feature at all
in the summary judgment procedure.
Its exclusion is hardly
surprising. To allow discovery and inspection of documents before
delivery of an opposing affidavit to
summary judgment as the
defendants would have it, would delay the swiftenforcement of a
claim. That is the very purpose of rule
32 - to dispose of a clear
case without putting the plaintiff to the expense of a trial.
Moreover, to allow compliance with the
notice first, would run
counter to the express provisions of rule 32. Thus rule 32(3)(b)
requires the defendant to establish a
bona
fide
defence
which is good in law. This is not a high threshold. It is sufficient
if on the facts disclosed, the defendant appears to
have a
bona
fide
defence.
14
Opposing
affidavits in summary judgment proceedings are customarily treated
with a certain degree of indulgence.
15
All
that is required is that the defence must not be set out baldly,
vaguely or laconically that the court gains the impression
that the
defendant has dishonestly sought to avoid presenting a fuller or
clearer version of the defence.
16
It could never have
been the intention of the drafters of the Rules that a defendant
should first be allowed to invoke rule 35(12)
or (14) – and to
delay summary judgment proceedings even further where there has been
no compliance with those rules, to
the prejudice of a plaintiff. This
construction is underscored by rule 32(3)(b), in terms of which the
opposing affidavit must
be delivered before noon on the court day but
one before the day on which the application is to be heard.
[10] Rule 35 reads
inter alia as follows:
“
(12) Any party to any
proceeding may at any time before the hearing thereof deliver a
notice as near as may be in accordance with
Form 15 in the First
Schedule to any other party in whose pleadings or affidavits
reference is made to any document or tape recording
to produce such
document or tape recording for his inspection and permit him to make
a copy or a transcription thereof. Any party
failing to comply with
such notice shall not, save with the leave of the Court, use such
document or tape recording in such proceeding
provided that any other
party may use such documents or tape recording.
…
(14) After appearance to
defend has been entered, any party to any action may, for purposes of
pleading, require any other party
to make available for inspection
within five days a clearly specified document or tape recording in
his possession which is relevant
to a reasonably anticipated issue in
the action and to allow a copy or transcription to be made
thereof.”
[11] Rule 35(14)
requires “
a
clearly specified document
”
to
be made available for the purpose of pleading, and then only if it is
necessary for that purpose.
17
Moreover, what is
envisaged in the ruIe is a document or tape recording relevant to an
issue “
in
the action
”
.
On its plain wording the rule is limited in its application.
18
The
ambit of rule 35(12) is wider than rule 35(14) in that the former
refers to “
any
document or tape recording
”
,
and does not require a detailed descriptive reference to such
documents.
19
It
is of course open to the defendants to invoke rule 35(12) and (14).
However if they had difficulty in dealing with the pleadings
because
they required documents in order to determine what the plaintiff’s
case is, this should have been stated in affidavits
opposing summary
judgment as justification for their inability to deliver an affidavit
disclosing the nature and grounds of the
defence and the material
facts upon which it is based.
20
But
what the defendants cannot do,is circumvent the provisions of rule
32(3)(b) by delivery of the notice, in order to obtain documents
which might support a
bona
fide
defence
or to defer summary judgment proceedings, as was submitted by Mr
Newton on their behalf.
[12] For the above
reasons I have come to the conclusion that an application for summary
judgment cannot be deferred by delivery
of a notice in terms of rules
35(12) and (14) of the Rules of Court, without more.
[13] What remains
then, is whether the plaintiff is entitled to summary judgment.
[14] The plaintiff’s
claims are of the kind contemplated in rule 32(1).It has delivered an
affidavit by Ms R. Achmat, a legal
managerin its employ, who states
that the facts in the summons are within her own knowledge, in that
she is personally in control
of this matter; the relevant records,
documentation and files are under her control; and she has examined
that documentation and
has personal knowledge of their contents. She
goes on to say that the defendants are indebted to the plaintiff in
the amounts and
on the grounds stated in the summons; that they do
not have a
bona fide
defence; and that they have entered an
appearance solely for the purpose of delay.Copies of the loan
agreement; the certificate
of balance in respect of the loan; the
deed of suretyship; and the surety mortgage bond, are annexed to the
affidavit.
[15] The plaintiff
has thus complied with the provisions of rule 32(2), save for the
claims for R9 920.17 in respect of outstanding
legal costs, and the
claim for payment of an additional sum up to a maximum of
R300 000.00. I am not persuaded that the plaintiff
has an
unanswerable case in relation to these claims.
[16] The defendants
have not filed any affidavits opposing summary judgment. The
provisions of rule 32(3)(b) are not peremptory
in the sense that a
court has the power, in proper circumstances, to extend the time for
delivery of opposing affidavits.
21
But
the defendants have not filed an application for an extension of time
within which to deliver such affidavits. They have opposed
this
application solely on the basis that the plaintiff is obliged to
comply with the notice, by which they must stand or fall.
[17] Apart from
this, it appears from the timing and content of the notice, as
submitted by Mr Steenkamp on behalf of the plaintiff,
that the
defendants do not have a
bona fide
defence and that the notice
has been delivered in order to take advantage of the unavoidable
delays which will result if the case
goes to trial. To begin with,
the defendants waited nearly six weeks before delivering the notice.
It was delivered a day but one
before the hearing of this
application. If the defendants really needed the documents in order
to prepare their opposing affidavits
in this application, they would
have filed the notice earlier. Rule 35(12) does not provide for a
time period within which a party
should comply with such a notice;
and rule 35(14) provides for only five days. The notice stipulates a
generous time frame for
the delivery of the documents – 15
court days. The inference is inescapable that this was done for the
purpose of delay.
[18] The notice
itself shows a lack of sincerity on the part of the defendants. The
documents sought in items 1, 19, 20 and 21 are
the originals of
documents such as the loan agreement, the suretyship and the surety
mortgage bond,attached to the particulars
of claim and the
application for summary judgment. Items 2 and 5 refer to annexes to
the pleadings which are before the Court.
Items 3, 14 to 18 and 22 do
not refer to existing or identifiable documents at all, and are
requests for general discovery. For
example, in item 22 the
defendants require the plaintiff to produce “
all of the
‘applicable records, documentation and the relevant files’
under the control of Rabia Achmat referred to
in paragraph 3.1 of her
verifying affidavit”.
[19] The result is
that summary judgment is granted as follows:
(1) Against the
defendants jointly and severally, the one paying the other to be
absolved, for:
(a) payment of the
sum of R1 428 863.19;
(b) interest on the
said amount at the rate of 8.5% per annum, compounded monthly
a
tempore morae
from 26October2012until date of payment;
(c) costs of suit on
a scale as between attorney and client;
(2) Against the
second defendant:
Portion 9 of the
Farm Ronwe No. 851 in the Drakenstein Municipality division of Paarl,
measuring11.4275 hectares and held by Deed
of Transfer No.
T68582/2004,is declared specially executable.
SCHIPPERS J
Counsel for the
Plaintiff
:
Adv. Marius Steenkamp
Instructing
Attorneys
:
Mayats Attorneys
Ref: AA Mayat
Claremont
Counsel for the
First & Second Defendant
:
Adv. Alan Newton
Instructing
Attorneys
:
VV H Attorneys
Ref: A Maree
23 Oewerpark
Stellenbosch
Dates of hearing
:
24 January 2013
Date of judgment
:
03 May 2013
1
Cilliers
et al (eds
): Herbstein
and Van Winsen: The Civil Practice of the High Courts of South
Africa (Vol 1 5
th
ed 2009)
at
516 – 517.
2
Meek
v Kruger
1958 (3) SA 155
(T) at 159–160A.
3
Joob
Joob Investments (Pty) Ltd v Stocks Mavundla Zek Joint Venture
2009
(5) SA (1) (SCA) para 31
;
Majola v Nitro Securitization 1 (Pty) Ltd
2012
(1) SA 226
(SCA) para 25.
4
Joob
Joob Investments
n 3para 31.
5
Maharaj
v Barclays National Bank Ltd
1976
(1) SA 418
(A).
6
Maharaj
n
5 at 423G.
7
Joob
Joob Investments
n
3paras 32 and 33
.
8
Rule
32(1).
9
Fischereigesellschaft
F Busse & Co. Kommanditgesellschaft v African Frozen Products
(Pty) Ltd
1967 (4) SA 105
(C) at 108A, affirmed in
Maharaj
n
5
at 422A-C.
10
Maharaj
n
5at 425G-H.
11
Maharaj
n
5at 426A-C.
12
Rule
32 (7);
Maharaj
n 5 at 426C;
Joob Joob Investments
n 3
para 32.
13
Rule
32(5).
14
Maharaj
n 5 at 426B.
15
Koornklip
Beleggings (Edms) Bpk v Allied Minerals Ltd
1970(1) SA 674(C) at
678E.
16
Breitenbach
v Fiat SA (Edms) Bpk
1976(2) SA 226 (T) at 229A.
17
Cullinan
Holdings Ltd v Mamelodi Stadsraad
1992 (1) SA 645
(T) at 647E-F.
18
Quayside
Fish Suppliers CC v Irvin & Johnson Ltd
2000
(2) SA 529
(C) at 534F
.
19
Erasmus
v Slomowitz
(2)
1938 TPD 242
at 244;
Cullinan
n 17 at
648D-E.
20
See
in this regard
Standard Bank of South Africa Ltd v Roestof
2004 (2) SA 492
(W) at 497G-I.
21
General
Plumbing Supplies (1956) (Pty) Ltd v Continental Engineering Co
(Pty) Ltd
1960 (3) SA 663
(W) at 667C-668C.