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[2013] ZAWCHC 147
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South African Land Arrangements CC and Others v Nedbank Ltd (A28/13) [2013] ZAWCHC 147 (19 September 2013)
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE HIGH COURT, CAPE
TOWN)
Case
No
A28
/13
In the matter between:
SOUTH AFRICAN
LAND ARRANGEMENTSCC
..................
First
appellant
GUIDO LOUIS MARC
MARIEN
...........................................
Second
appellant
ANNE JOSEPHA
LOUIS DELAET
.........................................
Third
appellant
and
NEDBANK
LIMITED
..........................................................................
Respondent
Court:
GRIESEL
et
samela jJ
Heard:
13 September 2013
Delivered:
19 September
2013
____________________________________________________________________
JUDGMENT
____________________________________________________________________
Griesel j:
This
is an appeal against a judgment of the magistrate of Somerset West
who granted summary judgment in favour of the respondent,
Nedbank
Limited (as plaintiff) against the three appellants herein (as
defendants) in respect of three separate claims. For convenience,
I
refer to the parties by their respective designations in the
magistrate’s court.
Factual background
The claims arise from a series
of agreements between the plaintiff and the defendants over a period
of time:
(a)
On 28 July 2009, the plaintiff entered into a written loan agreement
in terms of which it granted the first defendant, South
African Land
Arrangements CC, a loan facility in an amount of R1,25 million.
(b)
On 11 November 2009, the plaintiff granted the first defendant a
‘permanent increase in overdraft facilities’ on
its
cheque account from R300 000 to R365 000.
(c)
On 6 September 2010, the overdraft facility was, by agreement,
increased to R667 000 on a temporary basis until 30 September
2010.
(d)
As security for the loans, a mortgage bond was registered over the
first defendant’s property, ‘Portion 9 of Farm
no 689
Stellenbosch’, for an amount of R2 million.
(e)
In addition, the second and third defendants bound themselves as
sureties in favour of the plaintiff in respect of the first
defendant’s indebtedness to the plaintiff the
second defendant for an unlimited amount and the third defendant
for
an amount limited to R1,55 million.
In the particulars of claim, the
plaintiff alleged that the first defendant committed a breach of the
loan agreement in that it
failed to pay one or more instalments in
respect of the loan agreement by due date. In the circumstances, the
full outstanding
balance of the loan, amounting to R1,19 million,
had become due. Moreover, the first defendant exceeded the limit of
the
overdraft facility and was indebted to the plaintiff in an
amount of some R725 000 (in round figures) as at 20 January
2011.
These were the amounts claimed from the three defendants
jointly and severally (but limited in the case of the third
defendant
to R1,55 million), together with interest at the
applicable rates, as well as an order declaring the first
defendant’s
property executable.
The
defendants gave notice of their intention to oppose the action,
whereupon the plaintiff applied for summary judgment. In a
fairly
terse opposing affidavit, the second defendant raised the following
defences to the plaintiff’s claims:
(a)
The amounts claimed by the plaintiff are not yet due and payable by
virtue of a further agreement entered into by the parties
on 28 June
2010, which agreement entailed a restructuring of the defendants’
various loan, overdraft and suretyship obligations
in terms of which
such obligations were allegedly reduced to nil.
(b)
The failure by the plaintiff to honour such agreement gave rise to an
unliquidated counterclaim for damages in an amount of
R2,8 million
on the part of the first defendant, which exceeds the plaintiff’s
claims against the defendants.
The
magistrate rejected the defences advanced on behalf of the
defendants and granted summary judgment as prayed, hence this
appeal.
Further evidence on appeal
The
appellants are hamstrung by the fact that the further agreement on
which they relied did not form part of the record before
the
magistrate at the hearing of the application for summary judgment.
In order to overcome this
lacuna
, the defendants accordingly
applied
in limine
for leave to supplement their papers by
adducing further evidence on appeal in the form of a copy of the
agreement in question.
This was opposed on behalf of the plaintiff.
It is accordingly necessary to consider this application before
turning to deal
with the merits of the appeal as such.
Although
a court is in terms of s
22(a) of the Supreme Court Act,
59 of 1959, empowered
to receive further evidence
on appeal,
the court’s powers should be exercised
sparingly and further evidence on appeal should only be admitted in
exceptional circumstances.
1
It is incumbent upon an applicant for leave to adduce further
evidence,
inter alia
, to satisfy the court that it was not
owing to any remissness or negligence on his or her part that the
evidence in question
was not adduced at the trial.
2
Furthermore, inadequate presentation of the litigant’s case at
the trial will only in the rarest instances be remediable
by the
adduction of further evidence at the appeal stage.
3
It is thus clear that the test is a stringent one.
In
S v De Jager
,
4
Holmes JA summarised the relevant requirements as follows:
‘
(a)
There should be some reasonably sufficient explanation, based on
allegations which may be true, why the evidence which
it is
sought to lead was not led at the trial.
(b) There should be
a
prima facie
likelihood of the truth of the evidence.
(c) The evidence
should be materially relevant to the outcome of the trial.’
Discussion
As
for the reason why a copy of the document relied on was not placed
on record, the plaintiffs were unable to say more than it
was ‘in
error’ not attached to the opposing affidavit. I am not
persuaded that this amounts to a reasonably sufficient
explanation
as to why the evidence sought to be adduced was not placed before
the trial court.
Be
that as it may, and even if this hurdle could be overcome, I am in
any event not satisfied that such evidence is ‘materially
relevant to the outcome of the trial’. In this regard, it is
apparent from the document relied on that it was intended
as a
credit restructuring agreement in terms of which the first defendant
would be replaced by another entity, Seasons Find 593
CC (‘Seasons
Find’), as principal debtor; the first defendant’s
overdraft facility and commercial loan would
be reduced to nil; the
suretyships of the second and third defendants would be cancelled
and the first defendant’s existing
credit facility would be
replaced with a new consolidated facility in favour of Seasons
Find in an amount of R1,85 million.
In terms of clause 21 of
this document, the restructuring agreement was intended to supersede
and replace all previous ‘facility
letters’ entered into
between the parties.
However,
it is further apparent that this restructuring agreement was subject
to a number of ‘conditions precedent’,
inter alia
,
provision of security in the form of suretyships for the liability
of Seasons Find by the third defendant and World Focus 263
CC in an
amount of R1,85 million and registration of a first covering
bond in an amount of R2 million over ‘Portion
9 of Farm
no 689 Stellenbosch’, which property had apparently been sold
by the first defendant to Seasons Find. There is
no indication or
allegation to the effect that any of these conditions had been
fulfilled; on the contrary, all indications are
that they had
not
been fulfilled. In fact, the second defendant says so himself: in
his opposing affidavit, he alleged that the plaintiff had breached
the restructuring agreement and had ‘blocked’ the first
defendant’s access to its available funds and accounts.
It
also, in breach of the agreement, closed all the banking facilities
for Seasons Find. As a result of the plaintiff’s
alleged
breach, the sale between the first defendant and Seasons Find ‘fell
through and the first defendant suffered damages
in the amount of
R2,8 million, being the difference between the price at which
the property was sold, under pressure of
legal threats from
plaintiff, to another buyer and the initial purchase price of
Seasons Find’.
It
is thus clear, on the defendants’ own case, that the
restructuring agreement never came into effect, with the result
that
the defendants remained liable to the plaintiff under the original
set of agreements. This is borne out by the fact that
on 6 September
2010, i.e.
after
the restructuring agreement on which
the defendants seek to rely, the plaintiff agreed to increase the
first defendant’s
existing overdraft facility to R667 000.
5
In
these circumstances, it follows that the defendants have not in
their opposing affidavit satisfied the court that they have
any
bona
fide
defence to the action. At best for them, the first
defendant has an unliquidated counterclaim for damages against
the plaintiff.
However, I am of the view that this does not avail
the defendants in these proceedings:
First,
in terms of clause 2.1 of the mortgage bond in question, the first
defendant is liable to make all payments in terms of
the bond
‘without set off or deduction of any kind’, with the
result that the defendants are precluded from relying
on any
counterclaim as a defence against the plaintiff’s claims.
Secondly,
the defendants have failed to disclose ‘fully’ the
nature and grounds of the counterclaim and the material
facts relied
on therefor.
Thirdly,
as pointed out by Brand JA in
Soil Fumigation Services Lowveld CC
v Chemfit Technical Products (Pty) Ltd
,
6
when the answer raised in the opposing affidavit is in the nature of
a counterclaim instead of a plea, a defendant can still
pursue the
counterclaim by issuing summons in a separate action, with the
result that the doors of the court are not finally
closed against
such litigant.
Finally,
the defendants unequivocally concede in their opposing affidavit
that the first defendant ‘is indebted to the plaintiff
in a
certain amount’, which concession in itself is destructive of
the counterclaim on which they seek to rely.
Agreement to grant leave to
defend
The
defendants sought to rely on a further ground of appeal which was
not mentioned in their notice of appeal, namely that the
plaintiff’s
attorney, Mr Claassen, had agreed with the defendant’s
attorney, Mr Botha, that leave to defend would
be granted.
Accordingly, so it was argued, the magistrate erred in not enforcing
this agreement.
The
rule is quite clear: a point not taken in the grounds of appeal is
thereby waived and cannot be taken except by leave of the
appeal
court and on terms as to adjournment and costs. (Obviously leave
would be more readily granted where a pure question of
law is
involved.) Where further grounds of appeal are subsequently, before
the prosecution of the appeal, found to exist,
the procedure
laid down in rule 55A for amending the notice of appeal should be
followed.
7
The defendants did not seek the court’s leave to argue points
not raised in the notice of appeal, nor did they seek leave
to amend
the notice.
I
am in any event satisfied that there is no merit in the point. The
application for summary judgment had initially been enrolled
for 11
May 2011. On the previous day the attorneys for the respective
parties had a telephone conversation in the course of which
the
plaintiff’s attorney indicated that the plaintiff was amenable
to granting leave to the defendants to defend the action.
It is
common cause that no agreement regarding the costs of the
application for summary judgment was reached. The defendants’
attorney recorded the conversation in a letter of the same date,
saying the following:
‘
Ons
bevestig u advies dat u instuksies het om verlof te verleen om te
verdedig in bogemelde aangeleenheid.
Die
enigste ander kwessie wat uitsorteer moet word is die kwessie rakende
koste en soos reeds aan u adviseer is dit ons instruksies
dat u
kliënt aanspreeklik is vir die koste vir die bring van die
aansoek.
U
kliënte se blootstelling ten opsigte van ’n koste bevel is
gegrond daarop dat hulle bewus was van ons kliënte
se verweer
alreeds voordat die dagvaarding beteken was en dat desnieteenstaande
hulle steeds, nadat daar ’n aansoek om verdegiging
geliasseer
is voort gegaan het met die aansoek om summiere vonnis.
Die
gesag is duidelik op hierdie punt en indien u kliënte nie
dienooreenkomsitg toestem nie sal die aangeleentheid afstaan
na die
geopponeerde rol ten einde te argumenteer.’
On
11 May 2011 the correspondent attorney who appeared on behalf of the
plaintiff conveyed to the defendants’ attorney,
Ms Booysen,
that the offer to agree to leave to defend had been withdrawn in
view of the fact that no agreement regarding costs
could be reached
and that the matter had to be postponed to the opposed roll for
argument. These events were recorded as follows
in a letter dated 16
May 2011 from the defendants’ attorneys to the plaintiff’s
attorneys:
‘
Ons
verwys na die hofverrigtinge op 11 Mei 2011 en bevestig dat u
korrespondent, Daniel Venter, adviseer het dat aangesien ons koste
wil argumenteer, die verlof wat u verleen het om te verdedig
teruggetrek word en dat u die hele aansoek nou wil argumenteer.
Ons
bevestig dat die aangeleentheid uitgestel is na 16 Augustus 2011 vir
die geopponeerde rol te Somerset-Wes.’
On
15 August 2011, i.e. one day before the hearing of the postponed
application, both attorneys acting on behalf of the defendants,
Mr
Botha and Ms Booysen, deposed to affidavits recording the events
recited above. The affidavits were apparently handed to Mr
Claassen
on behalf of the plaintiff at 09h05 on the morning of 16 August
2011. In addressing the magistrate shortly afterwards,
8
the plaintiff’s attorney, Mr Claassen, said the following:
‘
We
received the opposing affidavit on the 6
th
of May if my memory serves me right. I then took instruction from my
client regarding whether we should grant the defendants leave
to
defendant the matter. I then on a without prejudice basis approached
the attorney acting for the defendants and confirmed that
on a
without prejudice basis that my client is willing to grant the
defendants leave to defend on condition that the costs be cost
in the
cause Your Worship.
Your
Worship subsequently it became apparent that the defendants were
going to persist that my client pays the costs of this application
for summary judgment on attorney/client scale. I accordingly withdrew
the offer to grant the defendants leave to defendant Your
Worship.
The decision to grant the defendants leave to defend was not in any
way an admission by my clients that the defence put
forward by the
defendants today is of any merits [sic] . . .’
At
the commencement of her address, the defendants’ attorney
raised the alleged agreement as a point
in limine.
She handed
up the affidavits by herself and Mr Botha and started reciting the
salient facts, at which point the magistrate interrupted
her,
stating:
‘
COURT
:
At this point in time I’m truly not interested in – those
are proceedings between the parties, that’s got nothing
to do
with the application. . . . It’s got nothing to
do with me, you cannot now argue that – that are
what I would
regards as
without
prejudice
discussions between the parties. If the parties agreed they’re
going to withdraw it and if that withdrawal is removed or
the offer
is no longer then we proceed. And I think it is unethical of you now
to come and argue that and to bring those things
under the court’s
attention.
ME
BOOYSEN
: Soos die hof behaag Edelagbare.
COURT
:
Because that doesn’t form part of the record – the matter
is on the roll for the application because the applicant
decided to
go ahead with his application for summary judgment. And so therefore
his application you are opposing it, oppose it.
I’m not
interested in out of court discussions that took place between the
parties because it’s not on record.
ME
BOOYSEN
: Soos die hof behaag Edelagbare. Edelagbare dan sal ek
voortgaan op die meriete van die aangeleentheid.’
On
appeal, counsel for the defendants took the magistrate to task for
having adopted this approach and she may well have erred
in that
regard. Be that as it may, the magistrate was undoubtedly entitled
to have regard to the statements from the Bar made
by the
plaintiff’s attorney in the passage quoted above. As stated by
Grosskopf J in
BEF (Pty) Ltd v Cape Town Municipality:
9
‘
It
is the practice in our courts to accept what counsel say from the Bar
as indubitably true and correct and it is a practice without
which
the courts cannot perform their work properly and efficiently.’
I
have no doubt that the same principles apply in the case of
attorneys appearing before any court. Where there is disagreement
between practitioners as to what was said between them (as in this
instance), the court must deal with it as best it can.
10
On
the facts of this case, I am not persuaded that the defendants have
established the alleged agreement on which they sought
to rely. On
both versions, no agreement had been reached regarding costs. In my
experience, it is most improbable that the plaintiff’s
attorney would have unconditionally agreed that leave to defend
should be granted. It is more probable, as stated by Mr Claassen,
that the offer conveyed to the defendants was in the terms as
alleged by him, to which the defendants’ attorney made
a
counter-offer, thereby rejecting the original offer.
11
For these reasons, this point cannot succeed.
Further defences
On
appeal before us, counsel for the defendants sought to rely on
certain further defences, which had likewise not been raised
in the
notice of appeal, nor have they been alluded to in the defendants’
opposing affidavit. Counsel claimed to be entitled
to follow this
course ‘due to the fact that summary judgment is an
extraordinary and stringent remedy’.
12
However, as pointed out by Navsa JA in
Joob Joob Investments v
Stocks Mavundla Zek:
13
‘
The
rationale for summary judgment proceedings is impeccable. The
procedure is not intended to deprive a defendant with a triable
issue
or a sustainable defence of his/her day in court. After almost a
century of successful application in our courts, summary
judgment
proceedings can hardly continue to be described as extraordinary.
. . .
Having
regard to its purpose and its proper application, summary judgment
proceedings only hold terrors and are “drastic”
for a
defendant who has no defence. Perhaps the time has come to discard
these labels and to concentrate rather on the proper application
of
the rule, as set out with customary clarity and elegance by Corbett
JA in the
Maharaj
case
14
at 425G 426E.’
In
the light of these remarks, the defendants are not entitled to more
indulgent treatment simply because these are summary
judgment
proceedings. As far as the failure to raise these points in the
notice of appeal is concerned, I refer to what has already
been
stated above. Moreover, as far as the opposing affidavit is
concerned, it is clear to me that had any of those points been
properly raised, most of the alleged defects sought to be relied
upon could have been cured by a simple amendment to the particulars
of claim; e.g. the fact (no doubt as well known to the defendants as
to this court) that the present plaintiff, Nedbank, is the
successor
in title of BOE Bank, in whose favour one of the suretyships was
signed; or the fact that the agreement of 6 September
2010 was in
fact signed on the third page thereof, which page had not been
annexed to the particulars of claim; or that the overdraft
facilities had been duly called up, as contemplated in the relevant
agreement; and so on. To allow the defendants, in these
circumstances, to now raise these defences for the first time on
appeal would clearly be prejudicial to the plaintiff and ought
not
to be allowed.
It
must be stressed once more that a defendant wishing to avoid summary
judgment by deposing to an affidavit must first of all
disclose
‘fully’ the nature and grounds of its defence and the
material facts relied on therefor. On the facts so
disclosed, the
defendant must satisfy the court that it has a defence which is both
bona fide
and good in law. On the facts of the present
matter, I am not satisfied that the ‘defences’ now
sought to be advanced
by counsel meet either requirement.
Order
:
For
the reasons set out above, I am satisfied that the magistrate was
justified in granting summary judgment as prayed in favour
of the
plaintiff. It follows that the appeal should be dismissed with costs
on the scale as between attorney and own client,
as agreed.
B M Griesel
Judge of
the High Court
Samela
J: I
agree.
M I samela
Judge of the
High Court
1
Colman
v Dunbar
1933
AD 141
at 161;
S
v N
1988
(3) SA 450
(A) at 458E;
Rail
Commuters Action Group & others v Transnet Ltd t/a Metrorail &
others
2005
(2) SA 359 (CC)
para 43;
De
Aguiar v Real People Housing
2011
(1) SA 16
(SCA) paras 9 12.
2
Simpson
v Selfmed Medical Scheme & another
1995 (3) SA 816
(A) at
824J.
3
R v
Carr
1949 (2) SA 693
(A) at 699.
4
1965
(2) SA 612
(A) at 613B.
5
See
para (c) above.
6
2004
(6) SA 29
(SCA) para 11.
7
Jones
& Buckle – The Civil Practice of the Magistrates’
Courts in South Africa
10 ed Vol II at 51-11 – 51.12
(Original Service 2011).
8
According
to the transcript, argument commenced at 10h32 and lasted until
11h38.
9
1990
(2) SA 337
(C) at 347E F.
10
Ibid.
11
Cf
Collen v Rietfontein Engineering Works
1948 (1) SA 413
(A) at
420.
12
The
quotation is from counsel’s heads of argument.
13
2009
(5) SA 1
(SCA) paras 32 and 33.
14
Maharaj
v Barclays National Bank
1976 (1) SA 418
(A).