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IN THE HIGH COURT OF SOUTH AFRICA
EASTERN CAPE DIVISION, MAKHANDA
Case No.: 2846/2024
In the matter between:
FIRSTRAND BANK LIMITED Applicant
and
FIRST FORTUNE INVESTMENTS 14 CC
t/a TOTAL OXFORD First Respondent
ALLI MOHAMED SOOMAR Second Respondent
GULAM MOHAMED SOOMAR Third Respondent
JUDGMENT
COLLETT J:
Introduction
[1] The applicant, FirstRand Bank Limited (hereinafter referred to as the ‘Bank’ ) seeks
payment of an amount alleged to be owing pursuant to an overdraft facility extended to
the first respondent, First Fortune Investments 14 CC. The second and third respondents
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are cited in their capacities as sureties and co -principal debtors for the obligations of
the first respondent.
[2] The Bank seeks payment of R522 706.43, together with interest calculated at the
contractual rate of prime plus 9% per annum, calculated daily and compounded
monthly in arrears from 17 May 2024 to date of payment . The amount claimed
represents the indebtedness alleged to have arisen under the first respondent’s overdraft
facility.
[3] The liability of the third respondent is limited under his deed of suretyship to
R250 000.00 together with the applicable interest. The aggregate limits of the
suretyships relied upon against the second respondent amount to R600 001, together
with interest and therefore exceed the amount presently claimed.
[4] The application is opposed on several grounds. The respondents contend firstly, that the
Bank, by its conduct, waived its right to rely upon non- compliance with the terms of
the facility, secondly, that the National Credit Act 34 of 2005 (hereinafter referred to as
the ‘NCA’) applies and that the requisite statutory procedures were not followed, thirdly,
that the certificate of balance does not establish the amount claimed and lastly, that the
Bank has failed to establish the execution and enforceability of the deeds of suretyship.
[5] The respondents contend that these matters give rise to genuine disputes of fact. They
submit that the application should accordingly be dismissed alternatively referred to
trial in terms of Rule 6(5)(g) of the Uniform Rules of Court (hereinafter referred to as
the ‘Rules’).
[6] The mere existence of a denial does not establish a real, genuine and bona fide dispute
of fact. The existence of such a dispute depends upon the nature of the allegation, the
manner in which it is answered and the evidence reasonably available to the party
disputing it. Accordingly, it is necessary to examine each defence against the affidavits
and the documentary material before the Court.
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Factual matrix
[7] On 19 March 2020 the Bank and the first respondent concluded a written facility
agreement (hereinafter referred to as the ‘agreement’). The first respondent was
represented in concluding the agreement by the second respondent being its sole
member. In terms of the agreement, the Bank afforded the first respondent an overdraft
facility with a limit of R500 000. The facility was repayable on demand and attracted
interest in accordance with the terms of the agreement.
[8] The agreement contained provisions regulating, inter alia , to default, interest, waiver
and proof of indebtedness. It provided that a certificate signed by a manager of the Bank
stating the amount owing would constitute prima facie proof of the matters stated
therein unless the contrary was proved.
[9] The first respondent’s obligations were secured by deeds of suretyship furnished by the
second and third respondents. Schedule 2 to the agreement expressly identified those
suretyships as security for the first respondent’s obligations. The second respondent’s
existing suretyships were recorded in amounts of R100 000, R250 000 and R250 001
respectively whilst that of the third respondent was recorded in an amount of R250 000.
[10] During March 2024 the first respondent’s indebtedness exceeded the R500 000 facility
limit. On 18 March 2024 the Bank called up the facility and demanded payment from
the first respondent. The amount then outstanding was stated to be R505 157.75.
Payment was not made by the first respondent.
[11] On 23 April 2024 a certificate of balance reflected the first respondent’s indebtedness
as R516 242.74. On 2 May 2024 the Bank’ s attorneys addressed a further demand to
the respondents for payment of that amount together with contractual interest. A further
certificate dated 16 May 2024 reflected the indebtedness as R522 706.43 together with
interest at the contractual rate from 17 May 2024. It is that amount which the Bank now
interest at the contractual rate from 17 May 2024. It is that amount which the Bank now
seeks to recover in these proceedings.
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The alleged waiver
[12] The respondents contend that the Bank waived its right to rely upon strict compliance
with the R500 000 facility limit. They rely upon what they describe as a longstanding
course of dealing between the parties in terms of which the first respondent was
permitted, over a period of approximately ten years, to exceed the agreed facility limit
with the Bank thereafter increasing the facility or accepting payment sufficient to
regularise the account. On this basis they contend that the Bank’ s previous conduct was
inconsistent with an intention to enforce strict compliance with the facility limit.
[13] Waiver is the deliberate abandonment of a known right. It is not lightly inferred with
the onus resting upon the party alleging it.
1 The test is an objective assessment as to
whether the conduct relied upon is plainly inconsistent with an intention to enforce the
right in question and justifies the conclusion that the holder of the right, with knowledge
thereof, intended to surrender it.
[14] In Phoenix Salt Industries (Pty) Ltd v Lubavitch Foundation of Southern Africa,
2 the
Supreme Court of Appeal emphasised the distinction between contractual variation and
waiver. A conventional non-variation clause does not, merely because it prohibits oral
variation, necessarily preclude the unilateral waiver of a right and the occurr ence of
such waiver remains a matter of evidence. That distinction is important as the Bank
cannot succeed merely by pointing to the existence of a non- variation clause. The
wording of the agreement must be considered together with the respondents’ factual
case of waiver.
[15] The agreement addresses the consequences of indulgence. It provides that no
relaxation, indulgence or extension granted by the Bank to the client will operate as an
estoppel against the Bank or as a waiver of any of its rights nor will any such relaxation
or indulgence constitute a novation of the agreement. The respondents’ reliance upon
or indulgence constitute a novation of the agreement. The respondents’ reliance upon
the Bank’ s previous tolerance of excesses over the facility limit must be considered
against that express contractual provision.
1 Road Accident Fund v Mothupi 2000 (4) SA 38 (SCA) paras 15–19; Laws v Rutherfurd 1924 AD 261 at 263.
2 2012 (3) SA 294 (SCA) at paras 21- 23
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[16] Fundamentally, the answering affidavit does not identify conduct from which a
deliberate abandonment by the Bank of its right to recover the overdraft indebtedness
can reasonably be inferred. The fact that a bank may tolerate deviations from the facility
limit, afford indulgences or permit the continued operation of an account does not
establish an intention permanently to abandon its contractual right to repayment.
[17] The respondents’ description of that conduct as a ‘course of dealing’ does not alter its
legal effect. Even accepting the conduct relied upon by the respondents it does not
establish that the Bank abandoned its contractual right to call up the facility and recover
the amount owing.
[18] The objective conduct points in the opposite direction. The facility was repayable on
demand. The Bank ultimately exercised that right when it called up the facility and
demanded payment. There is no evidence of an agreement that the indebtedness need
not be repaid nor of conduct sufficiently unequivocal to establish the abandonment of
the Bank’ s right to demand repayment.
[19] Accordingly, the waiver defence cannot succeed. Furthermore, the conduct relied upon
does not give rise to a genuine dispute of fact requiring oral evidence.
The National Credit Act
[20] The respondents further contended that the NCA applies to the facility agreement and
that the Bank has failed to establish compliance with the Act particularly in relation to
the requirements of section129 thereof.
[21] Section 4(1)(a)(i) of the NCA excludes from its operation a credit agreement in terms
of which the consumer is a juristic person whose asset value or annual turnover,
together with that of related juristic persons, at the time the agreement is made, equals
or exceeds the threshold det ermined by the Minister in terms of section 7(1). The
threshold applicable at the relevant time was R1 million.
3
3 General Notice 713 of 2006, Government Gazette 28893 of 1 June 2006.
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[22] The financial statements furnished by the first respondent in connection with the facility
reflect, for the financial year preceding the conclusion of the agreement, an annual
turnover exceeding R39.5 million and total assets exceeding R2.9 million. Those
figures substantially exceed the statutory threshold. However, the respondents objected
to reliance upon those statements on the basis that they were introduced in reply.
[23] The conclusion does not depend upon those financial statements. Section 4(1)(b)
excludes a large agreement, as contemplated in section 9(4), where the consumer is a
juristic person whose asset value or annual turnover falls below the threshold
contemplated in section 7(1). For purposes of determining whether a credit facility
constitutes a large agreement, section 7(2) provides that the principal debt is the credit
limit under that facility.
[24] In Nedbank Ltd v Wizard Asset Holdings (Pty) Ltd and Others ,
4 it was held that the
NCA does not apply to a large agreement concluded with a juristic person irrespective
of whether its asset value or annual turnover falls above or below the R1 million
threshold. In the case of a credit facility, the credit limit constitutes the principal debt
for purposes of determining the applicable threshold. The credit limit in the present
matter was R500 000 and thus exceeded the applicable R250 000 threshold. Hence,
even if the respondents’ objection to reliance upon the financial statements were upheld,
the facility constituted a large agreement and fell outside the operation of the NCA.
[25] Section 4(2)(c) provides that the NCA applies to a credit guarantee only to the extent
that the Act applies to the credit facility or credit transaction in respect of which the
guarantee is granted. Since the NCA does not apply to the facility agreement, it does
not apply independently to the suretyships securing that indebtedness.
5 The
not apply independently to the suretyships securing that indebtedness.
5 The
respondents’ reliance upon the NCA is accordingly without merit and the absence of
notices in terms of section 129 affords them no defence to the relief sought.
4 2010 (5) SA 523 (GSJ) at paras 5-8
5 FirstRand Bank Ltd v Carl Beck Estates (Pty) Ltd and Another 2009 (3) SA 384 (T) at paras 18–24.
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The certificate of balance and quantum
[26] The agreement provides that a certificate signed by a manager of the Bank, whose
appointment, qualification or authority need not be proved, stating the first respondent’s
indebtedness, the applicable interest rate or other charges constitutes prima facie proof
of the matters stated therein unless the contrary is proved.
[27] The evidential effect of such a certificate arises from the agreement between the parties.
In Absa Bank Ltd v Le Roux and Others ,
6 the Court explained that the purpose of a
certificate clause is to create an evidential onus upon the party disputing the
indebtedness to negate the bank’s allegations as to the debt and its quantum. The
certificate stands as prima facie proof because the parties have contractually agreed that
it should have that effect. A certificate of balance is not by reason merely of its existence
incontrovertible proof of indebtedness. Where the parties have agreed that such a
certificate constitute s prima facie proof, it establishes the amount reflected therein
unless displaced by sufficient evidence to the contrary.
[28] The papers contain a certificate dated 23 April 2024 reflecting an indebtedness of
R516 242.74, together with contractual interest from 24 April 2024. A later certificate,
dated 16 May 2024 records the indebtedness as R522 706.43, together with interest at
prime, then recorded as 11.75%, plus 9% per annum, calculated daily and compounded
monthly in arrears from 17 May 2024 until date of payment. It is the latter certificate
upon which the monetary relief presently sought is based.
[29] The respondents allege that the certificate inflates the indebtedness, interest and charges
and fails properly to credit payments. However, they do not identify a payment which
has not been credited, an incorrect debit, an erroneous interest calculation or an
alternative balance which they contend is owing nor is any documentary material
alternative balance which they contend is owing nor is any documentary material
produced which contradicts the certified balance.
6 2014 (1) SA 475 (WCC) at para 16; see also Senekal v Trust Bank of Africa Ltd 1978 (3) SA 375 (A) at 381H–
383A.
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[30] That contention does not displace the evidential effect which the parties agreed the
certificate would have. The respondents were not required to reconstruct the Bank’ s
account or establish the correct balance themselves. However, they were required to
place before the Court some factual basis upon which the correctness of the certified
indebtedness could genuinely be called into question.
[31] The respondents sought to meet this difficulty by submitting that the underlying
transactional records are in the possession of the Bank and ought to be produced so that
the account may be reconstructed and tested. That submission does not answer the
evidential position created by the agreement and the certificate. The respondents cannot
overcome the agreed prima facie evidential effect of the certificate merely by
contending that records in the Bank’ s possession might, upon further investigation,
reveal a basis upon which to challenge it. They were required to identify some factual
basis for disputing the certificate of indebtedness which they have failed to do.
[32] The fact that the amount reflected in the certificate of 16 May 2024 exceeds that
contained in the earlier certificate does not create a dispute of fact. The facility
continued to attract contractual interest and charges. Significantly, the respondents
identify no particular component of the later balance which they contend was
impermissibly included nor do they advance any calculation demonstrating that the
certified balance is incorrect.
[33] A contractual certificate constituting prima facie proof does not reverse the ultimate
onus resting upon the Bank to establish its claim. However, it does have the evidential
consequence agreed upon by the parties. In the absence of evidence capable of
disturbing that prima facie proof a mere unsupported assertion that the balance is
incorrect is insufficient.
[34] In the circumstances, the respondents have not adduced evidence sufficient to displace
[34] In the circumstances, the respondents have not adduced evidence sufficient to displace
the prima facie proof afforded by the certificate of balance. The Bank has accordingly
established the first respondent’s indebtedness in the amount of R522 706.43.
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The suretyships and the alleged disputes of fact
[35] The second and third respondents’ liability arises from deeds of suretyship concluded
in favour of the Bank in respect of the first respondent’s indebtedness. The Bank relies
upon the deeds as having been executed by the second and third respondents. The
respondents dispute their execution and enforceability and contend that the disputes
arising in that regard preclude the grant of final relief.
[36] Although the deeds pre-date the agreement of 19 March 2020 they expressly constitute
continuing security for indebtedness then owing or which might thereafter become
owing by the first respondent to the Bank. Schedule 2 to the 2020 facility agreement
identifies those deeds as security for the first respondent’s obligations under the facility.
In terms of these instruments the sureties bound themselves, subject to their respective
limits, as sureties and co-principal debtors for the indebtedness of the first respondent.
[37] In their answering papers the respondents challenge the authenticity, validity and
authority associated with the execution of the suretyships. The second respondent
denies that the signatures are those of himself and the third respondent. The third
respondent confirms the answering affidavit. Their case is that the Bank bears the onus
of establishing execution and that the dispute cannot properly be determined on
affidavit. It was submitted that in the absence of evidence from the witnesses to the
suretyships or expert handwriting evidence, the Bank has failed to discharge the onus.
[38] A court should be slow to resolve a genuine dispute concerning the execution of a
material document merely by comparing signatures or choosing between competing
probabilities on affidavit. However, the question which arises before that enquiry is
whether the respondents have raised a real, genuine and bona fide dispute concerning
execution at all.
execution at all.
[39] Where final relief is sought in motion proceedings factual disputes are ordinarily
determined in accordance with the rule in Plascon -Evans Paints Ltd v Van Riebeeck
Paints (Pty) Ltd.
7 The facts stated by the respondent, together with those admitted by
7 1984 (3) SA 623 (A) at 634E–635C.
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the respondent in the applicant’s affidavits ordinarily provide the factual basis upon
which the application is determined. However, a respondent’s version may be rejected
on the papers where it does not raise a real, genuine and bona fide dispute of fact or
where it is so far -fetched or clearly untenable that the Court is justified in rejecting it
merely on the papers.
[40] In Wightman t/a JW Construction v Headfour (Pty) Ltd and Another ,
8 the Supreme
Court of Appeal explained that a real, genuine and bona fide dispute of fact exists only
where the party purporting to raise it has seriously and unambiguously addressed the
fact said to be disputed. A bare or ambiguous denial will not suffice. The Court
recognised that the level of detail which may reasonably be e xpected of a respondent
depends upon the circumstances and the respondent’s knowledge of the facts. Where
the facts are such that the respondent must necessarily possess knowledge of them and
be able to provide an answer, a failure to do so may justify the conclusion that no
genuine dispute of fact has been raised.
[41] The distinction is important. The Court is not called upon to reject a properly
substantiated version merely because the Bank’ s version appears more probable. The
anterior question is whether the respondents have placed before the Court a sufficiently
substantive version to create the factual dispute upon which their Rule 6(5)(g) argument
depends.
[42] The second respondent was the sole member of the first respondent and represented it
in concluding the facility agreement . That agreement expressly identified the second
and third respondents and the existing deeds of suretyship furnished by them as security
for the facility.
[43] The second respondent was therefore not a stranger to the transaction or to the security
arrangements upon which the Bank relied. The existence of the deeds of suretyship was
arrangements upon which the Bank relied. The existence of the deeds of suretyship was
expressly recorded in the facility agreement which he concluded on behalf of the first
respondent. His answering affidavit is silent as to how, if neither he nor the third
respondent had executed those deeds, they came to be identified and accepted as
8 2008 (3) SA 371 (SCA) at para 13
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security for the facility. Moreover, he does not allege that he objected to, queried or
corrected that record when concluding the facility agreement relating thereto.
[44] The answering affidavit provides no factual account of what occurred in relation to that
security. It does not explain what security, if any, the second respondent understood had
been furnished to enable the facility to be implemented nor does it explain how the
Bank came to hold the deeds upon which it relies or what, on the respondents’ version,
occurred when the security contemplated by the facility was procured.
[45] The difficulty for the respondents is more fundamental because whether they executed
the deeds is a matter peculiarly within their knowledge. Their answer does not
meaningfully engage with the surrounding transaction or provide a factual version
capable of explaining the security documentation upon which the Bank relies. Instead,
their case rests substantially upon the denial of the signatures coupled with the assertion
that the Bank must prove them.
[46] This Court does not accept the Bank’ s submission, to the extent that it was advanced,
that a denial of signature necessarily implies an allegation of fraud on the part of the
Bank. That conclusion does not follow as a matter of necessity and is not required to
determine the dispute.
[47] Furthermore, this Court does not place decisive weight upon a visual comparison
between the signatures appearing on the suretyships and signatures appearing
elsewhere in the papers. A court is not a handwriting expert and in the circumstances
of this matter the authenticity of the deeds need not be determined by judicial
comparison of signatures.
[48] This is not a case in which two detailed and mutually destructive factual versions
confront the Court. The Bank relies not only upon the deeds but upon the 2020 facility
agreement, signed on behalf of the first respondent by the second respondent, which
agreement, signed on behalf of the first respondent by the second respondent, which
expressly identifies those deeds as security for the facility. The respondents provide no
factual account addressing that documentary matrix. They merely deny execution and
require the Bank to prove it.
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[49] Considered in that context, the denial does not seriously and unambiguously engage
with facts which the respondents were in a position to address. This is not a case in
which nothing more could reasonably have been expected of them. Wightman draws
precisely that distinction. Accordingly, this Court finds that the respondents have not
raised a real, genuine and bona fide dispute of fact concerning the execution of the
suretyships.
Referral to trial
[50] The respondents nonetheless submitted that the application should be dismissed or,
alternatively, referred to trial in terms of Rule 6(5)(g). They contended that oral
evidence, discovery and production of the underlying banking records were necessary
to resolve the disputes concerning the indebtedness, the course of dealing between the
parties and the execution of the suretyships.
[51] Rule 6(5)(g) confers a discretion upon a court where an application cannot properly be
decided on affidavit. That discretion arises where there is a genuine dispute of fact
material to the determination of the application which cannot satisfactorily be resolved
on the papers. A referral to oral evidence or trial is not warranted merely because a
respondent asserts that a dispute exists. In applying the principles referred to above the
dispute must be real, genuine and bona fide.
[52] In the present matter that threshold has not been met. The respondents have failed to
identified a genuine dispute concerning the first respondent’s indebtedness or its
quantum which requires oral evidence nor have they raised a sufficiently substantive
factual dispute concerning the execution of the suretyships. In essence, the proposed
referral would serve to afford the respondents an opportunity through discovery and
oral evidence to seek out a factual basis for challenges which have not adequately been
raised on the papers. Rule 6(5)(g) does not serve that purpose.
raised on the papers. Rule 6(5)(g) does not serve that purpose.
[53] Rule 6(5)(g) does not entitle a litigant to a referral merely because allegations have been
denied or because oral evidence and discovery might permit further investigation of a
defence. The dispute said to require referral must first genuinely arise on the affidavits.
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The respondents have not established a material factual dispute which renders
determination of the application on the papers inappropriate.
[54] There is accordingly no basis to dismiss the application by reason of a dispute of fact
or to refer it to oral evidence or trial.
Liability of the sureties
[55] Consequently, the Bank has established the liability of the second and third respondents
under their respective deeds of suretyship. Their liability is accessory to the
indebtedness of the first respondent. Both the second and third respondents bound
themselves as surety and co-principal debtor for the obligations of the first respondent,
secured by their respective deed subject to the terms and limits thereof.
[56] The Bank has established indebtedness in the amount of R522 706.43. The aggregate
limits of the suretyships furnished by the second respondent exceed that amount and
his liability thus extends to the full amount claimed. The third respondent’s liability in
respect of the principal indebtedness is limited to R250 000, together with interest, costs
and other charges recoverable in terms of his deed of suretyship. Within those
respective limits their liability is joint and several with that of the first respondent, th e
one paying the others to be absolved.
Costs
[57] The Bank seeks costs on the attorney and own client scale and the relevant agreements
expressly provide for the recovery of costs on that scale. In particular, the deeds of
suretyship provide for the recovery of legal costs as between attorney and own client
incurred in enforcing the suretyships. Whilst a contractual provision as to costs does
not oust the Court’s discretion, there is no reason in the circumstances of this matter not
to give effect to the parties’ agreement.
[58] Accordingly, costs will follow the result on an attorney and own client scale subject to
the respective contractual limits of liability applicable to the second and third
respondents.
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[59] In the circumstances, the following order is made:
1. The first and second respondents are ordered jointly and severally, the one paying
the other to be absolved, to pay the applicant the sum of R522 706.43.
2. The third respondent is ordered jointly and severally with the first and second
respondents, the one paying the others to be absolved, to pay the applicant an
amount in respect of principle indebtedness limited to R250 000.00
3. Interest is payable on the amounts referred to in paragraphs 1 and 2 above at the
rate of prime plus 9% per annum, calculated daily and compounded monthly in
arrears, from 17 May 2024 to date of final payment.
4. The respondents are ordered jointly and severally, the one paying the others to be
absolved, to pay the applicant’s costs on an attorney and own client scale.
S A COLLETT
JUDGE OF THE HIGH COURT
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APPEARANCES:
For the Applicant : Adv. Coutts
Instructed by : Messrs Wheeldon Rushmere & Cole
119 High Street
MAKHANDA
(Ref.: Mr Van Der Veen)
For the Respondent : Adv. Chetty
Instructed by : Netteltons Attorneys
118A High Street
MAKHANDA
(Ref.: Ms Sykes/Sam)
Date heard : 27 August 2026
Date judgment delivered : 08 September 2026