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[2011] ZAWCHC 500
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ABSA Bank v Marshall and Others, ABSA Bank Ltd v Uys and Another (8850/2011, 11921/2011) [2011] ZAWCHC 500 (29 November 2011)
IN THE
HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE HIGH COURT, CAPE TOWN)
Case No.:
8850/2011
In the
matter between:
ABSA BANK LIMITED
…....................................................................................
Plaintiff
and
ROBERT DOUGLAS MARSHALL
….....................................................
First
Defendant
GAVIN JOHN WHITEFORD N.O.
…..................................................
Second
Defendant
GLORIA DENISE WHITEFORD N.O.
…................................................
Third
Defendant
GAVIN JOHN WHITEFORD
…............................................................
Fourth
Defendant
AND
Case No.
11921/2011
In the matter between:
ABSA BANK LIMITED
…....................................................................................
Plaintiff
and
PETRUS JACOBUS UYS
…...................................................................
First
Defendant
IRIS UYS
…........................................................................................
Second
Defendant
JUDGMENT: 29 NOVEMBER 2011
GAMBLE J
INTRODUCTION
In these matters the Plaintiff (“
the Bank
”)
sought summary judgment against two sets of sureties whom it had
sued after two principal debtors had each defaulted
on their loans
with the Bank.
When the matters came before me in the Motion Court I raised certain
queries regarding the form of the summonses used by the
Bank and
invited counsel to address me thereon. By arrangement the matters
were heard together with a number of others on the
last day of term.
At that stage Mr Viviers appeared for the Bank in both matters. In
the Marshall matter Mr P Tredoux appeared for the First Defendant
while there were no appearances for the Second to Fourth Defendants
(the trustees of a trust which I was informed had consented
to
judgment). In the Uys matter Mr Wessels appeared for both
Defendants. Mr Tredoux informed the Court that in the event that
the
preliminary point regarding the form of the summons was not upheld,
the parties had agreed that the First Defendant would
be afforded
time to file an affidavit opposing summary judgment. Mr Tredoux said
that his client abided the decision of the Court
on the summons
point. The Court is indebted to Messrs Viviers and Wessels for their
most helpful written and oral argument.
THE FORM OF THE SUMMONS
In both matters the Bank had purported to issue a simple summons.
The document in question is made up of a citation of the parties
followed by 10 individually numbered paragraphs in which the Bank’s
cause of action is set out. Various of those paragraphs
make
provision for a total of seven individual documents, which are
attached as annexures to the summons. The document concludes
with
six prayers for relief introduced by the phrase “
Wherefore
Plaintiff prays for judgment …
”.
Rule 17 of the Uniform Rules governs the issue of a summons in this
Court:
Rule 17(2)(a) provides that in “
every case where the claim
is
not
for a debt or liquidated demand the
summons
shall
be as near as may be in
accordance with Form 10 of the First Schedule,
to which
summons shall be annexed a statement of the material facts relied
upon by the plaintiff in support of his claim, which
statement
shall inter alia comply with rule 18
”. [emphasis added]
Claims for debts and liquidated demands are dealt with in Rule
17(2)(b) which provides that in such a case “
the summons
shall
be as near as may be in accordance with
Form 9 of the First Schedule
”. [emphasis added]
Rule 18 sets out the rules relating to pleadings generally and
requires the annexing of,
inter alia
, a written contract
where this is relied upon.
Form 9 (which is relevant in the instant case) requires a plaintiff
to set out its cause of action in “
concise terms
”.
The phrase “
concise
” is defined in the Concise
Oxford Dictionary as “
giving a lot of information clearly
and in a few words
”.
The simple summons used by the Bank herein is essentially a hybrid
document. In its citation of the parties and in the directions
to
the parties regarding the filing of further pleadings and to the
Sheriff regarding service, the document complies with Form
9. In
setting out the cause of action, the document has all the hallmarks
of a set of particulars of claim which would customarily
accompany a
combined summons.
In
Herbstein & Van Winsen
,
Civil Practice of the
High Courts of South Africa
(5
th
Ed) Vol. 1 p 479
the authors summarise the relevant case law
and furnish the following general principles relevant to a simple
summons:
“
In setting out the cause of action, one
need not go into detail and set out the particulars of the basis of
the plaintiff's claim,
that being a matter for the declaration. The
summons merely puts a label to the claim, and need not state the
claim with great
particularity. Although the summons must contain an
indication of what the defendant is to expect in the documentation,
it need
contain no more than that. It is not necessary to include in
the summons a detailed statement of all the essential averments
required
for a statement so complete as not to be excipiable. It has
therefore been held that it is sufficient if a cause of action is
stated
without the addition of any further particulars to it. In the
declaration, should it be necessary to file one, the plaintiff must
enter into details and give the defendant all the particulars he
requires.
” [Footnotes omitted]
In argument Mr Viviers readily conceded that each of the summonses
before the Court was akin to a combined summons. But, he asked,
is
this a defect which would warrant the setting aside of these
documents?
The Bank's claims are undoubtedly for debts and the peremptory
provisions of Rule 17(2)(b) are therefore applicable: the Bank
is
ordinarily obliged to issue a simple summons as near as possible in
accordance with Form 9.
The correct approach to such a summons was set out by Berman and
Selikowitz JJ in
Volkskasbank Limited v Wilkinson and three
similar cases
1
:
“
It appears to us accordingly that where
a plaintiff sues for repayment of a loan (or an overdraft) all that a
simple summons need
contain is a statement setting out the relief
claimed and a succinct outline of the cause of action, i.e. that an
agreement of
loan (or of overdraft) was concluded between the parties
providing for interest on the balance outstanding from time to time
at
a specified (or ascertainable) rate and which loan (or overdraft)
was repayable on demand (or on a fixed or ascertainable date)
and
which, despite demand (or the arrival of that date), has not been
repaid. Where the cause of action is founded on some document,
reference thereto should be made in the summons and a copy thereof
should be attached to the summons and the original should be
handed
in at the time when the application for default judgment is made ….
The simple point is that all that is required of the summons, as
far as the cause of action need be set out, is that the defendant
should be made aware of why (and for what relief) he is being called
upon to answer to plaintiff's claim, and if the summons adequately
serves that purpose, no more is needed of the plaintiff when applying
for judgment in cases where the defendant, duly served, elects
…
[not] … to defend the action.
”
Applying that approach Mr Viviers argued that all that the Bank had
to do in the instant case was to attach the six suretyships
relied
upon (each Defendant having executed three suretyships in favour of
the Bank as the loan escalated) and the certificates
of balance
reflecting the amount outstanding by the principal debtor. This
certificate is mandated by clause 14 of the suretyships.
Having considered the cause of action herein, I am of the view that
it has been set out with more detail than would ordinarily
be
regarded as “
concise
”. For example, there is an
unnecessary recitation in the summons of certain of the terms of the
suretyships. And, the formulation
of the relief claimed in the style
of prayers in particulars of claim is also excessive. But I do not
think that the extent of
these excesses warrants a declaration of
invalidity of the simple summons.
2
NATIONAL CREDIT ACT IMPLICATIONS
In the simple summons the Bank makes concise reference to certain
provisions of the National Credit Act, 34 of 2005 (“
the
NCA
”). The legal conclusion which the Bank arrives at as a
consequence thereof is that the NCA is not applicable
in casu
.
Mr Wessels pointed out that the relief sought in the summons
included declarations of executability in respect of two immovable
properties which were allegedly mortgaged as additional security by
the two sureties. However, the Bank failed to attach copies
of these
mortgage bonds to the summons. This, said Mr Wessels, was a major
defect in the Bank's papers and warranted the refusal
of summary
judgment. He relied in this regard on the unreported judgment of
Thring J in this Division in
Nedbank Limited v Jacobs and
Another
(Case No. 5227/07; 20 March 2008)
.
In the
Jacobs case
, the Bank sued for money lent and
advanced under a loan secured by a covering mortgage bond, a copy
whereof was not attached
to the simple summons. The relief sought
included a prayer declaring the mortgaged property executable. In
opposing summary judgment
the debtor did not disclose a defence on
the merits, but raised a number of points of potential excipiability
which Thring J
disposed of. The Court found, however, that the
failure on the part of the Bank in that matter to annex the mortgage
bond to
the summons was a defect of sufficient magnitude to warrant
the refusal of summary judgment.
Thring J relied on the authority in the
Wilkinson case
(
supra
)
that when a plaintiff’s
cause of action is based on a document, a copy thereof is to be
attached to the simple summons
and the original is to be handed up
at the hearing of the matter. The Learned Judge went on to make the
following observation
at p 21 of the typed judgment:
“
From the summons it would seem that the
plaintiff’s cause of action here is based partly on an
unspecified ‘agreement
of loan’ and partly on the
provisions of a covering mortgage bond. It is possible that the loan
agreement was in writing;
it is also possible that it and/or the
mortgage bond, read either separately or together, constituted a
liquid document or documents.
Because the plaintiff has made no
allegations in this regard, and has attached a copy of neither
document to its summons, the court
has been left in the dark in this
respect.
”
The Court relied on three earlier decisions
3
for the proposition that it was “
good practice
”
to attach to the summons the documents relevant to the claim to
ensure that these may not have been negotiated to third
parties. The
Learned judge put it thus at p 24 of the typed judgment:
“
It might be said that the risk of such a
thing happening in this case is somewhat remote: nevertheless it
cannot, in my view, be
disregarded. The plaintiff has failed, in my
judgment, to comply with the provisions of Rule 17(2)(b), inasmuch as
it has not attached
to its summons a copy of either the loan
agreement (if it was in writing) or of the mortgage bond. If either
of these was a liquid
document it has also failed to comply with the
requirements of Rule 32(2) that, if the claim is founded on a liquid
document, a
copy thereof shall be annexed to the verifying affidavit
in the plaintiff's application for summary judgment. The plaintiff,
of
course, has only itself to blame for these failures to comply with
the Rules.
”
Relying on the decisions in
Mowschenson and Mowschenson v
Mercantile Acceptance Corporation of S.A. Ltd
4
and
Breitenbach v Fiat S.A. (Edms) Bpk
5
,
the Court found that, in light of the defect in the Bank’s
summons:
“
a reasonable possibility exists that an
injustice may be done to the defendants if summary judgment is
granted against them. Consequently
I must, I think, albeit, I must
add, with considerable reluctance, exercise my discretion in their
favour and refuse the Plaintiff's
application
.”
The provisions of the NCA and its myriad statutory requirements were
not considered by Thing J in the
Jacobs case
although
the statute was, by all accounts, applicable in light of the
provisions of Sec 172(3) of the NCA read with Schedule
3 thereto.
They do, however, fall to be considered in the present case since
the Bank contends that the NCA does not apply while
the sureties
argue to the contrary.
It is not necessary to determine that dispute between the parties
which turns on whether one is dealing here with a “
credit
facility
” or a “
credit guarantee
” as
defined in the NCA, or not. However, I agree with Mr Wessels that
there is an absolute dearth of information in the
summons as to what
the precise nature of the principal debt is. The only hint is the
allegation in the certificate of indebtedness
that the principal
debtor was indebted to the Bank under a numbered cheque account. Of
course, that document is only an annexure
to the summons attached to
certify the extent of indebtedness and does not constitute an
allegation in the pleading as such.
I have no doubt that the inclusion of the mortgage bonds as
annexures would have gone some considerable way towards throwing
light on the disputed interpretation under the NCA.
But there is an even more fundamental reason why the documents
should have been attached. In clause 8 of the summons reference
is
made to the two mortgage bonds purportedly passed as security. The
first of these was allegedly over Erf 8704 Bellville.
I was informed from the Bar by Mr Wessels that after a Deeds Office
search perusal of the bond document over the latter mentioned
property revealed that it was never bonded in favour of Absa Bank.
Mr Viviers was unable to explain this glaring mistake in the
summons.
I agree with Mr Wessels that this sort of situation demonstrates the
necessity for a document such as the mortgage bond to be
annexed to
the summons. In
Jacobs’ case
(
supra
)
,
Thring J considered that it was necessary to attach the bond
document to the summons (and produce the original at Court) to
ensure that that bond had not been negotiated or transferred to a
third party. While that precaution is still of application,
I am of
the view that there is a more fundamental reason to require a
plaintiff to attach the bond document (if there is one)
and any
written agreement or other document reflecting the precise nature of
the debt.
Section 130 of the NCA only entitles a creditor to approach a Court
for enforcement of a credit agreement after a number of procedural
steps have been complied with. A Court would need to be satisfied
that a debt sought to be enforced was (or was not, as the case
may
be) subject to the NCA and the most efficient way to do so would be
to peruse the underlying documentation.
The present case is a good example as to why all the relevant
documentation should be before the Court. The debtors have not
filed
an affidavit opposing summary judgment but they have instructed
counsel to argue a number of legal points. They clearly
have no
defence to the merits of the Bank’s claims, but they are
entitled to raise, and demand compliance with, the provisions
of the
NCA which,
inter alia
, is aimed at consumer credit protection
and “
providing for a consistent and harmonised system of
debt restructuring, enforcement and judgment, which places priority
on the
eventual satisfaction of all responsible consumer obligations
under credit agreements
”.
6
Mr Viviers led the Court through an veritable maze of provisions in
the NCA to demonstrate that the statute had no application
in the
present case. Mr Wessels did likewise and came to a different
conclusion. In the light of my finding regarding the failure
to
attach the relevant documentation, it is not necessary to resolve
this dispute. Suffice it to say that the matter may well
have been
capable of speedier resolution had the documents been before the
Court.
SIMPLE OR COMBINED SUMMONS
?
In light of my view that it is necessary to annex the relevant
documentation to the Plaintiff’s summons, the question that
arises is whether it is permissible to continue to make use of a
simple summons or whether a combined summons is now preferable.
While Thring J, in the
Jacobs case
, was satisfied that
a simple summons could incorporate the relevant documents such as a
mortgage bond and/or an agreement of
loan, in my judgment the
situation is now different given the myriad allegations which a
plaintiff is required to make regarding
NCA compliance where the
statute is applicable
7
and
compliance with the constitutional imperatives prescribed by Section
26(1) of the Constitution.
The necessity to incorporate these allegations in the summons and to
annex the relevant documentation thereto will of necessity
lead to
the summons losing it conciseness. In such event, it seems to me
that it is preferable to make use of a combined summons.
But what of that peremptory language of Rules 17(2)(a) and (b) which
oblige a plaintiff to use a simple summons for recovery
of a debt or
liquidated sum and a combined for other cases? In the first place,
one must have regard to the fact that the current
rules of practice
predated both the NCA and the constitutional era. It may therefore
be necessary for the Rules Board to reconsider
the position in the
light of prevailing commercial practices and realities.
However, I am of the view that a purposive interpretation of Rule
17(2)(a) will not preclude a plaintiff from commencing action
for
recovery of a debt by using a combined summons. The provisions of
the NCA and Section 26 of the Constitution are aimed at
offering
additional protection to debtors, and if the rule is interpreted
against that setting, it seems to me that the necessity
to amplify
the allegations setting out the cause of action and the
incorporation of relevant documentation takes the claim outside
the
dichotomous characterisation of claims in terms of Rule 17(2) and
requires a
sui generis
approach. The effect is that a
combined summons is appropriate in such cases notwithstanding the
provisions of Rule 17(2)(a).
CONCLUSION
In my judgment it is appropriate to exercise the Court's overriding
discretion to refuse summary judgment in the Uys matter.
8
Not only has the Court been “
left in the dark
”
9
as to the precise nature of the contractual relationship between the
parties, it has been deprived of insight into the relevant
mortgage
bond and has been asked to enforce execution proceedings in respect
of a bond which has not been passed in favour of
the Plaintiff Bank.
There is no reason why costs should not follow the results in this
matter: there is nothing which is likely to emerge at the
trial in
this matter which will demonstrate that the Defendants’
opposition to the claims is spurious.
10
The Plaintiff has only itself to blame for its failure to attach the
necessary documentation.
ORDERS
IN THE MATTER OF
ABSA BANK LIMITED v ROBERT DOUGLAS MARSHALL
AND THREE OTHERS
(CASE NO. 8850/2011)
THE FOLLOWING
ORDER IS MADE:
the First Respondent is to file his opposing affidavit in the
summary judgment application within ten (10) Court days of this
order;
all costs are to stand over for later determination.
IN THE MATTER OF
ABSA BANK LIMITED v PETRUS JACOBUS UYS AND
ANOTHER
(CASE NO. 11921/2011)
THE FOLLOWING ORDER IS
MADE:
the application for summary judgment against the First and Second
Respondents is refused;
the aforesaid Respondents are granted leave to defend the matter;
the Applicant is ordered to pay the First and Second Respondents’
costs of suit in this application.
___________________
P.A.L.GAMBLE
1
1992
(2) SA 388
(C) at 397I – 398B
.
2
See
Harms
, Civil Procedure in the Supreme Court , para
J7
.
3
McKinnell
v Vickers
1914 CPD 683
;
Volkskas v De Wet and
Another
1945 WLD 211
and
Kotze v Van Vreden
1948 (2) SA 934
(SWA)
.
4
1959
(3) SA 362
(W)
.
5
1976
(2) SA 226
(T)
.
6
Section
3(i) of the NCA.
7
See
Rossouw and another v Firstrand Bank Limited
2010 (6) SA 439
(SCA) at 455-7.
8
Collett
v Firstrand Bank Limited
2011 (4) SA 508
(SCA) at 518G
.
9
See
Jacobs case
(
supra
) at p 22
.
10
See
Jacobs case
(
supra
) at p 26
.