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[2014] ZAWCHC 84
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Benade and Another v Absa Bank Limited (11271/2012) [2014] ZAWCHC 84 (16 May 2014)
IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE, CAPE TOWN DIVISION)
Case
No: 11271/2012
DATE:
16 MAY 2014
In
the matter between:
LOUIS
LE ROUX
BENADE
....................................................................
First
Applicant
JACOBA
SOPHIA
BENADE
............................................................
Second
Applicant
And
ABSA
BANK
LIMITED
................................................................................
Respondent
JUDGMENT: 16 MAY 2014
PILLAY AJ:
INTRODUCTION
1.
On 11
June 2012 the Respondent (“ABSA Bank”) instituted legal
proceedings against the Applicants by way of Simple Summons.
2.
On 26
July 2012 ABSA Bank delivered an application for summary judgment,
which application was dismissed with costs on 4 September
2012.
3.
On 15
October 2012 ABSA Bank delivered its Declaration. In its
Declaration:
3.1.
ABSA
Bank claimed an amount of R 6 181 893. 26, interest and
costs from the Applicants. It also sought an Order
declaring
Erf 680 Witsand (“the property”) executable.
3.2.
ABSA
Bank sought payment pursuant to an agreement that was concluded
between it and the Applicants in or about July 2002.
3.3.
The
Second Applicant (“Mrs Benade”) was cited in her capacity
as the principal debtor and the First Applicant (“Mr
Benade”)
was cited by virtue of a suretyship agreement that he had signed.
3.4.
ABSA
Bank alleged that as security for the amounts owing, it had
registered covering bonds over the property. In its claim,
ABSA
Bank alleged that it does not know if the property sought to be
declared executable is the primary residence of the principal
debtor
or whether it is occupied or not but that it accepts that the Court
will have to consider all relevant circumstances in
order to
determine whether the property should be declared executable.
4.
On 16
November 2012 the Applicants delivered a notice in terms of Rule 23
(1) and Rule 30 in terms whereof they alleged that the
Declaration is
vague and embarrassing and that it constitutes an irregularity in
terms of Rule 30.
5.
On 4
February 2013 ABSA Bank delivered a notice of bar.
6.
On 14
February 2013, ABSA Bank instituted an application for default
judgment.
7.
The
Applicants instituted this application on 26 March 2013 to uplift the
bar and give the Applicants leave to deliver their exception.
THE LAW
8.
Rule
27(1) provides as follows:
“
27
Extension of Time and Removal of Bar and Condonation
(1) In
the absence of agreement between the parties, the court may upon
application on notice and
on good cause shown, make an order
extending or abridging any time prescribed by these Rules or by an
order of court or fixed by
an order extending or abridging any time
for doing any act or taking any step in connection with any
proceedings of any nature
whatsoever upon such terms as to it seems
meet.”
9.
It is
well established that the requirement of “good cause”
gives a Court a wide discretion.
[1]
10.
Three
requirements have been crystallised in this regard:
10.1.
An
Applicant should file an affidavit satisfactorily explaining the
delay. In this regard, it has been held that a defendant
must
at least furnish an explanation of his or her default sufficiently
fully to enable the Court to understand how it really came
about and
to assess his or her conduct and motives.
[2]
10.2.
An
Applicant should satisfy the Court on oath that he or she has a bona
fide defence.
[3]
In this regard, it has been held that at a minimum the applicant must
show that his or her defence is not patently unfounded
and that it is
based upon facts which, if proved, would constitute a defence.
[4]
10.3.
The
grant of the indulgence sought must not prejudice the plaintiff in
any way that cannot be compensated for by a suitable order
as to
postponement and costs.
[5]
HAVE THE APPLICANTS
SATISFACTORILY EXPLAINED THE DELAY?
11.
According
to the Applicants:
11.1.
After
delivery of their notice in terms of Rule 23(1), it was their
intention to proceed with the exception and their attorney held
such
instructions.
11.2.
By
the time that the Applicants’ attorney closed his offices on 21
December 2012, there had been no response to the Rule 23(1)
Notice
from ABSA Bank’s attorneys; there had also been no response
from ABSA’s attorneys by the time the Applicant’s
attorneys reopened office in January 2013.
12.
According
to the Applicants’ attorney:
12.1.
He
enquired in writing from his correspondent on 21 January 2013 as to
whether ABSA Bank had responded to the Rule 23 Notice.
12.2.
He
telephonically contacted ABSA Bank’s attorneys on 21 January
2013 in order to inter alia get confirmation that they were
considering an amendment to the Particulars of Claim after having
received the Rule 23(1) Notice. The Applicants’ attorneys
also
wanted confirmation that it was not necessary to deliver the
exception in terms of Rule 23. During this conversation,
he
spoke to one Miranda Britz and asked: (a) whether their client
intended amending their Particulars of Claim; and (b) if so,
when
they would be in a position to deliver the amended Particulars of
Claim. Ms Britz informed the Applicants’ attorney
that
she could not provide him with an answer at that stage but that she
would revert to him. Ms Britz, according to the
Applicants’
attorneys, created the impression that he did not have to do anything
until she called him back. On this
basis, it is alleged that
the Applicants attorneys did not deliver a formal exception.
12.3.
On 25
January 2013, the Applicants’ attorneys’ secretary phoned
ABSA Bank’s attorneys to speak to Ms Britz in
order to
ascertain a response to his previous enquiry. It is alleged
that Ms Britz was not available and a message was left
for her.
12.4.
On 28
January 2013 the Applicants’ correspondent attorneys confirmed
in writing that they had had no response to the Rule
23(1) notice.
Thereafter, as stated a notice of bar was delivered.
12.5.
There
is a practice in this division that attorneys warn one another before
a demand for a plea is delivered. This, according
to the
Applicants is a universal practice that is complied with; ABSA Bank
does not dispute this allegation and it is common cause
that ABSA’s
attorneys gave no such prior warning.
13.
According
to Ms Britz, she only attended to the file until August 2012.
However, despite this allegation, the record shows that
on 15 October
2012 she sent an email to the Applicants’ attorney concerning
this matter.
14.
No
explanation is provided for the time lapse between the Notice of Bar
having been delivered and the institution of these proceedings.
This notwithstanding, I am willing to accept that the
explanation provided by the Applicants is a satisfactory one in
relation
to the delay in that it explains the Applicants’
default in responding to the Notice of Bar and enables me “to
understand
how it really came about” and to assess the
Applicants’ conduct and motives.
DO THE APPLICANTS HAVE A BONA
FIDE DEFENCE?
15.
In
support of their contention that they do have a bona fide defence,
the Applicants contend as follows:
15.1.
The
parties concluded an agreement whereby ABSA Bank would sell the
property, and until the property had been sold ABSA Bank would
not
institute proceedings against the Applicants.
15.2.
They
have a defence of lis pendens as there is a pending action under case
no. 17447/2011.
15.3.
The
Applicants contend that credit was provided in a reckless manner
contrary to the terms of section 80 and 81 of the National
Credit Act
No. 34 of 2005 (“the
National Credit Act&rdquo
;).
15.4.
The
Declaration is vague and embarrassing.
The Agreement
16.
The
Applicants contend, as one of their defences that the parties
concluded an agreement whereby ABSA Bank would sell the property,
and
until the property had been sold, ABSA Bank would not institute
proceedings against the Applicants. In this regard, the
Applicants allege that they entered into a partly written, partly
oral agreement with ABSA Bank.
17.
ABSA
Bank denies the alleged agreement contended for by the Applicants.
In amplification, it attaches a Help-u-sell agreement
together with a
special power of attorney, signed on 15 September 2011. The
Help-u-sell agreement (“the agreement”)
is signed by both
Applicants but not signed by ABSA Bank. Despite this, ABSA Bank
relies on its terms.
18.
Key
aspects of the agreement are as follows:
18.1.
The
agreement is signed by Ms Benade in her capacity as the principal
debtor. It is also signed by Mr Benade in his capacity
as first
surety.
18.2.
Under
the heading “General” inter alia, the following is
stated:
“
7.1.
Notwithstanding anything to the contrary herein, the BANK may proceed
with legal action against debtors (including
obtaining judgment
against debtors) in terms of the credit agreement, pending
implementation of this agreement.
....
7.3.
This is the entire recordal of the terms and conditions agreed upon
between the parties in respect
of the debt. [The debt is
defined as R 5 815 566.93 in respect of monies lent and
advanced by the Bank to the PRINCIPAL
DEBTOR in terms of a mortgage
bond backed agreement account number ....].
7.4. No
addition to, variation, novataion or agreed cancellation of any
provision of this agreement
shall be binding upon the parties unless
reduced to writing and signed by or on behalf of all the parties.
7.5. No
indulgence or extension of time which any party may grant to the
other shall constitute a
waiver of or, whether by estoppel or
otherwise, limit any of the existing or future rights of the grantor
in terms hereof, save
in the event and to the extent that the grantor
has signed a written document expressly waiving or limiting such
right.”
19.
The
effect of the aforementioned provisions is that the Applicants’
contention for a partly written, partly oral agreement
is unlikely to
be sustained. Furthermore, all the terms of the partly written
partly oral agreement as contended for by the
Applicants is
irreconcilable with clause 7.1 of the agreement signed by the
Applicants.
20.
In
addition, on
21
May 2012
the Applicants addressed an email to the attorneys for ABSA Bank in
which:
20.1.
They
acknowledged that they signed a Help-you-sell agreement during
September 2011.
20.2.
They
requested whether the attorneys would be willing to approach ABSA
Bank for more time to try and sell the property.
21.
In my
view, there would have been no need for the latter request had the
agreement between the parties been that until the property
had been
sold, ABSA Bank would not institute proceedings against the
Applicants.
22.
In
the circumstances, I am not persuaded that the agreement contended
for by the Applicants constitutes a bona fide defence.
Lis Pendens
23.
The
defence of lis pendens is, in my view, not seriously pursued by the
Applicants. Indeed, in the replying affidavit the
following is
stated: “ek was nie bewus van die feit dat saaknommer
17447 behoorlik terug getrek is nie” and in
paragraph 3.2.1.
“dit blyk nou date die Respondent wel die saak terrug getrek
het.”
24.
In
any event, the complaint appears to be that there was no proper
withdrawal of the action both on the party in question and the
Court. In this regard, it cannot be disputed that the
Applicants received notice of this when the answering affidavits in
this application were served.
25.
I am
accordingly of the view that this defence unduly technical and cannot
be sustained.
The Declaration is vague and
embarrassing.
26.
As a
further defence, the Applicants contend that the Declaration is
excipiable on the grounds that it is vague and embarrassing.
27.
It is
well accepted that an exception is in fact a pleading and thus falls
squarely within the wording of
rule 26.
[6]
28.
It
must, however be remembered that even a successful exception does not
result in a dismissal of the Plaintiff’s action.
[7]
Accordingly, the contention that the Declaration is vague and
embarrassing, does not in my view constitute a defence to the
action.
The Applicants’ contention
that credit was provided in a reckless manner contrary to the terms
of
section 80
and
81
of the
National Credit Act.
>
29.
As
regards the contention that credit was provided in a reckless manner,
it is alleged that ABSA Bank loaned an amount of R 2 000 000
to the First Respondent in a reckless manner and contrary to the
provisions of
section 80
and
81
of the
National Credit Act.
30.
In
amplification, it is alleged that ABSA Bank:
30.1.
neglected
to do a proper investigation into the Second Applicant’s
financial position;
30.2.
neglected
to ascertain whether the Applicants had a general understanding and
appreciation of the risks and costs of the intended
credit;
30.3.
neglected
to ascertain and ensure that the Applicants understood their rights
and obligations as consumers in terms of the credit
agreement;
30.4.
neglected
to do a proper investigation into the Applicants’ financial
means, prospects, commitments and capacity to be able
to repay the
debt.
31.
ABSA
Bank does not specifically deny these allegations but contends that
not a single shred of evidence is provided in support of
the
contention that credit was extended recklessly and no positive
averments are made as to the Applicants financial position at
the
time. Indeed, ABSA Bank does not explain the process that was
follow prior to the loan of R 2 million having been extended.
32.
Instead,
in response to the Applicants’ averments I was referred to the
dictum in
Die
Dros (Pty) Ltd v Telefon Beverages CC
2003 (4) SA 207
(C) where it was held as follows:
“
[28]
It is trite law that the affidavits in motion proceedings serve to
define not only the issues between the parties, but also
to place the
essential evidence before the Court (see Swissborough Diamond Mines
(Pty) Ltd and Others v Government of the Republic
of South Africa and
Others
1999 (2) SA 279
(W) at 323G) for the benefit of not only the
Court but also the parties. The affidavits in motion proceedings must
contain factual
averments that are sufficient to support the cause of
action on which the relief that is being sought is based. Facts may
be either
primary or secondary. Primary facts are those capable of
being used for the drawing of inferences as to the existence or
non-existence
of other facts. Such further facts, in relation to
primary facts, are called secondary facts. (See Willcox and Others v
Commissioner
for Inland Revenue
1960 (4) SA 599
(A) at 602A; Reynolds
NO v Mecklenberg (Pty) Ltd
1996 (1) SA 75
(W) at 78I.) Secondary
facts, in the absence of the primary facts on which they are based,
are nothing more than a
deponent's own conclusions (see
Radebe and Others v Eastern Transvaal Development Board
1988 (2) SA
785
(A) at 793C - E) and accordingly do not constitute evidential
material capable of supporting a cause of action.”
33.
In my
view, the allegations made by the Applicants as regards reckless
credit are indeed sufficient to give rise to a bona fide
defence:
33.1.
First,
section 81(2)
of the
National Credit Act imposes
certain obligations
on a credit provider. It provides as follows:
“
(2)
A credit provider must not enter into a
credit agreement without first taking reasonable steps to assess-
(a)
the proposed consumer's-
(i)
general understanding and appreciation of the risks and costs of the
proposed
credit, and of the rights and obligations of a consumer
under a credit agreement;
(ii)
debt re-payment history as a consumer under credit agreements;
(iii)
existing financial means, prospects and obligations; and
(b)
whether there is a reasonable basis to conclude that any commercial
purpose may prove to
be successful, if the consumer has such a
purpose for applying for that credit agreement.”
33.2.
In
light of the aforegoing, I am of the view that a litigant is entitled
to allege non compliance with these obligations without
anything
further.
33.3.
While
I accept that this defence pertains to only R 2 million of the total
amount claimed, this is, in my view sufficient to constitute
a
defence for the purposes of the present application. Should the
relief sought herein not be granted, the consequence is
that even
this limited defence will not be placed before a Court for
adjudication and determination.
33.4.
Of
relevance in this regard is the judgment of
COE
Absa Bank v Coe
Family Trust and Others
2012
(3) SA 184
(WCC) at 191D (though in the context of an application for
summary judgment), where this Court held:
“
I
cannot apply these considerations to this dispute because this court
is dealing with a summary judgment application. Therefore,
to the
extent that Barkhuizen and Brisley are relevant, evidence as
indicated may be relevant to the determination of the issues
at
trial, that is, the circumstances in which the agreement was entered
into and the kind, if any, of assessment that was entered
into by the
plaintiff in terms of
s 81(2)
, and whether this was insufficient for
the purposes of the Act as I have outlined it. In this way, the kind
of balance of interests
foreshadowed in Barkhuizen supra can be
properly assessed.
In
all of these circumstances it appears to me that the defendants
have placed before this court a defence sufficient
to
raise issues which could only be determined by a trial court.
Therefore, summary judgment is dismissed with costs; ...”
34.
I am
of the view that the defence of the reckless provision of credit does
indeed constitute a bona fide defence and is sufficient
to pass the
threshold hurdle of showing that the defence is “not patently
unfounded”.
35.
Finally,
in the exercise of my discretion I do not think it would be just and
fair to punish a litigant on account of the conduct
of their legal
representative.
[8]
Of relevance in this regard is the fact that the Applicants’
legal representatives held instructions to proceed with
the exception
subsequent to the filing of the Rule 23(1) Notice.
36.
Furthermore,
I am mindful of the fact that the Applicants are two persons of
advanced age and that they reside in the property that
is the subject
of these proceedings.
37.
As
regards the question of costs, I do not believe that the opposition
to the application was ill advised or unnecessary.
In my view
it was indeed reasonable.
CONCLUSION
38.
In
the result, I make the following Order:
38.1.
The
bar to the Applicants’ pleading in Case No 11271/2012 is
removed.
38.2.
The
Applicants are given leave to deliver their exception within a period
of ten days from today.
38.3.
The
Applicants’ are ordered to pay the Respondent’s costs
jointly and severally, the one paying the others to be absolved.
38.4.
The
application for default judgment is postponed sine die.
PILLAY,
AJ
Acting Judge
of the Cape High Court
16 May 2014
[1]
Du Plooy v Anwes
Motors (Edms) Bpk
1983 (4) SA 212
(O) at 216H to 217A.
[2]
Silber v Ozen
Wholesalers (Pty) Ltd
1954 (2) SA 345
(A) at 353A.
[3]
Dalhouzie v Bruwer
1970 (4) SA 566
(C) at 572A.
[4]
Du Plooy v Anwes
Motors (Edms) Bpk
1983 (4) SA 212
(O) at 217H.
[5]
Dalhouzie v Bruwer
1970 (4) SA 566
(C) at 572A.
[6]
Landmark Mthatha
(Pty) Ltd v King Sabata Dalindyebo Municipality: In re African Bulk
Earthworks (Pty) Ltd v Landmark Mthatha (Pty)
Ltd and Others
2010
(3) SA 81
(ECM) at par 13 and Tyulu and Others v Southern Insurance
Association Ltd
1974 (3) SA 726
(E).
[7]
Group Five
Building Ltd v Govt of the RSA (Minister of Public Works & Land
Affairs)
[1993] ZASCA 4
;
1993 (2) SA 593
(A).
[8]
Creative Car Sound
and Another v Automobile Radio Dealers Association 1989 (Pty) Ltd
2007 (4) SA 546
(D) at par 43.