Absa Bank Ltd v Lecoko NO

• Jurisdiction: South Africa
• Judge: Rampai J
• Judgment Date: 31 January 2008
• Docket Number: 2521/2007
• Court: Orange Free State Provincial Division
• Hearing Date: 20 September 2007
• Citation: 2008 JDR 1054 (O)

Rampai J:

[1]

This is an application for summary judgment. The plaintiff sues the second defendant for payment the sum of R764 664.04 and ancillary forms of relief. The claim is based on a suretyship contract which the second defendant signed on behalf of a business entity called "Die Goedgeleë Boerdery Trust" in favour of the plaintiff.

[2]

The plaintiff's claim is fully set out in the summons which the registrar issued on 12 June 2007 and the sheriff served upon the second defendant on 27 June 2007. On 13 July 2007 the second defendant filed notice of his intention to defend

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the action. On 3 August 2007 the plaintiff launched this application for summary judgment.

[3]

The notice of application was accompanied by a supporting affidavit signed by Ms Rozanne Niemann, the plaintiff's manager responsible for debt collection services. She confirmed the plaintiff's cause of objection, the quantum of the claim as well as the relief sought as set out in the summons from which this application for summary judgment stemmed. She concluded by expressing the opinion that, although the second defendant had entered an appearance, he had no bona fide defence to the plaintiff's claim and that he had done so for the sole purpose of delaying the action.

[4]

The summary judgment application is opposed. In his opposing affidavit the second defendant stated that the aforesaid trust was created during 2005 while the first defendant was still in his employ. On 13 September 2005 he took over the trust from the first defendant. Since then he was the only trustee. Subsequent to the take-over he called at the plaintiff's in connection with the bond obligations of the trust and the signing powers on its current account. He and the bank agreed that he would assume responsibility in connection with the bond obligations of the trust and that he would also have the signing powers on its current account. On the first occasion he apparently signed no documents.

[5]

He once again visited the plaintiff. On the second occasion he signed certain documents relating to the two matters

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previously agreed upon. At the request of the plaintiff's personnel, he signed documentation in respect of the signing powers at the plaintiff's offices. However, as regards the signing of the documentation pertaining to the transfer of the bond obligations, the plaintiff's personnel sent him to the plaintiff's lawyers where he signed such documentation.

[6]

During his second visit he signed the documents which were presented to him without reading them and under the mistaken but innocent belief that such documentation related to the mere assumption of the bond obligations of the trust and the signing powers on its current account only. He concluded by stating that he would not have signed, as he did, if only the plaintiff's personnel or its attorneys had drawn his attention to the danger that by signing he was binding himself as surety and co-principal debtor.

[7]

A cursory overview of the principles of law is necessary. The plaintiff's claim is backed up by four annexures to the summons, namely:

Firstly, the mortgage bond over the farm registered in favour of the plaintiff – Annexure "A";

Secondly, the certificate of balance in respect of the capital and interest as on 3 July 2007 – annexure "B";

Thirdly, the breakdown of the rates of interest in accordance with the provisions of the Usury Act, No. 73 of 1968, which rates had been applied to the bond loan – annexure "C";

Fourthly, the suretyship agreement – annexure "D".

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According to all these documents the second defendant appears, prima facie, to be indebted to the plaintiff. It is trite that the onus of proving otherwise rests on the second defendant.

[8]

The respondent is required to show that he has a bona fide defence to the plaintiff's claim and that he is not playing for time at the expense of the plaintiff. In his opposing affidavit he must fully disclose the nature and the grounds of his defence and the material facts upon which it is founded. Vide High Court Rule 32(3)(b).

[9]

The opposing affidavit must contain a sufficient exposition of the facts, which if accepted as true, would constitute a good defence in law. Vide ESTATE POTGIETER v ELLlOTT 1948 (1) SA 1084 (C) on 1087; WRIGHT v VAN ZYL 1951 (3) SA 488 (C) at 492 C; BREITENBACH v FIAT SA (EDMS) BPK 1976 (2) SA 226 (T) at 227 F - H.

[10]

If the second defendant's opposing affidavit raises an arguable case, then he will have discharged the onus and the plaintiff's summary judgment application will not succeed and leave to defend will have to be granted to him. Vide EISENBERG'S v OFS TEXTILE DISTRIBUTORS (PTY) LTD 1949 (3) SA 1047 (O) on 1055; LOMBARD v VAN DER WESTHUIZEN 1953 (4) SA 84 (C) at 89 A; AREND AND ANOTHER v ASTRA FURNISHERS (PTY) LTD 1974 (1) SA 298 (C) at 316 C.

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[11]

In determining whether or not the second defendant has put up an arguable case to justify letting him go on to have the main action tried, it is not expected of him to formulate his opposing affidavit with the precision of a pleading - HERBERT v STEELE 1953 (3) SA 271 (T) at 276 C.

[12]

Our courts are reluctant to deprive a defendant of an opportunity of having a full blown hearing of a dispute in a case where he has a prima facie arguable defence. Because summary judgment is a drastic procedure with serious repercussions for the unsuccessful defendant, this extra-ordinary relief is never granted where there is doubt cast on the merits of the plaintiff's case. Vide FIRST NATIONAL BANK OF SA LTD v MYBURGH AND ANOTHER 2002 (4) SA 176 (C) at 180 E; FOURLAMEL (PTY) L TD v MADDISON 1977 (1) SA 333 (AD) at 347 H.

[13]

Where, as in this case, the defendant's defence is based on misrepresentation, trial is the preferred civil procedure for the proper adjudication and substantive resolution of a dispute. Vide ESTATE POTGIETER v ELLlOTT 1948 (1) SA 1084 (C) on 1087.

[14]

Now I proceed to examine the facts. The second...