Bonugli and Another v Standard Bank of South Africa Ltd

• Jurisdiction: South Africa
• Judge: Farlam JA, Cachalia JA, Malan JA, Wallis JA and Petse AJA
• Judgment Date: 30 March 2012
• Docket Number: 266/11 [2012] ZASCA 48
• Hearing Date: 15 February 2012
• Counsel: BJ Manca SC (with AM Smalberger) for the appellants. AO Cook SC (with JA Babamia) for the respondent.
• Court: Supreme Court of Appeal

Wallis JA and Petse AJA (Farlam JA, Cachalia JA and Malan JA concurring): A

Introduction

[1] The respondent, the Standard Bank of South Africa Ltd (as plaintiff) B successfully sued the appellants (as defendants) in the Western Cape High Court for payment of the sum of R16 958 969 together with interest and costs of suit, inclusive of the costs occasioned by the employment of two counsel.

C [2] The first appellant, Beulah Evelyn Bonugli, was sued both in her personal capacity and in her representative capacity as a trustee of Rivonia Close Trust (RCT). The second appellant, Christopher Stephen Bonugli, was sued in his representative capacity as a trustee of RCT. In effect therefore the action was against Mrs Bonugli and RCT. The appeal to this court is with the leave of the court below.

D [3] The bank's action was founded on a deed of suretyship purporting to bind both Mrs Bonugli and RCT as sureties for the debts of Union Charter Trust (UCT) under four leases in respect of Pilatus PC12 aircraft. The leases and the suretyship were concluded on different dates in Johannesburg. Mrs Bonugli represented RCT in executing the deed of E suretyship. She also represented UCT in concluding the leases. In each instance she claimed to be authorised to do so by her fellow trustees. UCT's indebtedness, although not the amount thereof, was admitted. This is hardly surprising as UCT had been sequestrated by the bank in respect of that indebtedness.

F [4] Pursuant to its right in terms of the contracts the respondent recovered possession of the four aircraft in May 2006 and on various dates sold them. The amount of UCT's indebtedness in respect of each aircraft, save one, was agreed in the course of the trial. We will need to revert to that one when dealing with the question of quantum.

G [5] The deed of suretyship, described as a general guarantee, was executed on or about 22 April 1998. In terms of the guarantee RCT and the first appellant undertook liability, jointly and severally, as sureties and co-principal debtors in solidum with UCT for the due and faithful payment by UCT to the respondent of all sums of money then owing or H which might thereafter become owing in relation to any cause of indebtedness whatsoever, and acknowledged that any admission or acknowledgement of indebtedness by UCT would be binding upon them and that a certificate signed by a manager of the respondent, whose appointment need not be proved, as to the amount owing by UCT to the I respondent, would constitute prima facie proof of such indebtedness.

[6] Subsequent to the sequestration of UCT and shortly prior to the commencement of this action a number of certificates of indebtedness were issued by a manager employed by the bank, in terms of which various amounts were certified as due and owing to the respondent by J UCT. Although some time was spent in the trial over the validity of these

Wallis JA and Petse AJA (Farlam JA, Cachalia JA and Malan JA concurring)

certificates the issues in that regard were largely overtaken by the A agreement on quantum and nothing in this appeal turns on them.

[7] The defences raised by Mrs Bonugli and RCT were:

(a)

Rectification, in that they claimed that the suretyship did not correctly reflect the common intention of the respondent and the B appellants, because it was only intended to guarantee UCT's obligations in terms of an earlier instalment sale agreement, which UCT concluded with the respondent on 22 April 1998, in respect of an aircraft with registration number BEB-180 (the BEB aircraft). In other words, notwithstanding the general terms of the guarantee, it was, so they contended, limited to a single transaction and inapplicable C to the four lease agreements giving rise to UCT's indebtedness to the bank.

(b)

A defence of lack of authority based on the contention that Mrs Bonugli was not authorised to represent and bind RCT to a general guarantee at the time she executed the deed of suretyship, D but only a guarantee limited to the earlier lease concluded in relation to the BEB aircraft.

(c)

A special plea (which was filed on 28 May 2007) averring that the Western Cape High Court had no jurisdiction to entertain the E respondent's action against RCT because the leases were concluded in Johannesburg and the deed of suretyship was also executed in that city, while the second appellant was permanently resident in Sydney, Australia, when the respondent's action was instituted.

[8] The court below found that the bank had established its case against F Mrs Bonugli and RCT. In other words, it held that it had jurisdiction in relation to the claim against RCT; that the defences of rectification and lack of authority were unsound and that the issues raised by the defendants in regard to the quantum were unfounded.

[9] The appellants relied on four discrete grounds of appeal in their G application for leave to appeal, but in their heads of argument relied on three grounds only for purposes of this appeal, namely that:

(a)

The court below erred in finding that it had jurisdiction to entertain the bank's claim;

(b)

The court below erred in not granting the prayer for rectification of the guarantee; and H

(c)

The court below erred in finding that the respondent had established the quantum of its claim in the amount of R16 958 969.

Jurisdiction I

[10] The appellants asserted in this court, as they did in the court below, that the latter court lacked the requisite jurisdiction to entertain the respondent's claim against RCT. In this regard it was contended that, as the various contracts founding the respondent's claim against the appellants were concluded in Johannesburg, none of the elements of the cause of action relate to any cause arising within the area of jurisdiction J

Wallis JA and Petse AJA (Farlam JA, Cachalia JA and Malan JA concurring)

A of the Western Cape High Court. [1] They said that the court below could not have exercised jurisdiction over the Bonuglis in their representative capacity — they both being necessary parties in order to bring RCT before the court — because the second appellant resides in Sydney and was permanently resident there when the respondent's action was instituted, B the court below lacked jurisdiction to entertain the claim against the appellants in their representative capacity. [2] In technical legal language he is a peregrinus of South Africa and is not subject to the jurisdiction of our courts save in limited circumstances.

[11] The respondent countered the appellants' contentions that the C court below lacked jurisdiction to entertain the claim on a number of bases. It pointed out that in terms of the guarantee, RCT agreed 'that any division of the (High Court) of South Africa . . . shall have jurisdiction with regard to any legal proceedings arising' under the guarantee. RCT also agreed that the guarantee would be governed by the laws of the Republic of South Africa. Furthermore reliance was placed on s 5 of the D Trust Property Control Act 57 of 1988 (the Act) which provides:

'Notification of address

A person whose appointment as trustee comes into effect after the commencement of this Act, shall furnish the Master with an address for E the service upon him of notices and process and shall, in case of change of address, within 14 days notify the Master by registered post of the new address.'

It is common cause in this appeal that the address given by both appellants, as trustees of RCT, to the master in terms of s 5 of the Act was that reflected in the respondent's summons. That address was F within the area of jurisdiction of the trial court.

[12] On the basis of those facts it was submitted on behalf of the respondent, relying on Hay Management Consultants (Pty) Ltd v P3 Management Consultants (Pty) Ltd [3] at paras 13 – 15, that the address furnished G to the master in terms of s 5 of the Act is akin to a domicilium clause in a contract and, together with the other two factors, the furnishing of this address amounted to a submission to the jurisdiction of the Western Cape High Court.

[13] In the alternative the bank contended that the failure by RCT to H contest the jurisdiction of the trial court, in the affidavit deposed to by Mrs Bonugli opposing summary judgment, amounted to a submission to the jurisdiction. In response to that contention it was submitted in the appellants' heads of argument that rule 32(3)(b) of the Uniform Rules

Wallis JA and Petse AJA (Farlam JA, Cachalia JA and Malan JA concurring)

only requires of a defendant resisting an application for summary A judgment to satisfy the court that there is a bona fide defence to the action, and no more. Consequently, so the argument continued, the defences that the appellants raised in their opposing affidavit having been sufficient to meet the threshold required by rule 32(3)(b), it was not necessary for them also to have raised lack of jurisdiction as a defence. B

[14] In holding that it had the necessary...