Buying Exchange Company v Araujo and Another (2420/2007) [2007] ZAFSHC 120 (1 November 2007)

Buying Exchange Company v Araujo and Another (2420/2007) [2007] ZAFSHC 120 (1 November 2007)

The court found that the applicant's claim for perfection of security under the notarial covering bond was based on a disputed debt. The applicant initially claimed R84,240.50, later reduced to R74,267.41, while the respondents maintained a credit balance. The existence of material disputes of fact regarding the indebtedness rendered the matter unsuitable for resolution on motion. The court held that the applicant should have anticipated the dispute and proceeded by way of action rather than motion. As the security is accessory to the main debt, and the debt is not established, the applicant is not entitled to the relief sought. The application was dismissed with costs.

Citation
[2007] ZAFSHC 120
Parties
Applicant: Buying Exchange Company (Proprietary) Limited; Respondent: J A A Araujo; Respondent: S F R Dos Santos
Court
Free State High Court, Bloemfontein
Jurisdiction
South Africa
Judgment Date
1 November 2007
Case Number
2420/2007
Procedural Posture
Urgent Application / Final Determination of Urgent Application for Perfection of Security Under Notarial Bond.
Outcome
Application dismissed with costs; rule nisi discharged.
Judges
M.M. Mabesele
Legal Topics
Notarial Covering Bond, Dispute of Fact, Motion Vs Action, Security for Debt
Civil Procedure Commercial and Corporate Notarial Covering Bond Dispute of Fact Motion Vs Action Security for Debt

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Parties

Buying Exchange Company (Proprietary) Limited

Applicant

J A A Araujo

Respondent

S F R Dos Santos

Respondent

Procedural Posture

Urgent Application / Final Determination of Urgent Application for Perfection of Security Under Notarial Bond.

Legal Issues

  1. 1 Whether the applicant is entitled to perfect security under the notarial covering bond given the disputed indebtedness.
  2. 2 Whether the dispute of fact regarding the respondents' indebtedness can be resolved on the papers.
  3. 3 Whether the application should be dismissed or referred for oral evidence.

Ratio Decidendi

The court found that the applicant's claim for perfection of security under the notarial covering bond was based on a disputed debt. The applicant initially claimed R84,240.50, later reduced to R74,267.41, while the respondents maintained a credit balance. The existence of material disputes of fact regarding the indebtedness rendered the matter unsuitable for resolution on motion. The court held that the applicant should have anticipated the dispute and proceeded by way of action rather than motion. As the security is accessory to the main debt, and the debt is not established, the applicant is not entitled to the relief sought. The application was dismissed with costs.

Court Disposition

Application dismissed with costs; rule nisi discharged.

Orders

  • The rule nisi issued on 5 June 2007 is discharged.
  • The applicant is ordered to pay the costs.