Fiarara Investments (Pty) Ltd v C.P. Sykes CC and Another (12017/07) [2008] ZAKZHC 49 (15 July 2008)

IN THE HIGH COURT OF SOUTH AFRICA REPORTABLE

NATALPROVINCIAL DIVISION

Case No. 12017/07

In the matter between

FIARARA INVESTMENTS (PTY) LTD Applicant

and

C.P. SYKES CC First Respondent

CARL SYKES

Second Respondent

______________________________________________________________

J U D G M E N T

Delivered:

15 July 2008

TSHABALALA JP

[1] The applicant, Fiarara Investments (Pty) Ltd, (plaintiff) claims in a summary judgment application the amount of R768 000,00 allegedly due by first and second respondents (first and second defendants), in terms of a written loan agreement. First respondent registered a mortgage bond over Portion 25 (of 8) of the Farm Riet Vlei No. 3281, Registration Division FT in favour of the applicant.

[2] The second respondent signed an “unlimited” deed of suretyship in favour of the applicant, guaranteeing the first respondent’s obligations.

[3] The applicant’s claim is based on the loan agreement plus mortgage bond and deed of suretyship, which is for the loan amount of R518 000, 00 plus the interest of R250 000, 00, and a further interest of 15% per annum. The second respondent is being held liable in solidum as surety and co-principal debtor.

[4] With regard to claim for interest of R250 000, 00 applicant claims for rectification of the loan agreement by substituting the words “loan amount interest” for “loan amount and interest”.

[5] The applicant also claims for interest in respect of R768 000, 00 at the rate of 15% per annum calculated from 17 May 2007 to date of payment. It further asks for an order to declare mortgaged property specially executable and for costs of suit on the attorney and client scale.

[6] The applicant has now applied for summary judgment. It however concedes that the claim for interest of R250 000, 00 is based on a rectified document. If the rectification claim does not succeed, this interest claim falls away. Therefore the applicant claims for R518 000, 00 which it submits is based on unrectified loan agreement.

[7] The respondents have filed an answering affidavit made by their legal representative, Mr Fredrick Aubrey Chester on their behalf, in answer to this application, in which the points in limine are taken that summary judgment on the claim is not competent under the Uniform Rules of Court.

[8] I do not intend to deal with each and every submission made in the answering affidavit. It suffices to say with respect to first point in limine that Case No. 5070/07 was withdrawn on 22 November 2007. The applicant has submitted that the claim of R518 000, 00 must be considered for summary judgment.

[9] The applicant correctly submitted that the claim for interest of R250 000,00 cannot be considered on the basis of summary judgment because rectification is not a competent prayer in a summary judgment application.1

[10] In Malcomess Scania (Pty) Ltd v Vermaak2 plaintiff sought to reform the acknowledgment of debt to reflect the true intention of the parties by deletion of the words "money actually lent and advanced" and substituting therefor the words "work done and materials supplied". After analysing the evidence Coetzee J came to the conclusion that the first claim is for rectification of the document and the second claim for money was preceded and supported by success of the first claim. The monetary claim was not supported by unrectified document. The summary judgment was dismissed.

[11] In PCL Consulting (Pty) Ltd t/a Phillips Consulting SA v Tresso Trading 119 (Pty) Ltd3 the SCA confirmed that rectification falls outside the provisions of rule 32 of the Uniform Rules of Court because it is not, in the true sense, a claim at all. In this case the plaintiff sought to substitute, in a lease agreement, words “office, 6th floor, Fedsure Towers” for “office, 4th floor, Fedsure Towers”. Plaintiff brought a claim for payment of the amount of R396 188, 35 in respect of rental and other related charges arising out of the lease agreement. The Full Court per Tsoka J in Witwatersrand unanimously affirming decision of the court of first instance said: Defendant did not deny having signed the lease. It did not deny that it occupied offices on plaintiff's premises. It furthermore did not admit or deny paying rental since the inception of the lease. What was clear however was that the defendant did sign a debit order authorisation to pay rental to the plaintiff. The debit order authorisation reflected 6th Floor as the leased premises. It was clear that the defendant was in occupation of offices on respondent’s premises. Appeal failed.

[12] In the SCA Cloete JA observed that:

“There was no dispute as to the terms of the agreement and, in particular, the identity of the premises let. The plaintiff was therefore not obliged to cross the evidential hurdle of proving that despite the provisions of the written lease which referred to the 6th floor office, it was the 4th floor office which was in truth let to the defendant. Had the defendant placed in issue what the terms of the agreement were, the plaintiff would have been obliged to prove its version of the agreement at a trial, and summary judgment would have had to have been refused. But the defendant did not do this.”4

The SCA unanimously agreed that appeal should fail.

[13] In the present case the allegedly verified cause of action is that the first respondent concluded a written loan agreement with applicant whereby it loaned R518 000, 00 from applicant and to be payable with interest over a specified period of time, failing which the full balance outstanding would then become due, owing and payable to applicant. Both respondents did not dispute the terms of the loan agreement and deed of suretyship. The applicant seeks summary judgment in respect of the capital amount only. Such amount can be dealt with without rectifying the loan agreement. Therefore the point in limine with respect to rectification must fail.

[14] I now consider the other point in limine with respect to non-compliance by applicant with rule 18 (6) of the Uniform Rules of Court. In Vorster v Herselman5 the court held where plaintiff relies on a contract, he is obliged, if possible, to state the exact date when and place where it was concluded.

[15] In Absa Bank Ltd v Coventry6, dealing with application for summary judgment for payment of R162 627, 67, its cause of action being founded on a mortgage bond allegedly registered by the defendant in favour of the plaintiff against a certain immovable property, Meskin J said that first part of the clause of the affidavit referred to two defendants and thereafter there was reference to only one defendant and it was not clear how the other defendant was indebted to the plaintiff. The court found that there was ambiguity and dismissed summary judgment.

[16] It is common cause that the respondents filed a notice to remove cause of complaint. Respondents submitted that applicant did not state in its particulars of claim where the loan agreement was concluded and further it did not state when and where deed of suretyship was concluded.7

[17] The applicant had, despite the aforementioned notice, continued to pursue an application for summary judgment. It is trite law that, where it is possible, the rules of court must be complied with. The courts loathe persistent, deliberate and flagrant disregard of court rules without good reasons or grounds. The applicant without good reason decided not to remove a cause of complaint. I find that clauses 4 and 10 of the particulars of claim, allegedly verified by an affidavit, highlight ambiguity in that they did not state place and time and place where loan agreement was concluded, respectively.

[18] Considering the remarks of Marais J expounded in Mowschenson8 that summary judgment is a stringent remedy, under the circumstances I have no jurisdiction to grant summary judgment.

The application for summary judgment is, accordingly, refused with costs.

TSHABALALA JP ____________________________________

Date of Hearing: 16 May 2008

Date of Judgment: 15 July 2008

Counsel for Applicant: Mr. R.M. van Rooyen

Instructed by: Pearce Lister & Co.

Counsel for Respondents: Mr. G.M.E. Lotz

Instructed by: Viljoen-French & Chester Inc

1 In terms of rule 32 of the Uniform Rules of Court, summary judgment may be applied for claims only: (a) on a liquid document; (b) for a liquidated amount in money;(c)for delivery of specified movable property; or (d) for ejectment, together with any claim for interest and costs. See also Malcomess Scania (Pty) Ltd v Vermaak 1984 1 SA 297 (W) 299E; Jarrosson Estates (Edms) Bpk v Oosthuizen 1985 3 SA 550 (NC). Marais J in Mowschenson & Mowschenson v Mercantile Acceptance Corporation of SA Limited 1959 (3) SA 362 (W) at 366E–F said: “The proper approach appears to me to be the one which keeps the important fact in view that the remedy for summary judgment is an extraordinary remedy, and a very stringent one, in that it permits a judgment to be given without trial. It closes the doors of the court to the defendant.”

2 See note 1 above.

3 [2007] SCA 9 (RSA), unreported case.

4 See note 3 above at para 5.

5 [1982] 4 All SA 650 (O).

6 1998 (4) SA 351 (N).

7 Clauses 4 and 10 of the particulars of claim, respectively.

8 See note 1 above.

8