Firstrand Bank Limited v Barreiro and Another (91920/19) [2020] ZAGPPHC 410 (25 August 2020)

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

1. REPORTABLE: YES/NO

2. OF INTEREST TO OTHER JUDGES: YES/NO

3. REVISED

CASE NUMBER: 91920/19

In the matter between:

FIRSTRAND BANK LIMITED

APPLICANT

and

JOAO CARLOS DE FREITAS BARREIRO

FIRST RESPONDENT

MARIA HELENA DE JESUS BARREIRO

SECOND RESPONDENT

JUDGMENT ON APPLICATION FOR LEAVE TO APPEAL

COERTZEN, AJ:

[1] On 25 June 2020 I delivered the main judgment in this matter and granted an order against the first and second respondents (‘the respondents’). The respondents now apply for leave to appeal. The parties are referred to as they were in the main application.

[2] By agreement between the parties the application for leave to appeal is disposed of upon the written heads of argument which were submitted by counsel for the parties, without oral argument.

[3] Before dealing with the argument on leave to appeal it should perhaps be pointed out that the reference in para 6 of the main judgment to a condition of “the bond”, was in fact intended to be a reference to the condition in the facility agreement that provides for the registration of a bond over the respondents’ immovable property.

[4] In terms of s 17 (1) (a) of the Superior Courts Act 10 of 2013, leave to appeal may only be granted when the appeal would have a reasonable prospect of success; or where there is some other compelling reason why the appeal should be heard. As was recently held by the full court of this division In Democratic Alliance v President of the Republic of South Africa and Others (21424/2020) [2020] ZAGPPHC 326 (29 July 2020):

The test as now set out in s 17 constitutes a more formidable threshold over which an applicant must engage than was the case. Previously the test was whether there was a reasonable prospect that another court might come to a different conclusion. See, for example, Van Heerden v Cronwright and others 1985 (2) SA 342 (T) at 343 H. The fact that the Superior Courts Act now employs the word “would” as opposed to “might” serves to emphasise this point As the Supreme Court of Appeal said in Smith v S 2012 (1) SACR 567 (SCA) at para 7;

‘More is required to be established than that there is a mere possibility of success, that the case is arguable on appeal or that the case cannot be categorised as hopeless. There must in other words be a sound, rational basis for the conclusion that there are prospects of success on appeal.’.” [1]

- (own emphasis).

[5] The respondents’ argument on leave to appeal can be summarized as follows:

a) That I should have upheld the respondents’ reliance on iustus error;

b) That there was no “specific evidence” that the second respondent intended to bind herself as surety and that I incorrectly held that she did;[2]

c) That I should not have accepted the Bank’s certificate of balance.

[6] The highwater mark for the respondents on iustus error is again based on a contention that the respondents would not have agreed to take up the loan on behalf of the close corporation (‘the Corporation’), if they had known that the third member of the Corporation would not also sign surety or provide security. The second respondent states:[3]

“I confirm that the First Respondent and I bound ourselves as sureties in respect of the indebtedness of the principal debtor towards the Applicant. However, I will indicate later herein, one would have expected the Applicant [the Bank] to insist that all three members sign a suretyship for the debt”.

[7] On leave to appeal it is again argued that there was a “misrepresentation” by the Bank and that it had a “duty to disclose” to the respondents that the third member would not sign surety. The respondents’ argument on leave to appeal in respect of iustus error is not borne out by the facts and raises nothing new. As pointed out in the main judgment, there is no allegation on the papers of a misrepresentation on the part of the Bank. The facts do not support a finding that there was such a misrepresentation, or that there was ‘duty to disclose’ on the Bank.

[8] The argument that I incorrectly held that the second respondent bound herself as surety or intended to do so, is similarly not borne out by the facts. The second respondent admits in her affidavit that she signed surety for the debts of the Corporation. The argument on leave to appeal that there was no specific evidence before me that the second respondent intended to bind herself as surety, is fallacious. To the extent necessary I refer to the relevant part of the

suretyship, which provides:

“In favour of [the Bank] its successors or assigns

I/We the undersigned

1. Do hereby bind myself/ourselves unto and in your [the Bank’s] favour as surety/ies in solidum for and co-principal debtor/s jointly and severally with [the Corporation]… for the due payment by [the Corporation] of all or any monies which [the Corporation] may now of from time to time hereafter owe to [the Bank]…”

- (my emphasis).

The suretyship was signed by the first respondent above the words: “Signature of surety”. The suretyship was signed by second respondent above the words: “Signature of the surety OR Co-signed by me, his/her spouse” - (my emphasis).

[9] The suretyship was but one of the conditions upon which the credit facility was granted to the Corporation. Even if the suretyship was to be disregarded, it was still a condition of the Corporation’s credit facility that a bond be registered over the respondents’ immovable property, which in my view already established sufficient

underlying causa for the acknowledgment of debt which the respondents subsequently signed.

[10] The argument that I incorrectly followed the judgment of the SCA in Rossouw[4] and another v First Rand Bank Ltd t/a FNB Home Loans (formerly First Rand Bank of SA Ltd) is based on a misreading of my judgment and of the judgment of the SCA. In Rossouw the SCA dealt primarily with the question whether the bank proved at summary judgment stage, that it had properly delivered notices to the appellants in terms of s 129 of the NCA.[5] The SCA held that the bank did not.[6] The reason why the court a quo in Rossouw refused to accept the certificate of balance presented at the application for summary judgment, was because the learned judge incorrectly held that the certificate of balance constituted inadmissible evidence. On appeal the SCA held that this approach was

incorrect and that certificates of balance handed in at the hearing (even on appeal), “perform a useful function and are not hit by the provisions of rule 32(4)”.[7]

[11] It was not disputed before me that the Bank was entitled (in terms of the acknowledgment of debt) to rely on the certificate of balance. The respondents did not present any evidence to dispute the correctness of the amount claimed. The argument that I erred in not enquiring into the correctness of the claim amount without the benefit of “the full account statement put before Court”[8], is not supported by the facts and loses sight of the very purpose of the certificate of balance.

[12] In the circumstances I find no reasonable prospect that another court would come to a different conclusion. No compelling reason exists why an appeal should follow.

The following order is made:

1. The application for leave to appeal is dismissed;

2. The first and second respondents are ordered to pay the applicant’s (Firstrand Bank’s) costs, jointly and severally, the one paying the other to be absolved.

YVAN COERTZEN

ACTING JUDGE OF THE HIGH COURT

Delivered:

This judgment was handed down electronically by circulation to the parties’ legal representatives by email and by uploading the judgment to the digital CaseLines system which is utilised in this division. The date and time for hand-down is deemed to be at 10h00 on 25 August 2020.

Appearances:

Counsel for first and second respondents: Adv L Keijser

Instructed by:

EW Serfontein & Associates Inc.

Counsel for the respondent:

Adv NG Louw

Instructed by:

RWL Inc.

[1] At para 4.

[2] Respondents’ heads of argument on leave to appeal, para 3.1.2.

[3] Answering affidavit, para 3.3

[4] [2011] 2 All SA 56 (SCA).

[5] National Credit Act 34 of 2005.

[6] Rossouw, para 37.

[7] Rossouw, para 47.

[8] Respondents’ heads of argument on leave to appeal, para 4.