Firstrand Bank Limited v Nairsons Food Grands CC and Another (82471/2016) [2017] ZAGPPHC 515 (25 August 2017)

SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in compliance with the law and SAFLII Policy

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

CASE NO: 82471/2016

25/8/17

In the matter between:

FIRSTRAND BANK LIMITED Applicant

and

NAIRSONS FOOD BRANDS CC

(Reg. No.: 2006/158421/23) First Respondent

RAMSAMY ANNAMALAY NAIR

(I.D. No.: […]) Second Respondent

JUDGMENT

Rautenbach AJ:

1. In this matter the Applicant brought an application against the First and Second Respondents the Notice of Motion claiming the following:

"Judgment to be granted against the First and Second Respondents jointly and severally the one paying the other to be absolved for.

Claim 1:

1. Payment in the amount of R1190 179.71;

2. Payment of interest on the amount of R1 190 179.71 calculated daily and compounded monthly which amount is due and payable, at the rate of prime (currently 10,5%) plus 3,5% calculated from 1 . September 2016 to date of final payment both days inclusive;

3. Costs of suit on the scale attorney and own client;

4. Further and/or alternative relief.

2. It further states:

"Judgment to be granted against the First and Second Respondents jointly and severally the one paying the other to be absolved for:

Claim 2:

1. Payment in the amount of R314 131.39;

2. Payment of interest on the amount of R314 131.39, calculated daily and compounded monthly which amount is due and payable, at the

rate of prime (currently 10,5%) plus 2% calculated from 16 September 2016 to date of final payment, both days inclusive;

3. Costs of suit on the scale of attorney and own client;

4. Further and/or alternative relief."

3. In its application the Applicant is claiming that the claim is in respect of two accounts.

4. One account was an overdraft facility and the other account was a loan agreement. It was also mentioned in the Heads of Argument that this application concerns what is commonly known as "cross default", i.e. if a party has one form of an agreement and/or facility with an entity such as the Applicant, the agreements provide that if the client defaults upon one of the facilities and/or agreements, the entity such as the Applicant is contractually and in law entitled .to call up each and every agreement and/or facility.

5. The Applicant elected to proceed by way of application which is often risky because of the fact that the Court is not considering the two versions ·by comparing the probability and then deciding the case. The test to give judgment on paper is quite different. I will elaborate on this later on in this Judgment.

6. Despite what the Claimant sets out in its Founding Affidavit in regard to the two Agreements and pointing out that the Loan Agreement

would be serviced by the overdraft facility, it is of the utmost importance to have regard to the Answering Affidavit filed on behalf of the Respondents.

7. In paragraph 12 of the Answering Affidavit the Respondents make the following averments:

"(i) The overdraft facility

12. I deny that the First Respondent is in breach of the overdraft facility, as alleged. Indeed, if regard to be had to the very tenns

pleaded by the Applicant, it is quite apparent that on the Applicant's own version:

12.1. The overdraft facility was initially limited to R1 350 000.00;

12.2. The overdraft facility would be reduced by R50 000.00 per month until it stood at R1.2 million;

12.3. The overdraft was indeed so reduced because, as at 1 September 2016, the applicable account had been allegedly overdrawn in the sum

R1 190 179.71 - well within the overdraft limit of R1.2 million;

12.4. The overdraft was called up because the First Respondent allegedly failed to punctually pay its instalments towards the Applicant and/or because it did not pay the Applicant at all."

8. Paragraphs 13 and 14 reads as follows:

"13. Not only has the deponent to the Applicant's Founding Affidavit failed to identify the contractual clauses requiring the First Respondent to pay such instalments or amounts to it in respect of the overdraft, the deponent has completely failed to identify either the requisite instalments or amounts which the First Respondent was supposedly required to pay but failed to.

14. This is not surprising because the facility in question is an overdraft which by its very nature, does not require periodic instalments or payments to be made.

9. During argument it was pointed out by the representative for the Applicant that an overdraft can be called up at any point of time due to the nature of the facility and can thus be done by a unilateral act.

10. What is important is to see what the reaction to the allegations in paragraphs 12, 13 and 14 was. This can only be done with reference to the Replying Affidavit. In the Replying Affidavit of the Applicant more particularly, no proper attempt was made to provide answers to the allegations contained in paragraphs 12, 13 and 14. Instead the Applicant in paragraph 6 thereof at page 147 of the papers started dealing with the Answering Affidavit as follows:

"Ad paragraph 25, 25.1, 25.2, 25.3, 25.4, 25.5, 25.6 and 25.7 thereof."

11. In the light of this, it is also important to analyse what specifically was set out in paragraph 25 in the Answering Affidavit filed on behalf of the Respondent’s

12. In the answer at paragraph 25 which is to be found on page 147 of the papers, the Applicant did not set out sufficient grounds or alleged specific sufficient factual allegations that what was stated in paragraph 25 of the Answering Affidavit was not true and should therefore and could therefore be merely rejected by this Court as too far-fetched. What the Respondents set out in its Answering Affidavit was that there was insufficient funds and that the Applicant, by revoking the facility, caused the problem in terms of which the facility was cancelled and never restored and had consequences of breach.

13. I have alluded to the inherent risk that an applicant runs when it merely issues an application in respect of a money claim or in respect of all motion proceedings for that matter. In this regard it is necessary to refer to National Scrap Metal (Cape Town) v. Murray and Roberts 2012 (5) SA 300 (SCA}, (paragraphs 21 and 22) in which the following was stated:

"21. These factors - particularly collectively - to cast a measure of doubt on the Appellants' version which is certainly improbable in a number of respects. However as the High Court was called on to decide the matter without the benefit of oral evidence it had to accept the facts alleged by the Appellants (as Respondents below) unless they were so far-fetched or clearly untenable that the Court is justified in rejecting them merely on the papers. An attempt to evaluate the competing versions of either side is thus both inadvisable and unnecessary as the issue is not which version is the more probable but whether that of the Appellants is so far-fetched and improbable that it can be rejected without evidence.

14. In my view and specifically in relation to the manner in which the Founding Affidavit and more particularly the Replying Affidavit in response to some of these allegations were set out in Applicant's papers, I find myself in a position where I cannot merely reject the version by the Respondents as far-fetched or clearly untenable or that this version can be rejected merely on the papers.

15. In the circumstances I also myself in the position where I cannot on the papers as it stands merely dismiss the application brought on behalf of the Applicant.

16. In the circumstances I make the following orders:

1. The matter is referred to trial.

2. The Notice of Motion and Affidavit will constitute a Simple Summons and the Respondents are granted 20 days to file a Declaration and thereafter the Rules that apply to trials will apply.

3. Costs will be costs in the cause.

J G Rautenbach

Acting Judge of the High Court Gauteng Division

Pretoria

____________________

25 August 2017