Firstrand Bank Ltd T/A Criterion Finance, A Division of Wesbank v Driescher (2008/32119) [2014] ZAGPJHC 265 (17 October 2014)

REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

(GAUTENG LOCAL DIVISION, JOHANNESBURG)

CASE NO: 2008/32119

DATE: 17 OCTOBER 2014

In the matter between

FIRSTRAND BANK LTD T/A CRITERION

FINANCE, A DIVISION OF WESBANK.............................................APPLICANT

And

ALBERTUS JOHANNES CHRISTIAN

DRIESCHER..................................................................................RESPONDENT

Practice – procedure - interlocutory application for uplifting of bar imposed in terms of rule 26 to file replication - requirements of reasonable explanation for delay and that aspects raised in replication not unfounded discussed and considered.

Jurisdiction of court - special plea denying court has jurisdiction - choice of domicilium address within area of jurisdiction of court - whether sufficient to bestow jurisdiction on court.

Suretyship - deed of suretyship - interpretation of - principles applicable - whether surety bound himself in personal capacity as surety where he signed deed in a representative capacity - no indication of the former - defendant not bound.

Estoppel – replication - alleged that defendant in choosing domicilium citandi et executandi address within jurisdiction of court estopped from denying jurisdiction of court - in absence of indication in deed of suretyship that address chosen was the residential address of defendant replication unsustainable – application dismissed with costs.

J U D G M E N T

VAN OOSTEN J:

[1] This is an interlocutory application for the uplifting of an automatic bar to file a replication in a pending action. For the sake of ease of reference and to avoid confusion, I will refer to the parties as in the action.

[2] The plaintiff sues the defendant as surety and co-principal debtor for a company known as Triangle Warehouse Services (Pty) Ltd (the principal debtor) in respect of its indebtedness to the applicant in the sum of R471 958.03, arising from a master rental agreement concluded between the parties in respect of certain heavy industrial machinery. The summons was issued on 22 September 2008 and served at the defendant’s alleged chosen domicilium citandi et executandi in terms of the deed of suretyship. The defendant was in default of an appearance to defend and judgment by default was sought and obtained on 26 January 2009 which was subsequently, on 9 December 2009, on application by the defendant rescinded and the matter proceeded on an opposed basis. The defendant subsequently joined 6 third parties to the action but they have no interest in the present application.

[3] The long and chequered pre-trial history of this matter reveals a large number of applications contributing to an impressive pre-trial bundle extending into hundreds of pages. It is necessary to briefly refer to those applications: the defendant, having filed a notice of intention to defend, noted an exception against the plaintiff’s particulars of claim, which was upheld by Mokgoathleng J on 4 May 2010. The plaintiff was afforded time to amend which it availed itself of more than 2 years later, on 17 October 2012, when an application for the amendment in terms of rule 28 was filed. The defendant in response thereto launched an application in terms of rule 30(1) and (2)(c) for the setting aside of the plaintiff’s notice of amendment and amended pages filed pursuant thereto. On 6 March 2013 Foulkes-Jones AJ ordered the defendant to file his plea to the plaintiff’s amended particulars of claim within 20 days and further directed that the costs of the defendant’s rule 30 application be costs in the cause.

[4] On 8 April 2013 the defendant delivered a plea to the plaintiff’s amended particulars of claim. In the plea by way of a special plea, the jurisdiction of this court to adjudicate the action is denied on the grounds I shall revert to. On 14 February 2014, and thus almost 10 months later, the plaintiff filed a replication to the defendant’s special plea. On 6 March 2014 the defendant filed an application in terms of rule 30(2)(b) notice on the grounds that the replication was filed while the plaintiff was under an automatic bar to do so and no condonation had been sought. That application was subsequently removed from the roll. On 27 March 2014 the plaintiff once again delivered a replication in identical terms to the first one. On 3 June 2014 the plaintiff launched the present application in which it seeks in regard to the replication filed on 14 February 2014, an order for the removal of the ipso facto bar imposed pursuant to rule 26 and that the replication is to remain on record as the plaintiff’s replication. This is the application before me.

[5] It is trite that in order to succeed the plaintiff is required to advance a reasonable explanation for the delay and show that the application is made bona fide, that there has not been a reckless or intentional disregard of the rules of court, that the aspects raised in the replication are not unfounded and that the defendant will not suffer prejudice which cannot be cured by an appropriate order as to costs (Smith NO v Brummer NO and another 1954 (3) SA 352 (O) 258). The defendant opposes the application on the grounds firstly, that there has been a reckless disregard of the rules of court, secondly, that the replication is ill-conceived in law and, thirdly, that the prejudice caused to the defendant cannot be compensated by an award of costs. In the view I take of the matter it is only necessary to decide the defendant’s first and second grounds of opposition. In addition I finally propose to deal with the contents of the deed of suretyship relied upon by the plaintiff in the action and in particular the question whether the defendant in signing it, had bound himself personally as surety and co-principal debtor. This aspect was not addressed in argument at the hearing of the application. During my preparation of the judgment this aspect came to the fore and I requested counsel to file supplementary heads of argument in which this issue is addressed. Those heads of argument were duly filed for which I am grateful to counsel.

[6] The inordinate delays from the date of issue of summons until the replication was filed are evident from the summary of the pre-trial applications set out above. The time span of six years in itself, calls for an explanation. Counsel for the defendant has convincingly argued that the delays were not only inordinate but also in some respects, inexcusable. The explanation for the delay in filing the replication is dealt with by the plaintiff’s attorney. She correctly states that the dies for filing a replication to the defendant’s special plea expired on 26 April 2013. She further states that she duly instructed counsel to settle a replication which in draft was received on 7 April 2013 and signed by her 3 days later. The original document, she maintains, was lost and she was under the impression that it had been filed with the registrar. The internal procedures followed at the firm convinced her that service of the replication had been effected. It was only almost 10 months later that she discovered, to her horror she states, that it in fact had not been delivered. The explanation is seemingly unsatisfactory: for one it is inconceivable that a document that was handled by four persons in one firm of attorneys, could have been lost. One must assume that the service of the document was simply never checked as should have happened. Be that as it may, and although exhibiting an absence of diligence expected of attorneys in dealing with such a matter, I am not persuaded that a reckless disregard of the rules has been shown. I would accordingly prefer to approach this matter on the basis of the sustainability of the points raised in the replication which in my view is decisive of this matter.

[7] The defendant’s special plea of lack of jurisdiction is based on the contentions firstly, that the main lease agreement and deed of suretyship were concluded outside the jurisdiction of this court (which is common cause) and, secondly, that the defendant was not ordinary resident within the area of jurisdiction of this court but that he resided in KwaZulu-Natal. To this is added:

‘(c) insofar as the plaintiff relies on the defendant’s chosen domicilium to confer the jurisdiction of the above honourable court upon him, the defendant denies having submitted himself to the jurisdiction of the above honourable court.’

In the plaintiff’s replication issue estoppel is pleaded in regard to the defendant’s residence outside the jurisdiction of this court. Having set out the background to the defendant’s liability as surety, the following is pleaded:

‘2.2.4 The defendant, as surety and co-principal debtor, remains liable towards the plaintiff for payment of the claimed amount by virtue of a deed of suretyship entered into by the defendant on 15 September 2004 within the area of jurisdiction of the above Honourable Court;

2.2.5 at the stage of entering into the deed of suretyship the defendant represented to the plaintiff that he was a resident at McMaculom Boulevard, Rico Industrial, Vanderbijlpark and similarly, chose as his domicilium citandi et executandi the said address;

2.2.6 the plaintiff relied upon the representation made by the defendant and acted thereupon to its detriment in that, it caused process to be served upon the defendant at his chosen domicilium citandi et executandi.

2.3 the plaintiff instituted action against the defendant primarily on the basis of the deed of suretyship entered into by the defendant on behalf of the principal debtor.

2.4 at all times material hereto the plaintiff was entitled to institute action against the defendant and to serve all process at the address chosen by the defendant as his domicilium citandi et executandi.

2.5 In the premises:

2.5.1 the defendant is estopped from denying that the above Honourable Court has jurisdiction to entertain the plaintiff’s claim;

2.5.2 the defendant is estopped from denying that he submitted to the jurisdiction of the above Honourable Court by representing to the plaintiff that he resides within the area of the jurisdiction of the above Honourable Court, particularly in that the address chosen by the defendant constituted his residential address and, no agent was appointed by the defendant to accept service on his behalf;

2.5.3 the defendant at no stage amended his chosen domicilium citandi et executandi and failed to notify the plaintiff that he is resident at an address other than the aforesaid address.

2.5.4 any judgment granted against the defendant will be effective as against the defendant.’

In argument counsel for the plaintiff wisely did not pursue the contention that the defendant is estopped from denying the jurisdiction of this court (para 2.5.1). Counsel, however, persisted in the contention that the defendant in choosing the domicilium address as constituting his residential address, submitted to the jurisdiction of this court.

[8] It is at the outset necessary to determine the factual correctness of the alleged representation which underpins and lies at the heart of the plea of estoppel. On the pleaded facts the representation could only have been made in the deed of suretyship on which the plaintiff’s claim is based. A careful reading and analysis of the deed of suretyship, to which I shall revert, reveals that the address chosen as the domicilium address in fact is not the residential address of the defendant. In fact the words residential address nowhere appear in the deed of suretyship. Ex facie the deed the defendant signed it ‘for and on behalf of Triangle Services (Propriety) Limited Gauteng Registration number 1996/070055/07’ and ‘in his capacity as director pursuant to a resolution dated 15 September 2004 a certified copy whereof is hereto attached’ (no copy is attached). Below this, under the sub-heading “Address”, the address referred to in the replication appears. In my view, the address cannot, on any basis, be interpreted as being the residential address of the defendant. It is clearly the address of the company in respect of which the deed was signed. That being so, the factual basis for the plaintiff’s replication is non-existent which in itself determines the fate of the application.

[9] The plaintiff’s replication can for another reason not be sustained. The question of whether the choice of a domicilium address can constitute submission to jurisdiction was left open by me in Geyser v Nedbank Ltd and others 2006 (5) SA 355 (W) 360G. Even a finding that it can does not assist the plaintiff in the present matter: assuming the defendant did choose the address as his domicilium address could not, in the absence of any indication that it was his residential address, constitute a submission to jurisdiction. Furthermore, clause 20.2 of the deed of suretyship deals with submission to the jurisdiction of the high court. In terms thereof the surety ‘consents and submits’ to the jurisdiction of the ‘appropriate division

or divisions’ of the high court. Had it been the intention to submit to the jurisdiction of specifically this court, one would have expected to find words to that effect in the deed, of which there are none. I am moreover, unable to find anything in the deed of suretyship that is consistent only with acquiescence and therefore submission to the jurisdiction of this court (see Du Preez v Philip-King 1963 (1) SA 801 (W) 803B).

[10] Finally, I turn to the question whether the deed of suretyship, in any event, binds the defendant in his personal capacity. I have already alluded to the representative capacity in which the defendant signed the deed of suretyship. Provision is made on the signature page of the deed for the particulars of individual/s as sureties, which significantly, has not been completed and left blank. It is obvious that had it been the intention of the defendant to bind himself as surety in his personal capacity his particulars would have been inserted in this section. Below this section one finds the heading Incorporated and Unincorporated Associations (inclusive of companies, close corporations and partnerships), obviously providing for those entities as sureties, which is the section completed by the defendant in his representative capacity. In the absence of any indication to that effect it is unmistakably clear that the defendant did not bind himself as surety in his personal capacity (cf Brink v Humphries &

Jewell (Pty) Ltd 2005 (2) SA 419 para [10]). No arguments to the contrary have been advanced and it follows that the application must on this further ground fail. The finding also bears on the merits of the action but, as I am required only to determine the application before me, no further comment is necessary.

[11] It remains to deal with the costs of this application. Counsel for the defendant persisted in asking for costs on the punitive scale. I am not satisfied, in the exercise of my discretion, that a punitive costs order is justified in the circumstances of this case.

[12] In the result the application is dismissed with costs, including the costs relating to the defendant’s supplementary heads of argument.

FHD VAN OOSTEN

JUDGE OF THE HIGH COURT

COUNSEL FOR APPLICANT ADV WG PRETORIUS

APPLICANT’S ATTORNEYS ROSSOUWS LESLIE INC

COUNSEL FOR RESPONDENT ADV AM MACMANUS

RESPONDENT’S ATTORNEYS DE NYSSCHEN ATTORNEYS

DATE OF HEARING 9 OCTOBER 2014

DATE OF JUDGMENT 17 OCTOBER 2014