Firstrand Bank Ltd t/a Wesbank v A and E Registrations (Pty) and Another (20559/2017) [2018] ZAGPJHC 18 (8 February 2018)

REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG LOCAL DIVISION, JOHANNESBURG

CASE: 20559/2017

In the matter between:

FIRSTRAND BANK LTD t/a WESBANK PLAINTIFF

AND

A AND E REGISTRATIONS (PTY) LTD FIRST DEFENDANT

(REG NO: 2014/164833/07

MARITZ: ELAINE MELINDA SECOND DEFENDANT

JUDGMENT

TWALA J

[1] Before this Court, is an application for summary judgment wherein the plaintiff seeks the following order against the defendants, jointly and severally, based on an instalment sale agreement:

I. Cancellation of the agreement

II. Directing the first and/or second defendants to forthwith return to the plaintiff the vehicle described as a 2011 Yamaha YZF R1 with chassis number JYARN23E10A000992 and engine number N519E020164;

III. Failing the above that the Sheriff of the above Honourable Court or his lawful deputy be authorised, directed and empowered to attach and seize the vehicle wherever he may find same and to hand the vehicle to the plaintiff;

IV. That judgment for the amount of damages that the plaintiff may have suffered, together with the interest thereon be postpone sine die, pending the return of the vehicle to the plaintiff, the subsequent valuation and sale thereof as well as the calculation of the amount which the plaintiff would then be entitled to;

V. Interest thereon calculated at the rate of 16% per annum from the 10th day of May 2017 to date of payment;

VI. Costs of suit.

[2] It is common cause that the on the 24th of November 2015 the plaintiff and the first defendant concluded an instalment sale agreement for a vehicle described therein as a 2011 Yamaha YZR RL. It is not in dispute that the plaintiff performed in terms of the agreement by delivering the vehicle to the first defendant. It is further not in dispute that on the 24th of November 2015 the second defendant signed a deed of suretyship in terms of which she bound herself jointly and severally as surety and co-principal debtor for he punctual payment of all sums due or to become due to the plaintiff by the first defendant. The second defendant signed a deed of suretyship limited to the amount of R161 063.43.

[3] At the commencement of the hearing of this case, the plaintiff indicated that it is pursuing prayers 1; 2; 3 and 6 against the defendants and prayers 4 and 5 to be postponed sine die.

[4] It is contended by counsel for the defendants that there is no valid agreement between the plaintiff and the first defendant since the plaintiff did not sign the agreement. Further, the deponent to the affidavit in support of summary judgment did not state why he swore positively to the cause of action of the plaintiff but failed to disclose that the second defendant signed a limited surety.

[5] Counsel for the defendants further contended that the NCA is applicable in the agreement between the parties. It is not a large credit agreement as claimed by the plaintiff. The plaintiff, so it is contended, has failed to comply with section 129 of the NCA. The plaintiff filed a reply to the Rule 35 (12) notice to the effect that the information requested is not relevant for the present proceedings.

[6] Counsel for the plaintiff contended that, the defendants have failed to show a bona fide defence in the affidavit resisting summary judgment. Since the defendants are disputing that the asset value or turnover of the

first defendant does not exceed R1m, so goes the argument, it was incumbent upon the defendants to show that the asset value and or turnover of the first defendant does not exceed R1m. The first defendant signed the instalment sale agreement and agreed that the agreement is not subject to the National Credit Act. It is further contended that the parties have performed in terms of the agreement and therefore the issue of the plaintiff not having signed the agreement is immaterial.

[7] There is no merit in the defendants’ argument that there is no valid agreement between the parties since the plaintiff did not sign the agreement. The authorities are clear on this point especially where the parties performed in terms of the agreement and where there is no statutory provision that provides for the agreement to be signed by both the parties. It is absurd that the defendants would at this stage attempt to take advantage that the plaintiff did not sign the agreement. In this regard, see the case of Pillay and Another v Shaik and Others 2009 (4) SA 74).

[8] The heading of the agreement signed by the parties reads thus:- PRE AGREEMENT STATEMENT FOR A INSTALMENT SALE AGREEMENT OUTSIDE THE NCA and Clause 22 of the terms and conditions for instalment sale agreement provides as follows:

“22. Acknowledgement

22.1 You agree that all the information that you have provided to the Seller before entering the Agreement, is true and correct and that, based on this information, you are not subject to the National Credit Act No. 34 of 2005.

22.2 You will notify us in writing of any changes to your legal or statutory standing, including any changes to your Vat registration status or any change in the use of the goods which results in a Vat input tax deduction being claimable in terms of section 18(4) of the Vat Act.”

[9] I am unable to disagree with counsel for the plaintiff in that the defendants should have taken the Court into its confidence since they allege that this matter falls within the prescripts of the National Credit Act by merely attaching its balance sheet or any document to that effect to its affidavit resisting summary judgment. Further, it is not in dispute that the first defendant signed the instalment sale agreement acknowledging that the NCA does not apply to it. Clause 22 of the terms and conditions of the sale agreement provide that the first defendant agrees that it is not subject to the NCA and that it should inform the plaintiff if its status changes during the course of the agreement. There is nothing before this Court that suggests that the status of the first defendant changed during the course of the agreement.

[10] It is my respectful view therefore, that the parties agreed to transact outside the prescripts of the NCA. It is absurd for the defendants to now attempt to rely on the provisions of the NCA when it was expressly agreed that it does not apply in this case. I therefore hold the view that the NCA does not apply in this case and the plaintiff was therefore not obliged to comply with section 129 thereof.

[11] There is a plethora of authority that the surety bound itself as co-principal debtor but that does not elevate it to the status of the debtor. There is not agreement of credit between the surety and the plaintiff. A surety who has bound himself as surety and co-principal debtor remains a surety whose liability arises wholly from the contract of suretyship. Signing as surety and co-principal

debtor does not render a surety liable in any capacity other than a surety who has renounced the benefits of excussion and division. (In this regard see the case of First Rand Bank v Carl Beck Estates (Pty) Ltd [2016] JOL 35243 (T).

[12] In the cased of Neon and Cold Cathode Illuminations (Pty) Ltd v Ephron 1978 (1) SA 463 (A) at 471, the Appellate Division stated the following:

“credit was, in fact, not granted to the second respondent. the loan finance granted and the mortgage bond agreement is and was between the applicant and the first respondent. The second respondent was not advanced credit and did not become party to the contract between the applicant and first respondent. He did not contract with applicant to acquire credit himself or be a party to the agreement between applicant and the first respondent.

[13] I therefore find myself in disagreement with the second defendant that as a private individual she was entitled to the notice in terms of section 129 of the NCA. I hold the view that the NCA is not applicable to the second defendant for her liability arises from a suretyship agreement

and not a credit agreement.

[14] In the case of First Rand Bank V Carl Beck Estates (Pty) Ltd [2016] JOL 35243(T) as quoted above the court further stated that:

“To refuse to grant summary judgment in respect of the balance owing merely because the application failed to reduce the amount claimed in the summons would be, to my mind, to ignore the import of the provisions of sub rule (6). In a number of authorities, our courts have recognized that a plaintiff may be granted less than claimed in the papers because this deviation from that which is claimed in the papers neither adversely affects the defendant’s rights nor is it detrimental to him”

[15] In the present case, the defence raised by the second defendant is that the suretyship she entered into was limited to a specific amount, R161 063. 43 whereas the purported certificate of balance alleges that both defendants are indebted to the plaintiff in the amount of R165 395.57. It is my respectful view that nothing prevents the Court from awarding a lesser amount than the amount claimed against the surety limited to the amount of the suretyship signed. I am of the view therefore that the second defendant’s contention in this regard has no merit and falls to be dismissed.

[16] It is trite that for a defendant to successfully resist an application for summary judgment, it must satisfy the Court that it has a bona fide defence by disclosing fully the nature of the grounds of the defence and the material facts relied upon for such defence.

[17] In the case of Joob Joob Investments (Pty) Ltd v Stocks Mavundla Zek Joint Venture 2009 (5) SA 1 (SCA), the Court stated the following:

“The rationale for summary judgment proceedings is impeccable. The procedure is not intended to deprive a defendant with a triable issue or a sustainable defence of her/his day in court. After almost a century of successful application in our courts, summary judgment proceedings can hardly continue to be described as extraordinary. Our courts, both of first instance and at appellate level, have during that time rightly been trusted to ensure that a defendant with a triable issue is not shut out. In the Maharaj case at 425 G-426E, Corbett JA, was keen to ensure first, an examination of whether here has been sufficient disclosure by the defendant of the nature and grounds of his defence and the facts upon which it is founded. The second consideration is that the defence so disclosed must be both bona fide and good in law. A court which is satisfied that this threshold has been crossed is then bound to refuse summary judgment. Corbett JA also warned against requiring of the defendant the precision apposite to pleadings. However, the learned judge was equally astute to ensure that recalcitrant debtors pay what is due to a creditor.”

[18] In the present case, the defendants have filed an affidavit resisting summary judgment which affidavit contained only the technical defences enunciated above. In my view, it is not that the defendants did not understand the plaintiff’s claim against them, but deliberately avoided to set out the nature and grounds of its defence and the facts upon which it is based with sufficient clarity to satisfy the Court that first defendant has a bona fide defence which is good in law.

[19] I am accordingly satisfied that the first defendant has no bona fide defence to the claim of the plaintiff and that the appearance to defend has been entered solely for the purposes of delaying the

plaintiff from getting the relief sought.

[20] In the circumstances, I therefore make the following order:

I. The agreement between the parties is hereby cancelled;

II. The first and/ or second defendants are ordered to forthwith return to the plaintiff the vehicle described as 2011 YAMAHA YZR R1 with chassis number JYZRN23E19A000992 and engine number N519E020164;

III. Should the defendants fail to return the vehicle as ordered in II above, the

Sheriff of the above Honourable Court or his lawful Deputy is authorised, directed and empowered to attach, seize the vehicle wherever he may find same and to hand the vehicle to the plaintiff;

IV. The judgment for the amount of damages that the plaintiff may have suffered, together with the interest thereon is postponed sine die, pending the return of the vehicle to the plaintiff, the subsequent valuation and sale thereof as well as the calculation of the amount which the plaintiff would then be entitled to;

V. Interest thereon calculated at the rate of 16% per annum from the 10th May 2017 to date of payment;

VI. The defendants to pay the costs of suit.

_______________

JUDGE OF THE HIGH COURT OF SOUTH AFRICA

GAUTENG LOCAL DIVISION

Date of hearing: 1 February 2018

Date of Judgment: 8 February 2018

For the Appellant: Advocate: AJ Reyneke

Instructed by: Smith Van Der Watt INC

Tel: 011 668 5400

For the Respondent: Advocate: CR Du Plessis

Instructed by: Le Roux Mathews & Du Plessis

011 869 0885