Mega Works Trading Enterprise 200 (Pty) Ltd and Another v Firstrand Bank Limited (CIV APP FB 23/22) [2023] ZANWHC 58 (23 May 2023)

Mega Works Trading Enterprise 200 (Pty) Ltd and Another v Firstrand Bank Limited (CIV APP FB 23/22) [2023] ZANWHC 58 (23 May 2023)

The appeal was upheld because Firstrand Bank Limited failed to make out its case in the founding affidavit, relying on clause 5.4 of the overdraft facility agreement without providing evidence of breach. The respondent's attempt to rely on clause 8.1 in the replying affidavit was impermissible, as the appellants were entitled to answer only the case presented in the founding affidavit. The court held that a financial institution must clearly set out the breach entitling it to cancel an agreement and call up the facility. The respondent did not act in a bona fide manner by shifting its reliance to clause 8.1 without proper foundation. The application was dismissed with costs.

Citation
[2023] ZANWHC 58
Parties
Appellant: Mega Works Trading Enterprise 200 (Pty) Ltd; Appellant: Molefi Setlaleleng; Respondent: Firstrand Bank Limited
Court
North West High Court, Mafikeng
Jurisdiction
South Africa
Judgment Date
23 May 2023
Case Number
CIV APP FB 23/22
Procedural Posture
Civil Appeal / Appeal From Judgment and Order of the Court a Quo
Outcome
Appeal upheld; order of the court a quo set aside and replaced with dismissal of the application with costs.
Judges
Hendricks, Petersen, Reddy
Legal Topics
Overdraft Facility Agreement, Pleadings in Motion Proceedings, Suretyship, Contractual Termination, Validity of Demand, Party and Party Costs
Banking and Finance Civil Procedure Commercial and Corporate Overdraft Facility Agreement Pleadings in Motion Proceedings Suretyship Contractual Termination Validity of Demand +1 more

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Parties

Mega Works Trading Enterprise 200 (Pty) Ltd

Appellant

Molefi Setlaleleng

Appellant

Firstrand Bank Limited

Respondent

Procedural Posture

Civil Appeal / Appeal From Judgment and Order of the Court a Quo

Legal Issues

  1. 1 Whether Firstrand Bank Limited was entitled to call up the overdraft facility and demand payment under clause 8.1 of the agreement.
  2. 2 Whether the respondent could rely on clause 8.1 in the replying affidavit when the founding affidavit relied on clause 5.4.
  3. 3 Whether the appellants provided a valid defence to the demand for payment under the overdraft facility.

Ratio Decidendi

The appeal was upheld because Firstrand Bank Limited failed to make out its case in the founding affidavit, relying on clause 5.4 of the overdraft facility agreement without providing evidence of breach. The respondent's attempt to rely on clause 8.1 in the replying affidavit was impermissible, as the appellants were entitled to answer only the case presented in the founding affidavit. The court held that a financial institution must clearly set out the breach entitling it to cancel an agreement and call up the facility. The respondent did not act in a bona fide manner by shifting its reliance to clause 8.1 without proper foundation. The application was dismissed with costs.

Court Disposition

Appeal upheld; order of the court a quo set aside and replaced with dismissal of the application with costs.

Orders

  • The appeal is upheld with costs.
  • The order of the court a quo is set aside and replaced with the following order: The application is dismissed with costs.