Nedbank Limited v Labuschagne and Another (1393/2020) [2020] ZAFSHC 210 (12 November 2020)

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

FREE

STATE PROVINCIAL DIVISION

Case No.: 1393/2020

In the matter between:

NEDBANK LIMITED[1]

PLAINTIFF

(Registration number: 1951/000009/06)

versus

IZAK

JACOBUS LABUSCHAGNE[2]

FIRST

DEFENDANT

(Identity number: […])

ANTON HERBERT TAUTE N. O. [3]

SECOND

DEFENDANT

(In his capacity as duly appointed curator

bonis for, and on behalf of, George Petrus Enslin[4]

with Identity number: […])

Coram: Opperman, J

Date of hearing: 5 November 2020

Delivered: The judgment was handed down electronically by circulation to the parties’ legal representatives by email and release to SAFLII

on 12 November 2020. The date and time for hand-down is deemed to be 12 November 2020 at 15h00.

Summary: Application for summary judgment in terms of Rule 32 as amended on 1 July 2019[5]

ORDER

Having considered the documents filed on record and having heard Counsel for the Plaintiff and the Defendant;

IT IS ORDERED THAT:

Summary judgment in terms of Rule 32 is granted against the First and Second Defendants and for the following:

CLAIM 1

1. Payment of the amount of R7 698 413.45;

2. Payment of interest on the aforesaid amount at the rate of 11,50% per annum, compounded daily and capitalized monthly from 21 February 2020 to date of final payment;

3. Costs of suit on attorney and client scale.

CLAIM 2

1. Payment of the amount of R 2 840 089.07;

CLAIM 3

1. That the agreement be rectified by the substitution of the words “Zarra Boerdery (Pty) Ltd” with the words “Zara Boerdery (Pty) Ltd;

2. Payment of the amount of R 3153 239.85;

3. Payment of interest on the aforesaid amount at the rate of 20,25% per annum, compounded daily and capitalized monthly from 21 February 2020 to date of final payment; both days inclusive;

4. Costs of suit on attorney and client scale.

JUDGMENT

[1] The Banks’s claim for summary judgment against Labuschagne and Taute N.O. is based on suretyship agreements in terms whereof they bound themselves as sureties for and on behalf of Zara Boerdery (Pty) Ltd.[6] The indebtedness is now undisputed.

[2] Labuschagne and Enslin were the directors of the company: Zara Boerdery that conducted farming activities in the Reddersburg/

Edenburg districts in the Free State. Some time ago Enslin suffered a stroke and is currently unable to manage his financial affairs. As a result, Taute was appointed by the Court as his curator bonis. It appears from all evidence that the farming operations came to a standstill. The company, for reasons not revealed to the court,

suffered cash flow problems in its farming enterprise and could not settle its indebtedness to the Bank.

[3] Labushagne and Taute oppose the application for summary judgment on two grounds. Firstly; that the Bank already has security in excess of the claim amount in the form of mortgage bonds registered over the various properties. In addition, the bank also holds a cession of a life policy by Labuschagne, cession of a PPS insurance policy by Enslin and life policies with a minimum cover of R11 000 000.00 over both their lives. In the alternative they rely on the overriding and unfettered discretion of the Court to refuse the summary judgment. Their argument is that the bank, as bondholder over the various properties, will be paid from the proceeds of the sale of some of the properties.

[4] In their Heads of Argument at paragraph 7.3 Counsel for Labushagne and Taute N.O. alleges that: “The securities are in the process of being realised, in which event the respondents’ indebtedness to the Bank, as sureties of the company, will be expunged.” It is uncertain on the papers when the indebtedness will be so expunged.

[5] Argument for the Bank is based on an assertion that a bona fide defence has not been shown to exist to the Banks’s claim. The Defendants through their agents secured contracts for the sale of certain immoveable properties but it has not come to fruition as at the time of the hearing. The sales have not been realised and the rescue of the indebtedness is mere speculation.

[6] Imperative to note is that this court made an order for final liquidation against Zara Boerdery on 10 November 2020 and the whole defence against the summary judgment, consequently, fell apart. The dictum in Joob Joob Investments (Pty) Ltd v Stocks Mavundla Zek Joint Venture 2009 (5) SA 1 (SCA) applies:

“[30] In John Wallingford v The Directors of The Mutual Society (1880) 5 AC 685 (HL) at 699 - 700, Lord Hatherley referred to the objects of the new English procedure as follows:

‘I apprehend that from the first the objects of these short methods of procedure has been to prevent unreasonable delay, a delay which was very prejudicial to the creditors, and never, I am afraid, or rather, I am pleased to say, can have been very beneficial to the debtor himself. Simply allowing legal proceedings to take place, in order that delay may be applied to the administration of justice as much as possible, is not an end for which we can conceive the Legislature to have framed the provisions which now exist under the several Judicature Acts. If a man really has no defence, it is better for him as well as his creditors, and for all the parties concerned, that the matter should be brought to an issue as speedily as possible; and therefore there was a power given in cases in which plaintiffs might think they were entitled to use the power by which, if it was a matter of account, an account might be immediately obtained upon the filing of a bill, or, if it was a matter in which the debt was clear and distinct, and in which nothing was needed to be said or done to satisfy a Judge that there was no real defence to the action, recourse might be had to an immediate judgment and to an immediate execution.'

[31] So too in South Africa, the summary judgment procedure was not intended to 'shut (a defendant) out from defending', unless it was very clear indeed that he had no case in the action. It was intended to prevent sham defences from defeating the rights of parties by delay, and at the same time causing great loss to plaintiffs who were endeavouring to enforce their rights.

[32] 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 425G - 426E, Corbett JA was keen to ensure, first, an examination of whether there has been sufficient disclosure by a 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 a 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.

[33] Having regard to its purpose and its proper application, summary judgment proceedings only hold terrors and are 'drastic' for a defendant who has no defence. Perhaps the time has come to discard these labels and to concentrate rather on the proper application of the rule, as set out with customary clarity and elegance by Corbett JA in the Maharaj case at 425G - 426E.”

[7] In conclusion; the plea does not raise any issue for trial. The defence relied upon by the defendants morphed from no longer denying their indebtedness to a reliance on an agreement of sale of certain immovable property to honour the debt and an indulgence by the court to delay the matter to fulfil the said initiative. This is too vague to be acknowledged as a dispute that must go on trial on the basis of a bona fide defence that is good in law.

[8] In light of the above, summary judgment in terms of Rule 32 is granted against the First and Second Defendants and for the following:

1. Payment of the amount of R7 698 413.45;

2. Payment of interest on the aforesaid amount at the rate of 11,50% per annum, compounded daily and capitalized monthly from 21 February 2020 to date of final payment;

3. Costs of suit on attorney and client scale.

1. Payment of the amount of R 2 840 089.07;

1. That the agreement be rectified by the substitution of the words “Zarra Boerdery (Pty) Ltd” with the words “Zara Boerdery (Pty) Ltd;

2. Payment of the amount of R 3153 239.85;

3. Payment of interest on the aforesaid amount at the rate of 20,25% per annum, compounded daily and capitalized monthly from 21 February 2020 to date of final payment; both days inclusive;

4. Costs of suit on attorney and client scale.

_____

M OPPERMAN, J

APPEARANCES

Counsel for the Plaintiff

Advocate J Els

Chambers, Bloemfontein

EG Cooper & Majiedt Inc.

Bloemfontein

Email: chane@egc.co.za

Ref: RO/CD/NO 1655

Counsel for the Defendants

Advocate J Zietsman

Blair Attorneys

[1] “The Bank”.

[2] “Labuschagne”.

[3] “Taute N.O.”.

[4] “Enslin”.

[5] GN R842 published in GG 42497 of 31 May 2019.

[6] “Zara Boerdery”.