Real People (Pty) Ltd v LVK Trading (Pty) Ltd t/a Chesanyama Boksburg and Another (39782/2017) [2017] ZAGPPHC 635 (22 September 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: 39782/2017

In the matter between:

REAL PEOPLE (PTY) LTD Plaintiff

Registration Number: 2001/004440/07

and

LVK TRADING (PTY) LTD T/A CHESANYAMA First

Defendant

BOKSBURG

Registration Number: 2015/065033/07

LUTCHMEE KISTEN Second

Defendant

Identity Number: [7...]

JUDGMENT

HR FOURIE AJ:

1. The plaintiff claims summary judgment in the amount of R 512 054.86 against both defendants. The cause of action as against the first defendant is monies lent and advanced in terms of a written loan agreement, and in respect of the second defendant, the claim is based on a so-called credit guarantee.

2. In limine the defendants contended that the application cannot succeed because it was brought sixteen days from date of delivery of the defendants' notice of intention to defend.

3. The notice of intention to defend appears to have been served on one Sinah on 6/7/2017 at 11:29. It also bears the name “Cathy” who apparently accepted service on 7/7/2017 at 15:20. It bears the Registrar's stamp reflecting filing thereof on 7 July 2017. The

application for summary judgment was delivered on 28 July 2017, being sixteen days from 6 July and 15 days from 7 July 2017.

4. Rule 32(2) provides that the plaintiff shall within fifteen days after the date of delivery of the notice of intention to defend,

deliver its notice of application for summary judgment. Rule 1 of the Uniform Rules of Court defines " deliver'' to mean "serve copies on all parties and file the original with the Registrar''.

5. Mr Muller, for the defendants, submitted that the period of 15 days should commence running on the date upon which the notice of intention to defend is served, i.e. 6 July 2017. The attorney of record for the plaintiff does not know when the notice of intention to defend was filed at Court. He could not give any authority for his submission.

6. Apart from the fact that the two signatures and dates appearing on the notice of intention to defend, suggest that the plaintiff's

attorney of record was well aware that the notice was only filed on 7 July 2017, I am bound to give effect to the plain words and meaning of Rule 32(2). The plaintiff is afforded fifteen days from delivery of the notice, not from receipt of the notice, within which to bring its application. This division has confirmed that the meaning of "delivery'' in the context of Rule 32(3) means "service and filing". Kismet Cycle Works (Pty) Ltd v Abrahamson Ltd, 1961 (3) SA 33 (T) at 340. I do not think that there is any scope for interpreting "delivery'' in the context of Rule 32(2), any differently.

7. The point in limine is accordingly dismissed.

8. The defendants' defence is the following: the second defendant says that she purchased a Chesanyama franchise during 2015, for which purpose she obtained a small business loan from the plaintiff. This is the agreement upon which the plaintiff's claim is based. The business was a failure. The franchisor took over the running of the Chesanyama business and the plaintiff was informed accordingly. The second defendant effectively abandoned the business. She " simply assumed' that the franchisor's representative was repaying the loan " as agreed'. A year later she was shocked to hear that the business had been closed down. Although the second defendant was informed by the plaintiff that the notarial bond registered over the movables in the Chesanyama store would be perfected, no application to perfect was received. Had the plaintiff perfected the notarial bond, it would have recovered the outstanding amount from the sale of the assets or at least limited the defendants' liability. Because the business was taken over by the franchisor, she has not insight into the books, financials etcetera and is unable to attest whether the amount claimed by the plaintiff is correct.

9. The second defendant's defence that she has no knowledge of the amount claimed is not bona fide. Having simply abandoned the business - her version - she placed nothing before this Court to suggest that she has made the least effort to ascertain what the indebtedness is. She has also not availed herself of the mechanisms provided by Rule 35 and simply ignored the statements of account attached to the particulars of claim.

10. Turning then to the first part of the defence raised, the defendants' counsel argued that the plaintiff had failed to mitigate its damages by its failure to perfect the notarial bond. The argument is misplaced. The plaintiff is not claiming damages. It is enforcing a contractual right to claim repayment of the monies that it loaned to the first defendant. There is also no obligation on the plaintiff in terms of the loan agreement to perfect the notarial bond, or in fact to call up any of the securities provided by or on the first defendant's behalf.

11. The second defendant appears to submit that she is prejudiced as a surety, by the conduct of the plaintiff, in failing to perfect the notarial bond. I suggested to counsel that she was relying on the benefit of excussion, which she had not renounced in terms of the credit guarantee that she provided.

12. Ex facie the credit guarantee, however, the second defendant is not a surety, she is a guarantor. A guarantee may amount to either a contract of suretyship, which an accessory obligation, or an original or primary obligation to pay or perform. List v Jungers, 1979 (3) SA 106 (A). The liability of the surety arises only when the principal debtor has made default and therefore the surety can demand that the principal debtor be first excussed (Voet 46.1.14). A principal or original debtor does not have the benefit of excussion.

13. The distinction between a surety and a guarantor is a difficult one to draw, and that an enquiry to ascertain the intention of the parties at the time they concluded the contract of guarantee, may well be necessary.

14. I am also mindful of the fact that the remedy provided by this rule has been described as drastic and extraordinary. It closes the doors of the Court to a defendant. It must accordingly be approached with great circumspection and reluctance to grant. Dowson & Dobson Industrial Ltd v Van der Werf, 1981 (4) SA417 (C).

15. In the premises, I make the following order:

1. Summary judgment is granted against the first defendant for:

1.1. Payment of the amount of R 512 054.86;

1.2.

Interest on the amount of R 512 054.86 at the prime interest rate of interest plus 10% (presently 20.25%) per annum, calculated on the daily balance and capitalised monthly, from 8 March 2017 to date of payment;

1.3. Costs of suit on an attorney and own client scale.

2. The second defendant is granted leave to defend.

3. The costs of the application for summary judgment against the second defendant are costs in the cause of the action.

4. Any judgment granted against the second defendant will be joint and several with the judgment granted against the first defendant.

___________________________________

HR FOURIE

ACTING JUDGE OF THE HIGH COURT