SASFIN Bank Ltd & another v Motors Hoogland Bethlehem CC & others (3719/2020) [2021] ZAFSHC 144 (15 April 2021)

IN THE HIGH COURT OF SOUTH AFRICA

FREE STATE DIVISION, BLOEMFONTEIN

Case no: 3719/2020

In the matter between:

SASFIN BANK LIMITED

REGISTRATION NUMBER: 1951/002280/06 1st Plaintiff

SUNLYN (PTY) LIMITED

REGISTRATION NUMBER : 1988/000147/07 2nd Plaintiff

and

MOTORS HOOGLAND BETLEHEM CC

(REGISTRATION NUMBER : 2008/131875/23) 1st Defendant/Excipient

IGNATIUS MICHAEL FERREIRA N.O. 2nd Defendant/Excipient

FREDERICK FERREIRA N.O 3rd Defendant/Excipient

PIETER YZELLE MORRISSON N.O 4th Defendant/Excipient

IGNATIUS MICHAEL FERREIRA N.O 5th Defendant/Excipient

FREDERICK FERREIRA N.O 6th Defendant/Excipient

PIETER YZELLE MORRISSON N.O 7th Defendant/Excipient

JUDGEMENT: PARKS, AJ

HEARD ON: 26 MARCH 2021

DELIVERED ON: 15 APRIL 2021

[1] This is an exception raised by the defendants/excipients to the plaintiffs’ particulars of claim in terms of Rule 23 of the Uniform Rules.

[2] The relief sought is to uphold the exception; set aside the plaintiffs’ particulars of claim; dismissing the plaintiffs’ action and in the alternative affording the plaintiff to amend its particulars of claim.

[3] The plaintiffs opposed the exception.

[4] The first ground of exception is that Astfin Western Cape (Pty) Ltd (the cedent) entered into a rental agreement with the first defendant by renting and installing equipment being CCTV systems, cameras and televisions which constituted rendering a security service as, defined in Private Security Industry Regulation Act 56 of 2001 (herein after referred to as PSIRA).

[5] The cedent is not registered in terms of section 20(1)(a) of PSIRA and therefore cannot render a security service in terms of this Act.

[6] The plaintiff has failed to allege that the cedent was registered in terms of PSIRA, which resulted in the plaintiff’s failure to plead sufficient allegations to sustain its cause of action, alternatively, the allegations contained in the particulars of claim are vague and embarrassing.

[7] The second ground of exception is that the cedent has entered into an agreement with first defendant by renting and installing equipment such as PABX electronic communications and/or telecommunications systems. The cedent had rendered a service as defined in section 7 of the Electronic Communications Act 36 of 2005 (hereinafter referred to as ECA).

[8] Plaintiff had failed to allege that the cedent was the holder of such licence in terms of ECA or exempted from the requirement of holding such licence. The plaintiff had failed to plea sufficient allegations to sustain its cause of action, alternatively, the allegations contained in the particulars of claim are vague and embarrassing.

[9] The response by the plaintiff in opposing the exception raised is that none of the plaintiffs is service providers of security services or electronic communication services. However, they are financial service providers’ namely first defendant a bank and the second defendant a finance house. The cedent had purchased the equipment on behalf of the first defendant who were unable to, and as a result conclude the rental agreement for delivery and installation of the equipment.

[10] The cedent had ceded its rights to a 3rd party namely Sunlyn (Pty) Ltd (first plaintiff) as specified in annexure “E”, who in turn ceded their rights to Sasfin Bank Limited (second plaintiff) as specified in annexure “F1”.

[11] Plaintiff’s council argued that the plaintiff had a claim for specific performance, since they agreed that if in default with payments, the plaintiffs were entitled to accelerate the rental monthly payments that are due and payable as if the agreement would have run its course.

[12] The rental agreement related to the renting of equipment such as a PABX system known as a telecommunication system with the agreement marked annexure “B” and a CCTV system including with the agreement marked annexure “C”.

[13] The first defendant had agreed to the terms of the agreement, which amongst others were the delivery and installation of the systems and rental payable on 1 April 2018 of R9 049.32 and R3 437.85 respectively.

[14] However, on 9 July 2020 the first defendant breached its obligations by failing to effect payment of monthly instalments and was in arrears in an amount of R65 467.38. The plaintiff is thus claiming what was agreed which is immediate payments of all amounts due in terms of the rental agreement.

[15] The reason for the first and second plaintiffs’ citation as parties to the proceedings whilst they are not parties to the rental agreements are as a result of the cession agreements.

[16] The 1st – 7th defendants are cited as parties in their capacity as trustees of the Natie Ferreira Family Trust and the Thabo Ferreira Family Trust respectively. The latter two trusts had bound themselves as guarantors and co-principal debtor with the first defendant as per annexure “H1” and “H2”.

[17] In terms of Rule 23 (1) of the Uniform Rules, an exception may be raised if the pleading is vague or lacks averments, which are necessary to sustain an action or defence.

[18] Section 1 of PSIRA defines security service as : one or more of the following services or activities:

(a) protecting or safeguarding a person or property in any manner;

(b) giving advice on the protection or safeguarding of a person or property, on any other type of security service as defined in this section, or on the use of security equipment;

(c) providing a reactive or response service in connection with the safeguarding of a person or property in any manner;

(d) providing a service aimed at ensuring order and safety on the premises used for sporting, recreational, entertainment or similar purposes;

(e) manufacturing, importing, distributing or advertising of monitoring devices contemplated in section 1 of the Interception and Monitoring Prohibition Act, 1992 (Act 127 of 1992);

(f) performing the functions of a private investigator;

(g) providing security training or instruction to a security service provider or prospective security service provider;

(h) installing, servicing or repairing security equipment;

(i) monitoring signals or transmissions from electronic security equipment;

(j) performing the functions of a locksmith;

(k) making a person or the services of a person available, whether directly or indirectly, for the rendering of any service referred to in paragraphs (a) to (j) and (l), to another person;

(l) managing, controlling or supervising the rendering of any of the services referred to in paragraphs (a) to (j);

(m) creating the impression, in any manner, that one or more of the services in paragraphs (a) to (l) are rendered;

[19] Section 1 of the ECA defines 'electronic communications service' means any service provided to the public, sections of the public, the State, or the subscribers to such service, which consists wholly or mainly of the conveyance by any means of electronic communications over an electronic communications network, but excludes broadcasting services.

[20] Section 1 of ECA defined ‘electronic communications network service’ as follows :

a service whereby a person makes available an electronic communications network, whether by sale, lease or otherwise-

(a) for that person's own use for the provision of an electronic communications service or broadcasting service;

(b) to another person for that other person's use in the provision of an electronic communications service or broadcasting service; or

(c) for resale to an electronic communications service licensee, broadcasting service licensee or any other service contemplated by this Act,

[21] Erasmus explains in the Superior Court Practice: Volume 2, an exception is an inherent defect in the pleading. Even if the allegations are true, the summons does not disclose a cause of action.

[22] In Trope v South African Reserve Bank and Another and Two Other Cases 1993 (3) SA 208 (T) has formulated the position as follow: “an exception to a pleading on the ground that it is vague and embarrassing involves a two-fold consideration. The first, is whether the pleading lacks particularity to the extent that it is vague. The second, is whether the vagueness causes embarrassment of such a nature that the excipient is prejudiced.'

[23] In Southernport Developments (Pty) Ltd (previously known as Tsogo Sun Ebhayi (Pty)) v Transnet Ltd 2003(5) SA 665 (W), Blieden J has discussed the test to be considered in an exception. Firstly, the excipient must establish that the pleading is excipiable on every reasonable interpretation. Secondly, the pleader is entitled to a charitable interpretation. Thirdly, minor blemishes can be cured by further participation and lastly, the pleadings must be read as a whole.

[24] I am called upon to decide whether the particulars of claim are vague and embarrassing.

[25] Upon a reading of the definitions as contained in section 1 of the respective acts (PSIRA & ECA) pertaining to services, I am afraid I do not agree with the argument of the defendant/excipient. The reason why I say this is because the leasing, delivering and installation of the equipment does not amount to the rendering of service.

[26] In my view, a simple way to explain it is if someone leases a cellular phone to another person and charges a rental fee, this in effect does not mean that the lessor renders a communication service to the lessee. The lessee still has to ensure that a communication service provider is acquired in order to use the item leased for communication purposes.

[27] If the same example is equally applied to the security service aspect, I do not agree with the argument that it is a service that falls within the definition of a security service. The fact that someone installs and leases a CCTV system is in actual fact as the word says only a system leased and not a security service per se rendered.

[28] The agreement marked annexure “A” bears the heading of “master rental agreement” and has clauses at the bottom of the 1st page which are of importance. Clause 1c) reads “the equipment to be supplied is based on your requirements and your choice, we have made no suggestions about your choices. Clause 1 d) reads “we are purchasing the goods from the supplier at your special instance and request” and clause 1e) reads “you agree that this agreement applies to the hiring of goods.”

[29] The above paragraph does not contain any legal jargon or any language that is not understandable. It is plain and simple stating what the parties had agreed upon. Equipment is supplied at first defendant’s request and relates only to the renting of equipment. Therefore, the first defendant knew at the time when the agreement was concluded what the contents of the agreement was. Annexure “B” & “C” attached to the agreement identifies the equipment and the rental agreement agreed upon.

[30] What is of concern to me is that the agreement was concluded in March 2018 and at the time of default in July 2020; the agreement had already run its course for more than two years. I do not believe that the defendants only at the time of default either realised or started to wonder whether the cedent could have provided the services as requested and/or was authorised to do so. The fact of the matter remains that the defendant had the use of the equipment for more than 2 years and never deemed it fit to enquire regarding the leasing of the equipment nor did they notify the cedent that they could not have leased the equipment and requested cancellation of the agreement.

[31] I do not agree that the excipient is unable to plea to the particulars of claim. The excipient rather attacks the validity of the agreement and argues that the parties were unable to conclude same since the cedent is not licensed to render the respective services.

[32] I am in conclusion of the view that the defendant/excipient has not succeeded in persuading me that the particulars of claim are vague and embarrassing.

[33] The general rule pertaining to costs is that cost follows the successful party. However, parties had agreed in the agreement to the jurisdiction of the Magistrate’s Court, which justifies deviation as ordered below.

[34] As a result of the above reasoning I make the following order :

26.1 Both of the exceptions are dismissed with costs.

26.2 Costs are on Magistrates Courts’ scale.

C.S. PARKS AJ

For the 1st – 7th defendant/Excipient: Adv Moorhouse

Instructed by: Ayanda Tsikayi Attorneys Inc

c/o KWJ Attorneys Inc

BLOEMFONTEIN

For the 1st and 2nd Plaintiff : Adv Aucamp

Instructed by: KWA Attorneys

c/o Hill, McHardy & Herbst