Stamford Tyre (Africa) (Pty) Ltd v Tyre Plus CC and Others (1988/2009) [2010] ZANCHC 69 (10 December 2010)

Reportable YES / NOCirculate to Judges YES / NOCirculate to Magistrates: YES / NOCirculate to Regional Magistrates: YES / NO

IN THE HIGH COURT OF SOUTH AFRICA

(Northern Cape High Court, Kimberley)

Case Nr: 1988/2009

Date heard: 26/11/2010

Date delivered: 10/12/2010

In the matter between:

STAMFORD TYRES (AFRICA) (PTY) LTD …................................................PLAINTIFF

and

TYRE PLUS CC …................................................................................1ST DEFENDANT

DOUW GERBRAND VAN DER WALT …............................................2ND DEFENDANT

PIETER DANIEL BADENHORST …....................................................3RD DEFENDANT

CORAM: HENRIQUES AJ

JUDGMENT

HENRIQUES AJ.

This is an application for summary judgment in which the plaintiff claims payment of the sum of R 122 307, 05 against the first and second defendants jointly and severally together with interest and costs on an attorney client scale.

The plaintiff instituted action against the first to third defendants for goods sold and delivered for the period July 2008 to March 2009. The plaintiff had extended a credit facility to the first defendant, and the second and third defendants had by virtue of a deed of suretyship executed on 23 September 2008 bound themselves as sureties and co-principal debtors with the first defendant for any liability to the plaintiff.

I could not find any record of the third defendant having entered an appearance to defend. In their opposing affidavit, the first and second defendants acknowledged their indebtedness to the plaintiff in the sum of R122 307, 05. The first and second

defendants however, deny that such amount is presently due and payable and in essence plead a compromise.

The first and second defendants allege that on receipt of the letter of demand from the plaintiff’s attorneys of record, they made an offer to settle the outstanding amount by providing post-dated cheques. Such offer was accepted by the plaintiff’s attorneys.

In terms of the agreement, four cheques would be provided to the plaintiff’s attorneys with the fourth cheque being used in settlement of interest and costs. A letter enclosing the three cheques in settlement of the capital is annexed to the affidavit as “TP1” and the acknowledgment by the plaintiff’s attorneys of receipt of the three cheques as “TP2”.

The first and second defendants further allege that it had been agreed that the plaintiff’s attorneys would present the cheques on agreed upon dates in terms of a payment schedule and in breach of the agreement the cheques were not presented as agreed.

As a result of the plaintiff’s attorneys not adhering to the payment schedule, a letter was written, annexed as “TP3”.

Essentially the first and second defendants plead a compromise. In Be Bop a Lula Manufacturing and Printing CC v Kingtex Marketing (Pty) Ltd 2008 (3) SA 327 (SCA), the Supreme of Appeal held that principles of offer and acceptance govern whether an agreement of compromise has been concluded. The Court was of the view that in order to decide whether a compromise had been concluded, the first question was whether the cheque constituted an offer of compromise, in other words, whether the proposal objectively construed was intended to create binding legal relations and appeared like that to the offeree. On the facts of that matter the Court found that the cheque objectively constituted an offer of compromise and amounted to an invitation to deposit the cheque to indicate its acceptance.

I am of the view that the allegations in the first and second defendants opposing affidavit can be likened to those in the Be Bop case.

The issue for determination in this application is thus whether the first and second defendants have disclosed under oath that they have a bona fide defence to the plaintiff’s claim. Have they in their affidavit sufficiently set out the facts and particulars upon which they rely for their defence?

Our courts have consistently held that the defence need not be formulated with the same precision as would be required in a plea. The defence must however, be set out with a sufficient degree of clarity to enable the Court to ascertain whether such defence, if proved at trial, would constitute a good defence to the action.

In Maharaj v Barclays National Bank Ltd 1976(1) SA 418 (A) Corbett JA at 426 A –E had the following to say:

“.... one of the ways in which a defendant may successfully oppose a claim for summary judgment is by satisfying the Court by affidavit that he has a bona fide defence to the claim. Where the defence is based upon facts, in the sense that material facts alleged by the plaintiff in his summons, or combined summons, are disputed or new facts are alleged constituting a defence, the Court does not attempt to decide these issues or to determine whether or not there is a balance of probabilities in favour of the one party or the other. All that the Court enquires into is: (a) whether the defendant has 'fully' disclosed the nature and grounds of his defence and the material facts upon which it is founded, and (b) whether on the facts so disclosed the defendant appears to have, as to either the whole or part of the claim, a defence which is both bona fide and good in law. If satisfied on these matters the Court must refuse summary judgment, either wholly or in part, as the case may be. The word 'fully', as used in the context of the Rule (and its predecessors), has been the cause of some judicial controversy in the past. It connotes, in my view, that, while the defendant need not deal exhaustively with the facts and the evidence relied upon to substantiate them, he must at

least disclose his defence and the material facts upon which it is based with sufficient particularity and completeness to enable the Court to decide whether the affidavit discloses a bona fide defence....... At the same time the defendant is not expected to

formulate his opposition to the claim with the precision that would be required of a plea; nor does the Court examine it by the standards of pleading.”

The plaintiff persists with summary judgment as it is of the view that the first and second defendants have not set out their defence with sufficient clarity to enable the court to determine whether a bona fide defence has been advanced. Mr. Olivier who appear on behalf of the plaintiff, submitted that I should have regard to the decision of Navsa JA in Joob Joob Investments v Stocks Mavundla ZEK 2009 (5) SA 1 SCA, and conclude that no defence has been disclosed on the papers.

At the hearing of the matter the parties legal representatives confirmed that the cheques in respect of the capital had been presented and that the only amount outstanding was in respect of interest and costs. Mr Van Niekerk who appeared asked me to take this into account and refuse summary judgment. However, if one has regard to the provisions of rule 32 (4), the parties are bound to what is contained in the affidavits filed unless oral evidence has been adduced.

Mr. Olivier requested me to enter summary judgment for the plaintiff in respect of the interest and costs and relied on the decision in Gralio (Pty) Ltd v DE Claassen (Pty) Ltd 1980(1) SA 816 (A) as authority for this submission. Unfortunately, I cannot agree that on the facts of this matter the decision in Gralio finds application.

I agree with his submission that a court can grant summary judgment in respect of that part of a claim to which a defendant has no defence and that this extends to a claim for interest and costs.

I have also considered the judgment of Navsa JA in Joob Joob. It is clear from such decision that summary judgment is not intended to deprive a defendant from having his day in court. At paragraph 32 of the judgment Navsa JA held as follows:

“The rationale for summary judgment proceedings is impeccable. The procedure is not intended to deprive a defendant with a triable 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.”

Given the facts of this matter, I am of the view that the first and second defendants have disclosed on oath a bona fide defence to the plaintiff’s claim. Such defence has been set out with sufficient clarity to establish a triable defence.

Accordingly I make the following order:

Summary judgment is refused.

The first and second defendants are given leave to defend the action.

The costs occasioned by the summary judgment application are to be costs in the cause.

______________________

JI HENRIQUES

ACTING JUDGE

Appearance for the plaintiff:

Adv D Olivier instructed by Duncan & Rothman, 39-43 Chapel Street, Kimberley.

Appearance for the defendants:

Mr M Van Niekerk of Engelsman Magabane Inc, 80 Du Toitspan Road, Kimberley