Standard Bank of South Africa Limited v Naidoo and Another (EL456/16, 1156/16) [2017] ZAECELLC 13 (20 June 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

(EAST LONDON CIRCUIT LOCAL DIVISION)

Case No: EL 456/16

EDC: 1156/16

In the matter between:

THE STANDARD BANK OF SOUTH AFRICA LIMITED

Applicant

and

ANAND NAIDOO

First Respondent

CHANTEL MIRANDA NAIDOO (PRINCE)

Second Respondent

JUDGMENT

MAGEZA AJ

[1] This is an application for summary judgment against the defendants who are husband and wife and plaintiff seeks the following relief:

(a) Payment of the sum of R2 006 300.55 together with interest thereon at the rate of 8.50% per annum, calculated and compounded monthly in arrears from 16 March 2016 to date of payment.

(b) Costs on the scale as between attorney and own client;

(c) An order declaring the hypothecated property referred to below executable, namely:

ERF [...] EAST LONDON

BUFFALO CITY METROPOLITAN MUNICIPALITY

DIVISION OF EAST LONDON

PROVINCE OF THE EASTERN CAPE

IN EXTENT 887 (EIGHT HUNDRED AND EIGHTY SEVEN) SQUARE METRES

and which property is held by defendants in terms of Deed of Transfer No. [T...]

(d) Further and/or alternative relief

[2] The claim is founded on a written loan agreement concluded in East London on 31 October 2006, in terms of which agreement plaintiff

advanced monies to the defendants secured by way of a mortgage bond passed by the defendants in favour of the plaintiff to secure the loan.

[3] Defendants undertook to repay the loan in 360 monthly instalments of 15 882.00 per month. At the time of issuing Summons, the defendants arrear payments were in the sum of R1 075 419.06 and the full balance owing reflected on the certificate of balance R2 000 300.55.

[4] Summonses were served personally on the first defendant who agreed to accept service also on behalf of the second defendant on 18 April 2016. According to the applicant’s attorney, Mr Angus James Pringle’s affidavit deposed to in terms of Rule 14A, the last time the defendants paid a sum of R3 200.00 was on 1 April 2016. He also states therein that the defendants’ unpaid arrear monthly instalments amount to some 80 months. This translates from a desktop calculation to almost 7 years of non-payments.

[5] Notices in terms of section 88(3) and section129 of the National Credit Act, 34 of 2005 were addressed to the defendants and sent per pre-paid registered mail to the chosen domicilium and copies of track and trace records from the South African Post Office are annexed to the particulars of Claim.

[6] Some aspects of the long history of the matter are that on 26 February 2009, first defendant applied for debt review to have his estate declared to be over indebted. Despite a restructuring Order, first defendant defaulted on his arranged obligations in terms of this debt review Order.

[7] A letter dated 7 March 2016 from the applicant to the defendants confirms the termination of the debt review and debt re-arrangement

earlier entered into in respect of which the defendants had defaulted. The letter provides them a further opportunity to contact

the plaintiff’s offices should they wish to raise a dispute with regards to this termination. A further similarly worded email was also forwarded to first defendant by one Kaylene Elliot from the plaintiff’s attorneys on 08 April 2016.

[8] A notice of intention to defend was finally served on the plaintiff by the defendants on 24 April 2017, exactly a year since Summons had been served on the defendants. It appears from the pleadings that the defendants were jolted into action as a result of the plaintiff serving on them a notice of set down coupled with an application for default judgment.

[9] The summary judgment application is supported by an affidavit deposed to by one Farhana Essop and detailed therein are the following

averments, that:

9.1 She is duly authorised to depose to the affidavit and is Senior Manager, Personal Business Banking Credit Division of the plaintiff creditor and is situated at Head Office at 3 Simmonds Street Johannesburg.

9.2 She confirms in the affidavit that in her position, she has access to all records and information pertaining to the defendants’ indebtedness to the applicant and she is as such competent to attest to the pertinent facts.

9.3 She states that she is acquainted with the content of the records of the defendants in her possession and the relevant facts fall within her knowledge.

9.4 She can swear positively to the facts and verifies both the cause of action and the amount claimed and having done so, believes the defendants have no bona fide defence to the action.

[10] The deponent also annexed to her affidavit a ‘Certificate of Authority’ signed by one Funeka Montjane described as the Chief Executive, Personal and Business Banking for applicant bank. This Certificate confirms that the deponent was delegated various lending and loan administration responsibilities in the period April 2017 to April 2018. These include responsibility for all claims not exceeding R8 000 000; signing powers in respect of affidavits relating to any claim against any person; powers of attorney to institute or defend legal action against anyone or the bank as well as opposing same. The powers are extensive and it is clear to me that she is the appropriate executive to have signed the supporting affidavit in respect of this claim. The averments point out that she held the appropriate delegations of authority, was familiar with the records and the non-performance of the defendants account and that these were accessible to her and she viewed them whenever she needed to do so.

[11] It was contended on behalf of the defendants that it is not certain from the affidavit that the deponent is someone who was an executive with the necessary knowledge of the financial records and history of the defendants’ indebtedness to depose to the affidavit.

[12] I disagree with this contention and I am unable to lightly come to such a conclusion in the face of what she avers in her affidavit. In the first place, it is not necessary that such a deponent should be one who works or is employed by plaintiff within the East London area. Technology enables all of us to access information through computers and to talk and discuss same with anyone in a large organisation from anywhere in the country. The deponent is in Johannesburg at head office and it is common knowledge that such information is generally accessible through computers. In addition, Farhana Essop does state her designation and position to which she is appointed within the structure of the plaintiff organisation and that she is duly authorised to depose to the affidavit.

[13] In a summary judgment application, the deponent need not be authorised in order to depose to such an affidavit. The authorisation

of such a deponent should not be confused with the authorisation of the institution and prosecution of proceedings on behalf of another party. See in this regard Firstrand Bank Limited v Carl Beck Estates (Pty) Ltd and Another 2009 (3) SA 384 (E) at page 391 F to 392 and Dean Gillian Rees v Investec Bank Limited [330/13] ZASCA 38 [20 March 2012].

[14] In Shackleton Credit Management (Pty) Ltd v Microzone Trading 88 CC & another 2010 (5) SA 112 (KZP), para 13, it was held that:

‘[F]irst-hand knowledge of every fact which goes to make up the applicant’s cause of action is not required, and that where the applicant is a corporate entity, the deponent may well legitimately rely on records in the company’s possession for their personal knowledge of at least certain of the relevant facts and the ability to swear positively to such facts.’

[15] At the end of the day, whether or not to grant summary judgment is a fact-based enquiry. Many summary judgment applications are brought by financial institutions and large corporations. First-hand knowledge of every fact cannot and should not be required of the official who deposes to the affidavit on behalf of such financial institutions and large corporations. To insist on first-hand knowledge is not consistent with the principles espoused in Maharaj v Barclays National Bank Ltd 1976 (1) SA 418 (A)

Merits:

[16] In Joob Joob Investments (Pty) Ltd v Stocks Mavundla Zek Joint Venture 2009 (5) SA 1 (SCA) at paragraphs [32] and [33].

“[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.”

[17] Rule 32 requires that a defendant must disclose fully the nature and the grounds of his or her defence and the material facts relied upon.

To meet this requirement there must be full disclosure of the material facts to persuade the court that what he or she alleges if proved at the trial, will constitute a defence to plaintiffs claim.

[18] The defendants opposing affidavit is deposed to on behalf of both respondents and states at paragraph 4:

“Having regard to the summons and affidavit deposed to in support of application for summary judgment, I respectfully submit that the plaintiff’s cause of action is not supported by the pleadings and annexures thereto …”

In addition at paragraph 5:

“…. The true state of affairs is that the plaintiff’s house is not in order, as will be dealt with in sufficient detail below, and the plaintiff is abusing the court process in an attempt to obtain summary judgment.”

[19] Defendants then raise a number of points in limine. The first is a challenge directed at the supporting affidavit of Farhana Essop for the applicant and her alleged inability to swear positively to the facts and whether she had the requisite knowledge of ‘the facts herein contained’. I have already extensively dealt with this challenge and there clearly is no merit in the same. I am satisfied that from a consideration of the papers as a whole that she had sufficient knowledge of the particularities of this matter and had full access to the pertinent records of the defendants indebtedness to plaintiff.

[20] Secondly, they raise the plea of lis alibi pendens and argue that plaintiff instituted two actions against them in this Court based on the same cause of action. Annexed to the opposing

affidavit are copies of the first pages of the two summonses issued in 2009 and 2013. Save for these first page copies, the defendants

make no averments as regards whether the two actions were indeed defended by them or not. The allegation made regarding these actions

is that they have ‘never received proof and/or confirmation that these actions were formally withdrawn by the plaintiff (with the simultaneous tendering of costs)…’

[21] The defendants then state, on these vague and ‘tongue in cheek’ remarks, that they intend to raise the special plea of lis alibi pendens. It is trite that there are four requirements to prove in relation to a plea of lis pendens and these are (i) pending litigation (ii) the same parties (iii) same cause of action (iv) same subject matter. Again, these alleged

possible defences are raised in a generalised manner with reckless disregard to any detail whatsoever.

[22] The lis pendens defence is dilatory and if raised by special plea and is successful, all it does is stay proceedings only in respect of one of the summonses was issued. In this matter, the two summonses referred to have no bearing on the summons in the current matter issued in 2016. A stay of the case numbered summonses raised will not permanently prevent the finalisation of the present matter. The only resort defendants have to this plea is simple delay and without more, could well be indicative of a lack of a bona fide defence required by the Rule.

[23] The allegation that section 129(1)(a) notices were not despatched on the 18 March 2016 per registered post to their chosen domilicium or by electronic mail is also thin. The defendants admit their chosen domicilium is [...] B. R., Vincent, East London. This is also the address at which summonses were served. They point out instead that although the address was correct, it is the suburb postal number 5247 and not 5201 that is correct. What the defendants fail to deal with is the fact that these section 129 notices were also sent to the first defendant- Anand Naidoo’s email provided to the plaintiff by him.

[24] There is another address in Somerset West and in respect of this, defendant states that Annexure ‘L’, section 129 notice was sent by the plaintiff to [...] M. B. , Flufail Blose, Somerset Ridge, Somerset West. This according to him, did not reach them because -

“At the time, we were residing at [...] D. V., D. V. R., Somerset West.”

It is evident that defendant also denies receipt of another section 129 notice sent by email to ‘naidooarnie.gmail.com’ on 17 March 2016. Defendant also goes on to deny that a telephone call from the plaintiff was received by him on the same date as the email 17 March 2016.

[25] The defendants raise a further defence based on section 88(3) of the National Credit Act being debt review proceedings. Again with characteristic nonchalance, the first defendant states that they never received debt review termination notices. They offer little else by way of even an attempt to expand on the long list of bare denials.

[26] In so far as the disputes raised based on the certificates of balance and precise amounts outstanding, respondents averments clearly lack any basis and constitute thumb-sucks presented to shield them from the worst disregard of their obligations. I have not previously encountered or imagined a failure to pay a debt for 7 years and this is a record in stiff neck recalcitrant behaviour.

[27] The reality is that the defendants simply have no defence and to exacerbate their position, they can account of no payments on such a large loan. I have seen no proper and serious effort to honour their voluntarily assumed obligations. There is simply no defence to the failure to pay instalments. All the nibbling at plaintiff’s claim by way of technical but merely opportunistic defences has not produced a bona fide defence.

[28] In the result, the application for summary judgment succeeds and I make the following order:

28.1 Summary Judgment is granted against the first and second defendants and in favour of plaintiff as follows:

(a) Payment of the sum of R2 006 300.55 together with interest thereon at the rate of 8.50% per annum, calculated and compounded monthly in arrears from 16 March 2016 to date of payment, both days inclusive;

(b) Costs on the scale as between attorney and client;

(c) Collection commission on the amounts claimed above at the rate of 10% thereof;

(d) An order declaring the hypothecated property referred to below executable, namely ERF [...] EAST LONDON BUFFALO CITY MUNICIPALITY EAST LONDON under Deed of Transfer No. [T...].

_____________

MAGEZA AJ

Heard: 06/06/2017

Delivered: 20/06/2017

Attorneys for Applicant

DRAKE FLEMMER & ORSMOND

Tewkesbury House

22 St James Road

East London

Tel: (043) 722 4210

Ref: AJ PRINGLE/KE/SBF N64(C)

Attorneys for Respondents

GOUSSARD COETZEE & OTTO INC.

Unit 214, Second Floor

Oudehuis Centre

122 Main Road

SOMERSET WEST

C/O IC CLARK INC

Southernwood

EAST LONDON

Tel: (043) 743 3420