Standard Bank of South Africa v Van Den Bergh NO and Others (M227/15) [2016] ZANWHC 11 (17 March 2016)

IN THE HIGH COURT OF SOUTH AFRICA

(NORTH WEST DIVISION, MAHIKENG)

CASE NO.: M227/15

DATE: 17 MARCH 2016

In the matter between:

THE STANDARD BANK OF SOUTH AFRICA.............................................................APPLICANT

And

HENDRIK JOHANNES VAN DEN BERGH NO................................................1ST RESPONDENT

CORNELIUS JACOB VAN DEN BERGH NO..................................................2ND RESPONDENT

BAREND JACOBUS PETRUS VAN DEN BERGH..........................................3RD RESPONDENT

HENDRIK JOHANNES VAN DEN BERGH NO...............................................4TH RESPONDENT

JUDGMENT

Landman J:

[1] The Standard bank of South Africa (the bank) has launched an application against Hendrik Johannes Van Der Bergh NO, Cornelius Jacob Van Den Bergh NO, Barend Jacobus Petrus Van Den Bergh NO and Hendrik Johannes Van Den Bergh NO, the first to the fourth respondents, claiming payment of the sum of R 209,457.22 and other relief.

[2] On 2 May 2012 the bank granted overdraft facilities to Eravin Construction CC (Eravin) in terms of a written agreement, attached to the papers as “MES2”. The bank alleges that it has complied with its obligations in terms of this agreement and lent money to Eravin. Eravin was placed in business rescue on 11 June 2014. But nothing is made of this by any of the parties.

[3] Eravin is in default of its obligations towards the bank in terms of the overdraft agreement because it failed to repay the overdraft facility. As at 25 February 2015 the balance outstanding, which is due and payable by Eravin to the bank, is R 209 457.22 together with interest at 12% per annum payable from that date to date of payment. The certificate of balance is attached.

[4] It is common cause that all the respondents bound themselves as co-principal debtors and sureties, in terms of three suretyship agreements attached to the papers, for the payment when due of all the present and future debts of any kind of Eravin due to the bank. It is common cause that although the suretyships were concluded in English and Afrikaans, that their legal import is identical.

[5] The only remaining defence upon which the respondents rely, for their opposition to the application, is the following:

(a) In terms of the overdraft agreement “MES2”, the overdraft facilities are payable on demand if Eravin is in default of its obligations in which event the applicant may review the terms and conditions applicable to the facilities or increase the rate of interest charged or terminate the facilities by giving Eravin written notice requesting the repayment of amounts owing to the applicant immediately or on the date stated in the notice.

(b) In terms of clause 3.6 the overdraft facilities had to be reviewed by not later than 22 February 2013. In terms of clause 3.2.2.2 .11 the overdraft facilities expired on 22 April 2013.

(c) The founding affidavit contains no allegation that the facilities which terminated on 22 April 2013 were reviewed and what the terms and conditions of the reviewed facilities were.

(d) Furthermore, the applicant makes no allegation that Eravin breached its obligations in terms of the terms of the overdraft agreement and, if there was such a breach, what steps were taken in terms of clause 10.2 of the terms and conditions for the overdraft facilities.

(e) The applicant relies on Eravin’s breach of the overdraft agreement and attaches Eravin’s account statement (MES14) as proof of the outstanding amount. This statement clearly pertains to withdrawals and deposits made after the termination of the overdraft agreement relied upon. The only inference that can be drawn from the statement is that the said transactions were made in terms of an agreement between Eravin and the applicant that was entered into subsequently to the termination of the overdraft agreement relied upon. As already stated, the applicant does not rely for its case against sureties on any agreement that was entered into subsequent to the termination of the overdraft agreement.

(f) In the premises, the applicant has failed to make out a case against Eravin based on the terminated overdraft agreement.

[6] It is trite that in motion proceedings, affidavits serve a dual function of both pleadings and evidence. See Radebe and Others v Eastern Transvaal Development Board 1988 (2) SA 785 (A) at 793 D-F.

[7] In Union Government v Van der Merwe 1921 TPD 318 Wessels JP, De Waal J concurring) said at 321:

‘The legal scope of the surety’s contract is identical with that of the principal debtor – accessorium sui principalis naturam sequitur. The surety undertakes the same obligation as the debtor, and undertakes to perform this same obligation so soon as the debtor, when called upon, fails to perform it. Troplong, Cautionnement, 46. It is true there are two contracts, the one between the creditor and the debtor and the other between the creditor and the surety. But the contract between the creditor and the surety is not an independent contract with an obligation of its own but an accessory contract with the very same obligation that exists between the principal debtor and the creditor.’

[8] In order to hold the sureties liable the bank must show that Eravin is indebted to it. The bank relies only on the overdraft application concluded in 2012 with expiry date 22 April 2013. I need not decide this application on the evidence.

[9] The bank relies on an agreement that expired on 22 April 2013 in order to claim what appears to be monies lent on an overdraft after that date. It therefore behoves the applicant to set out why it is entitled to rely on an agreement that has expired. It is perhaps a technical point, but Mr Rossouw SC, who appeared for the respondents, is entitled to take the point on their behalf.

[10] The bank is not entitled to the order that it seeks. But I intend to postpone the application to allow the parties to file further affidavits to deal with this aspect.

[11] The costs of today are to be borne by the bank.

Order

[12] I make the following order:

1. The application is postponed to a date to be arranged with the office of the Judge President. The applicant shall approach this office for a date before 30 April 2016.

2. The applicant is granted leave to file a supplementary founding affidavit by 24 March 2016.

3. The respondents are granted leave to file a supplementary answering affidavit by 8 April 2016.

4. The applicant may reply to the supplementary answering affidavit by 18 April 2016.

5. The parties shall file supplementary heads of argument.

6. The applicant shall pay the respondents’ cost incurred in connection with the appearance on 10 March 2016.

A A Landman

Judge of the High Court

Appearances

Date of hearing: 10 March 2016

Date of Judgment: 17 March 2016

For the Applicant: Adv Greyling

Instructed by Van Rooyen Tlhapi & Wessels Inc

For the Respondent: Adv Rossouw SC

Instructed by Nienaber & Wissing Attorneys