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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

EASTERN CAPE DIVISION – EAST LONDON  

                                                                                                       EL: 537/14

                                                                                                  ECD: 1137/14

                                                                                       Date Heard: 18/09/14

                                                                             Date Delivered: 30/09/2014

In the matter between:

TRUE GROUP PROPERTY FUND (PTY) LTD                                                         PLAINTIFF

AND

BERNON INVESTMENTS 5 (PTY) LTD                                                         1^ST DEFENDANT

(Registration number: 2000/014168/07)

JOHAN HUGO DE BUYS                                                                              2^ND DEFENDANT

(Identity Number: ….............................)

JUDGMENT

SMITH J:

[1] The plaintiff applies for summary judgment against the defendants for payment of the sum of R4 262 157. 85, an order declaring the first defendant’s immovable property executable, and certain other ancillary relief. The plaintiff’s claim is based on a loan agreement in terms of which certain monies were advanced to the first defendant. The loan was secured by way of a continuing covering mortgage bond over the property sought to be declared executable. The second defendant bound himself as surety and co-principal debtor for any amounts due to the lender in terms of the loan agreement. The lender has subsequently ceded all its rights and obligations in terms of the loan agreement to the plaintiff.

[2] The defendants oppose the summary judgment application on the following grounds:

(a)         the court lacks jurisdiction in respect of both of them;

(b)         the plaintiff lacks the necessary authority to institute the action;

(c)         the plaintiff failed to mitigate its damages;

(d)         they dispute the amount which is reflected in the certificate of balance as outstanding;

(e)         the particulars of claim are vague and embarrassing; and

(f)          the plaintiff lacks the necessary locus standi to institute the action.

Legal Principles

[3] It is trite law that a defendant seeking to avoid summary judgment being entered against him or her must satisfy the court that he or she has a bona fide defence.  A defendant is thus required to set out facts with sufficient clarity so as to establish a defence which, if proved at trial, would constitute a valid defence to the plaintiff’s action. (Maharaj v Barclays National Bank Ltd 1976 (1) SA 418 (A) at 426A-C).

[4] If the defendant’s defence is based on facts which are bald, vague or sketchy, it may cast doubt on his or her bona fides. (Breitenbach v Fiat SA (Edms) Bpk 1976 (2) 226 (T) at 228E-F)

Lack of Jurisdiction

[5] The first defendant averred that this Court lacks jurisdiction to hear the matter because its registered address had been changed to no 3 Berea Terrace, Berea, East London without the knowledge of the second defendant, who is its sole director. It furthermore suggests, albeit obliquely, that the fact that it has the same address and auditors as the True Group Funding (Pty) Ltd, with whom the first defendant initially concluded the loan agreement, its registered address may have been entered in the records of the Registrar of Companies as a result of an irregularity or misunderstanding.

[6] The first defendant further averred that since it had chosen its domicilium citandi executandi at number 9 Hillside Street, Silver Lakes, Pretoria, and that all legal process had in fact been served at that address, the plaintiff should have instituted legal action in the Pretoria High Court. The second defendant similarly averred that he also chose his domicilium citandi executandi at the same address in terms of the suretyship agreement, and that the plaintiff should accordingly have issued process out of the High Court having jurisdiction over his person.

[7] A domestic corporation can be resident at the place where its registered office is located, or where it has its principal place of business. (Dairy Board v John T Rennie and Co (Pty) LTD 1976 (3) SA 768 (W); Bisonboard Ltd v Braun Woodworking Machinery (Pty) [1990] ZASCA 86; 1991 (1) SA 482 (A).

[8] In Navigator Property Investments (Pty) v Silver Lakes Carson Shopping Center (Pty) Ltd and Other 2014 (3) All SA 591 (WC) the court held that where a company’s  registered office address is different to that of its principal place of business, the company would be legally and factually resident at both places, notwithstanding the evident intention of the legislature that the company’s legally chosen place of residence should be the same as its factual place of residence for jurisdictional purposes.

[9] A company’s registered address is objectively ascertainable from the records of the Registrar of Companies, notwithstanding the fact that there may be some internal disputes as to how it came about that the registered office is at an address different to that of its principal place of business. This is regardless of the fact that the stipulation of the registered office address may have occurred as the result of an oversight, manipulation by one of the other director, or some internal strife between the members. The processes which are required to address this anomaly are administrative in nature, and will not concern the court in the determination of the question of jurisdiction. (Hardroad (Pty) Ltd v Oribi Motors (Pty) Ltd [1997] 2 All SA 199 (W).

[10] Mr Roux, who appeared for the plaintiff, has accordingly correctly submitted that the plaintiff was entitled to have regard to the record of the Registrar of Companies in order to determine where the company is resident.

[11] The defendants’ contention that this Court lacks jurisdiction simply because they have appointed domicilium addresses outside its area of jurisdiction, merits no further consideration and can be rejected out of hand. As Mr Roux has correctly submitted, those addresses have merely been stipulated by the defendants as places where they would accept service of notices and court processes. A defendant is not entitled to oust the inherent jurisdiction of a Court by merely appointing a domicilum address outside its area of jurisdiction.

[12] The second defendant’s contention that this Court lacks jurisdiction in respect of his person because he resides in Pretoria, and had chosen his domicilium in terms of the suretyship agreement within the area of jurisdiction of the Pretoria High Court, is in my view also without any merit. It is an established principle of our law that the balance of convenience is an important consideration in determining whether or not a Court has jurisdiction. As Jafta JA stated in Cordiant Trading CC v Daimler Chrysler Financial Services 2005 (6) SA 205 (SCA), the primary objective of this approach is to avoid an unnecessary proliferation of proceedings and the possibility of conflicting decisions in respect of the same cause of action, between the same parties. (See also Sonia (Pty) LTD V Wheeler 1958 (1) SA 555 (A).

[13] The claim based on the suretyship agreement is accessory to that of that main loan agreement, and it is therefore proper and convenient that they be heard together.

Authority to institute application

[14] The defendants’ complaint in this regard was that the resolution by the directors of the plaintiff was only signed by two of the three listed active directors. I must say, however, that although Mr Bester did not abandon this point, he did not seriously pursue it during argument.

[15] This point is in my view also without any merit. Mr Roux has correctly argued that it is clear from the company records that the third director, namely Dennis Jacobus Bishop, is listed as having resigned. The resolution has therefore been duly passed and signed by all the plaintiff’s directors.

Mitigation of damages

[16] This is another of the grounds which was not seriously pursued by Mr Bester in argument. The defendants’ complaint in this regard is that the plaintiff did not institute proceedings immediately after the repayment term had lapsed, and had accordingly failed to mitigate its damages. This argument ignores the fact that the plaintiff did not cancel the agreement, but had instead claimed for specific performance in terms of the contract. The issue of mitigation does therefore not arise.

Correctness of the amount reflected in certificate of balance

[17] The sum total of the defendants’ averments in this regard are as follows:

’29.1 Save to admit that the certificate shall be prima facie proof of the contents and correctness thereof, the rest of the allegations contained in this paragraph are denied and the Plaintiff is put to the proof thereof. I have no idea where the Plaintiff came to an amount of R4 262 157.85. The certificate is only prima facie proof and I hereby deny the correctness thereof.”

40.2 I cannot admit or deny the allegations in terms of the amount claimed in this paragraph. The Plaintiff makes the averment that over the period September 2010 to March 2014 the First Defendant is indebted to TGF to the amount R3 114 782. 75, but in paragraph 16 that the First Defendant is indebted to the Plaintiff in the amount of R4 262 157.85.

and

40.3 This renders the Particulars of Claim vague and embarrassing since there is no indication as to how the Plaintiff came to a different amount as to 13 March 2014 by a difference of R1 114 735.10.”

[18] The loan agreement provides that a certificate of indebtedness given under the hand of the plaintiff or its agent, and certifying: the existence and amount of the indebtedness of the first defendant at any time; the fact that such amount is due and payable; as well as the amount of interest accrued and due thereon, shall constitute prima facie proof of the first defendant’s indebtedness.

[19] The certificate of balance thus constitutes prima facie proof of the extent of the first defendant’s indebtedness to the plaintiff and cannot be rebutted by bald, vague or sketchy averments which leave the Court guessing as to the true basis for the defendants’ denial of indebtedness. The first defendant has failed to set out any factual grounds on which it challenges the amounts stated in the aforesaid certificate. I am therefore not in position to decide whether or not the defence proffered in this regard will constitute a valid defense if proved at the trial. On the contrary, if the first defendant were to persist with these bald and elusive denials of indebtedness in the face of prima facie proof to this effect, there can be little doubt that its defence will be rejected by the trial court.

[20] The defendants also contended that the plaintiff’s particulars of claim are vague and embarrassing because they fail to reconcile the two different amounts which have been alleged to be due and payable. In this regard they averred in particular that the plaintiff failed to plead facts to explain the difference between the amounts stipulated in paragraphs 11 and 16 of the particulars of claim, respectively. It is however evident, on a reasonable reading of these paragraphs, that the amount referred to in paragraph 11 is the sum total of the various loans advanced to the first defendant, and that mentioned in paragraph 16 is the certified amount which is due and payable after the calculation of interest. This point is accordingly also without any merit.

[21] The second respondent has renounced the benefits of the defences relating to whether or not the money had been paid to the debtor (non numeratae pecuniae), and the correctness of the calculation of the debt due by the first defendant (errore calculi) in the suretyship agreement, and would in any event not be entitled to rely on the defence proffered by the first defendant in this regard.

Locus standi of the applicant

[22] The defendants contend that the cession by the lender, upon which the plaintiff’s action was founded, was invalid because the first defendant did not consent thereto in writing.

[23] I am of the view that this point is also without any merit.  Although the agreement stipulates that the prior written consent of the first defendant is required for a cession, this stipulation was subject to the provision that cession could take place if contemplated in the loan facility agreement. In this regard that agreement, in particular clause 9.5.2 thereof, clearly stipulates that the parties agreed that the lender may cede or delegate its rights and obligations to a third party. This defence can therefore also not be upheld.

[24] In the result  I am of the view that the defendants have failed to establish that they have a valid defence to the plaintiff’s claim, and there is accordingly summary judgment against the defendants, and in favour of the plaintiff, in the following terms :

(a)         Payment of the sum of R4 262 157.85;

(b)         Interest on the aforesaid amount calculated on a daily basis  and compounded monthly on the aforesaid amount on the rate of 12% (twelve percent) per anum, calculated from 13 March 2014, to date of final payment, both days inclusive;

(c)         Costs of suit on the scale as between attorney and client;

(d)         An order declaring the first defendant’s property known as:

Erf [….....], Registration Division J.R Gauteng Province, Measuring 2340 (two three four zero) square metres. Held by Deed of Transfer no. […....], subject to the conditions therein contained and especially subject to the conditions imposed by the Silver Lakes Homeowners’ Association (1992/0046661/08) executable for the said sum, interest and costs;

(e)         An order authorizing the issuing of a writ of execution against the immovable property referred to in paragraph (d) supra.

_____________________

J.E SMITH

JUDGE OF THE HIGH COURT

 

Appearances

Counsel for the Applicant          :         Advocate Roux

Attorney for the Applicant          :         Boshoff Smuts Inc

                                                                   Unit A03 Rabie and Glover Avenue

                                                                   Lyttelton

                                                                   0140

                                                                   Tel: 087 754 600

                                                                   Ref: Boshoff/JC/bt0526

                                                                   C/O

                                                                   Russel Incorporated

                                                                   10 Rochester Road ‘Vincent

                                                                   EAST LONDON

                                                                   Tel: 043 726 2770

                                                                   Ref: B Sparg

 

Counsel for the Respondents    :         Advocate Bester  

Attorney for the Respondents    :         Boshoff Inc

                                                                   c/o

                                                                   Kriel Patersen Attorneys

                                                                   16 Smartt Road

                                                                   Nahoon

                                                                   EAST LONDON

                                                                   Tel: 043 735 2155

                                                                   Ref:   N Northe/ADB/NN0R0890

 

Date Heard                               :         18 September 2014

Date Delivered                          :         30 September 2014          

 

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