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REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

GAUTENG LOCAL DIVISION, JOHANNESBURG

CASE NO: 30727/2015

In the matter of:
FIRSTRAND BANK LIMITED TRADING INTER ALIA AS FIRST NATIONAL BANK	Applicant
and
GOOTSPA INVESTMENTS (PTY) LTD	First Respondent
MOYO ZOO LAKE (PTY) LTD	Second Respondent
MOYO AT THE PIER (PTY) LTD	Third Respondent
MOYO OPERATIONS (PTY) LTD	Fourth Respondent
MOYO MELROSE ARCH (PTY) LTD	Fifth Respondent
MOYO CRAFT (PTY) LTD	Sixth Respondent
MOYO MARKETING (PTY) LTD	Seventh Respondent
MOYO PRODUCTIONS (PTY) LTD	Eighth Respondent
MOYO RETAIL (PTY) LTD	Ninth Respondent
PHILIP OSTRIN	Tenth Respondent
JASON BRADLEY LURIE	Eleventh Respondent

JUDGMENT:

APPLICATION FOR LEAVE TO APPEAL

 

BESTER AJ

[1] The tenth respondent applies for leave to appeal, in terms of section 17(1)(a)(i) of the Superior Courts Act, 10 of 2013, to the full court of this division, against the whole of the judgment granted by me on 24 August 2018.

[2] Mr Pincus SC, who again appeared on behalf of the tenth respondent, advanced the following argument in support of the application:

a) The applicant sought to discharge its onus to prove the tenth respondent’s liability solely by the production of certificates of balance. 

b) The introduction of the new certificates in reply constituted new matter, which is not allowed in a replying affidavit, and should have been introduced by way of a supplementary founding affidavit.

c) By introducing new certificates in reply, the applicant had abandoned the certificates of balance relied on in the founding affidavit, which means that it must fail in the discharge of its onus to prove the claim in its founding affidavit, unless it was allowed to rely on the certificates introduced in reply.

d) Allowing the introduction of the amended certificates in the replying affidavit was highly prejudicial to the tenth respondent, as he was precluded from dealing with the certificates of balance annexed to the replying affidavit in any manner whatsoever, because he could not as of right file a further affidavit.

e) This prevented an inquiry into whether the tenth respondent had upset the prima facie evidentiary value of the certificates, as referred to in Senekal v Trust Bank of Africa Limited[1], where Miller JA, for a unanimous court, explained the approach to the use of certificates as prima facie evidence as follows:

“The onus in this case was clearly on the respondent to establish the amount of the indebtedness of the principal debtor, Luna.  … It sought to discharge that onus, inter alia, by production of the certificate which, by agreement between the parties, was to be regarded as prima facie evidence (or proof) of the amount of such indebtedness.  The inquiry, then, in the light of what I have just said, is whether at the end of the case the prima facie evidence afforded by the certificate had been so disturbed as to prevent its becoming sufficient proof.”[2]

(The underlined portion being the part specifically relied upon by the tenth respondent)

f) If the new certificates had been raised in a supplementary founding affidavit, the tenth respondent would have been entitled to deliver a supplementary answering affidavit to deal with the new certificates.

[3] There is no dispute that the certificates introduced in reply differ from the certificates introduced in the founding affidavit in two respects, namely the amounts certified in the latter took into account (i) the interest on the debts calculated from inception at 1% above the prime rate, instead of the original 2% above prime, and (ii) payments received against the debts after the date of the initial certificates. 

[4] The tenth respondent argues that it does not matter what the basis of the difference is; it only matters that they are new certificates, which the applicant sought to replace the original certificates with.  As a result, he contends, the full extent of the evidence relied upon by the applicant was now contained in the replying affidavit, which means that the applicant introduced new matter in the replying affidavit.  This, the applicant was not entitled to do.  By nevertheless being permitted to do so, the tenth respondent was deprived of an opportunity to challenge the certificates. 

[5] The tenth respondent has not said that he would have been able to set up a defence to the new certificates.  He argues that the mere fact that these certificates were introduced in reply, prevented him from dealing therewith, whatever the content of a challenge may have been. 

[6] Mr Pincus SC explained that the tenth respondent is not contending that the new certificates could not have been introduced; the complaint is against the manner in which it was done.  The tenth respondent’s case in support of the strike out application, was purely based on the fact that the certificates constituted new matter in reply.

[7] I do not find the grounds advanced convincing, for at least three reasons. 

[8] In Rossouw and Another v Firstrand Bank Limited[3], the Supreme Court of Appeal had opportunity to consider the situation where, in an application for summary judgment, the plaintiff seeks to hand in a certificate of balance at the hearing, in support of a claim amount that is less than that which is claimed in the summons. 

[9] It should be kept in mind that summary judgment is strictly regulated in terms of rule 32, and provides, inter alia, in rule 32(4) that no evidence may be introduced by the plaintiff otherwise than by the affidavit referred to in sub-rule (2).  In this context, Cloete JA, for a unanimous court, explained as follows:[4]

“The certificate did not, as the court a quo, considered, amount to new evidence which would be inadmissible under rule 32(4).  To the extent that the certificate reflects the balance due as at the date of hearing, it is merely an arithmetical calculation based on the facts already before the court that the court would otherwise have to perform itself.  Such calculations are better performed by a qualified person in the employ of a financial institution.  And to the extent that such a certificate may reflect additional payments by the defendant after the issue of summons, or payments not taken into account when summons was issued, this constitute an admission against interest by the bank, and the bank is entitled to abandon part of the relief it seeks.  Certificates of balance handed in at the hearing (whether a quo or on appeal) perform a useful function and are not hit by the provisions of rule 32(4).”

[10] In the instant matter, the two ways in which the certificates in reply differed from the certificates in the founding papers, equate to that dealt with by the Supreme Court of Appeal in Rossouw’s matter: there was an arithmetical calculation of reduced interest, and payments not taken into account in the previous certificate, were deducted. 

[11] The Supreme Court of Appeal concluded that a certificate of this kind does not constitute evidence in contravention of rule 32(4).  I thus agree with Mr Ströbl’s (for the applicant) submission that, by parity of reasoning, it cannot be said that introducing such certificates in reply, in ordinary motion proceedings, constitute new matter, or a new case being made out in reply. 

[12] The recalculation of the interest rate is in any event specifically a response to the tenth respondent’s answer alleging the lower interest rate, and thus was appropriately a matter to be dealt with in reply.[5]

[13] Even if the new certificates constituted new matter, there are at least two further reasons why the argument is devoid of merit.

[14] Rule 6(5)(e) expressly states that the court may in its discretion permit the filing of further affidavits.  The tenth respondent acknowledges that he had not requested to file a further affidavit, but argues that he was not obliged to do so, because new matter should not have been allowed in reply.  He loses sight of the logical inconsistency in his argument: If the applicant had been allowed to supplement its founding affidavit instead of introducing the certificates in reply, the tenth respondent would still have had to obtain leave to supplement his own papers. Either way, he would have had to rely on rule 6(5)(e). 

[15] Further, there is no absolute rule prohibiting the introduction of new matter in reply,[6] and a party will be afforded the opportunity to respond thereto should it so require.[7]  Thus, there is no disadvantage to the tenth respondent in allowing the new certificates in reply compared to its introduction through a supplementary founding affidavit.  In this matter, as I recorded in paragraph 16 of the judgment, the tenth respondent in any event conceded that, if the application for strike-out fails, the certificate is unassailable, subject to the third defence originally raised.  That defence, I found, lacked merit and is not revisited in this application for leave to appeal.

[16] Having considered the detailed grounds of the application, I am of the opinion that the proposed appeal would not have a reasonable prospect of success, and the application must therefore fail.

[17] The tenth respondent further contends that he was substantially successful in his defence relating to the wrong interest rate having been charged, and as a result, so the argument goes, I failed to exercise my discretion reasonably and judicially when I did not find that the applicant should be deprived of all its costs up to the filing of the replying affidavit.  I do not consider a reduction of 1% on the interest rate substantial success.  In my opinion, another court would also not draw that conclusion. 

[18] In any event, a party must show exceptional circumstances to appeal against a costs order only, in terms of section 16(2)(a)(ii) of the Superior Courts Act.  The tenth respondent has not advanced any exceptional circumstances. 

[19] In the result, the application for leave to appeal is dismissed with costs.

 

______________________________________

A Bester

Acting Judge of the High Court of South Africa

Gauteng Local Division, Johannesburg

 

 

Heard: 19 February 2019

Judgment: 22 February 2019

 

 

For the Applicant: Adv W Ströbl

Instructed by: Jason Michael Smith Inc.

For the Tenth Respondent: Adv SP Pincus SC

Instructed by: Mouyis Cohen Inc.

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