IN THE HIGH COURT OF SOUTH AFRICA 
(WESTERN CAPE HIGH COURT, CAPE TOWN)

REPORTABLE
CASE NO: 17121/2011

In the matter between:

and
TRUSTEES FOR THE TIME BEING OF THE

IN THE HIGH COURT OF SOUTH AFRIC
 (WESTERN CAPE HIGH COURT, CAPE TOWN)

In the matter between:

and
TRUSTEES FOR THE TIME BEING

JUDGMENT

DAVIS, J

Introduction

The plaintiff instituted an action for payment by one Huganel and 5th Defendant, jointly and severally, in the amount of R15 215 877,25 and interest thereon at the rate of 11% per annum calculated daily and compounded monthly from 7 July 2011 to date of payment.

The defendant entered an appearance to defend and the plaintiff applied for summary judgement, and thus for the relief which I have set out above.

The defendants filed an affidavit opposing summary judgment which was deposed to by Mr Hugo Lamprechts, acting both in his personal capacity as 5th defendant and on behalf of Huganel.

The plaintiff's cause of action against Huganel and 5th defendant appears to rest on the following:

2. In the event of Huganel's failure to pay any amount owing to the plaintiff when due or in the event of the debt exceeding the sum of R14,2m, the plaintiff would be entitled to withdraw or terminate the facility and claim immediate repayment of the full outstanding balance.
3. Huganel failed to repay the required amounts within the specified period and the amount owing as at 7 July 2011 amounted to R15 215 877,12 which clearly exceeded the stipulated maximum of R14,2m. Notwithstanding demand for the amount there has been a refusal or a failure to make payment thereof.
4. Fifth defendant bound himself to plaintiff as surety and co-principal debtor in respect of these debts in terms of a suretyship agreement which was executed on 14 March 2008.
5. Hugonel, the fifth defendant, therefore are liable for the amount which is claimed together with interest thereon.

In the opposing Affidavit to which I have made reference, Defendants have raised three central defences:

2. Whilst the terms of the loan are not disputed there was an agreement between plaintiff and Huganel: sell one or two of the properties in the trust in order to extend the facility rather than converting it to a normal mortgage facility which arrangement had already been put into partial effect.
3. In relation to the quantum, an amount of R1 220 614,64 was paid on account of Huganel's indebtedness on 19 September 2011.

Mr Botha, who deposed to the affidavit on behalf of the plaintiff, is employed by the plaintiff as a litigation administrator. In his affidavit, he not only states that he has knowledge of the facts set out in the summons and in the particulars of claim but goes on to say:

"3.1 All the records, documentation and files are under my control.

According to Mr Dickerson, who appeared on behalf of the plaintiff, all the relevant facts are documented. He contended that the known terms thereof, the suretyship and its terms and the amount owing are demonstrated by virtue of the bank s records and could be clearly established from all the documents to which Mr Botha claimed to have regard. Furthermore, none of the facts were disputed by the defence. Even the quantum of the debt was left unchallenged save for the reference to a payment of R1,22m made on the account and paid the day before the deposition by Mr Botha of the affidavit to which I have made reference.

"Firsthand knowledge of every fact which goes to make up the Plaintiff's cause of action is not required... Where the Plaintiff is a corporate entity the deponent may legitimately rely on for his or her personal knowledge of at least certain of the relevant facts...on records in the company's possession."

"Although the deponent is a legal advisor one must also bear in mind that since it would appear that the claim against the Respondent has been established by reference to the books of the company and records of the Applicant, the legal advisor is probably in as good a position as anyone else to swear to the fact of the case."

Mr Muller, who appeared on behalf of the defendant submitted that the bank's claim against first defendant, was based on a series of agreements concluded between the Trust as principal debtor during the period March 2008 to August 2010. These agreements were concluded in Stellenbosch where various known facilities were all countersigned by Megan Ho-Kim and Fanie Steenkamp who had acted on behalf of plaintiff.

The plaintiff's affidavit filed in support of its application for summary judgment was deposed to by Mr Botha.   Mr Muller pointed out that Mr Botha described himself as employed by the bank as a litigation administrator at 5 Merchant Place, 9 Fredman Drive, Sandton. The point that Mr Muller made, was that there were negotiations which had taken place, prior to the conclusion of the contract, that as will become evident later in this judgment, this had a material bearing on the case which had been raised by the defendants. Further personal knowledge, which is required in terms of the Rule, cannot simply be derived without more from the documents which constituted the contractual basis of the relationship.

According to Mr Muller, because of the summary nature of the remedy, it is appropriate that the requirements of the Rule be strictly construed and that the verifying affidavit be carefully scrutinised by the Court to ensure that it comply fully with the requirements of Rule 33(2).

"The mere assertion by the deponent that he "can swear positively to the fact" (an assertion which merely reproduces the wording of the Rule) is not regarded as being sufficient, unless there are good grounds for believing that the deponent fully appreciated the meaning of his words...While undue formalism in procedural matters is always to be eschewed, it is important in summary judgment applications under Rule 32 that, in substance, the plaintiff should do what is required of him by the Rule. The extraordinary and drastic nature of the remedy of summary judgment in its present form is often being judicially emphasised...The grant of the remedy is based upon the supposition that the plaintiff's claim is unimpeachable and that the defendant's defence is bogus or bad in law. One of the aids to ensuring that this is the position is the affidavit filed in support of the application; and to achieve this end it is important that the affidavit should be deposed to either the plaintiff himself or by someone who has personal knowledge of the facts."

"The relevant facts would, therefore, be the conclusion of the contract and the terms thereof, the deposits in and withdrawals from the defendant's current account at the Stanger branch of the plaintiff's bank and the interest debits resulting in the debit balance as at that date alleged in the summons... and the further making of a demand for payment."

Coprbett, JA then observed -

"in regard to certain of these facts it would be difficult if not impossible for any one person to have first hand knowledge of every fact that goes to make up the plaintiff's course of action...In this case the deponent, Mr Mason, does not specifically state that he had personal knowledge of the overdraft arrangements made by the defendant with manager of the Stanger branch of the bank and the state of the defendant's current account at the relative time. On the other hand, he does say, in para 1 of his affidavit, that he is the assistant to the branch manager of this branch." at 424 A-E

Corbett JA thus found that it was not clear as to the precise duties or indeed the status of an assistant to the branch manager. Accordingly, the fact that Mr Mason had sworn positively that the defendant was liable to plaintiff on the claim and for the amount which had been detailed on the summons was:

"perhaps enough to justify the conclusion that in the course of his duties Mr Mason would have acquired a personal knowledge of the defendant's financial standing at the bank and the state of his current account," at 424F

He did insert the following caution:

"[t]he affidavit does not specifically allege that Mr Mason was not present when the arrangements were made or that he could not have acquired first hand knowledge of the arrangement in the course of his duties e.g. in a discussion with the defendant himself. Finally, it appears from the rest of defendant's affidavit that the real dispute relates not to the fact overdraft facilities were granted to him, but to the amount actually owed by him on the overdraft.
Viewing the matter 'at the end of the day' I consider that, although this is a borderline case, there is just sufficient to enable the affidavit to pass muster," at 424G-H

It appears therefore from this leading case, that Mr Muller was correct in his submission that personal knowledge is not invariably to be equated with a reading of the documents as provided to the reader.
In the present case the defendant states as follows in his affidavit:

In support of the aforementioned, I annex hereto a guarantee issue by Standard Bank on behalf of the purchase of the property... as well as a letter from the Applicant to the transferring attorneys who were also the Trust attorneys of record...The sale was effected by an agreement in the Trust represented by myself and applicant represented by Steenkamp.
Clearly the one hand of the Applicant did not know what the other was doing if the meaningless content of Annexure POC21 to the particulars of claim is taken into account."

"What is clear is that the deponent of summary judgment affidavit is expected to be someone who had knowledge of the facts in relation to the underlying claim.

The requirement that the founding affidavit be deposed to by the applicant or some other person who can swear positively to the facts precludes the affidavit being deposed to by someone whose knowledge of those facts is purely a matter of hearsay thus a person who deposes to such an affidavit on the basis that their information comes from another source, whether another person or from documents, is not a person who could swear positively to the facts giving rise to the claim."

Wallis J then continues at 117:

In an even more recent decision, Ebersohn AJ dismissed an application for summary judgment by a bank on the basis that the verifying affidavit failed to satisfy the requirement that the deponent should be possessed of personal knowledge of the facts relating to the course of action and the amount claimed, notwithstanding the deponent described herself as the bank's: "manager arrears - legal" and that accordingly she had: "personal knowledge of the facts and records related to this matter, the course of action as well as the amount owing."

In the course of his judgment Ebersohn AJ said:

In short, a fairly standard affidavit had been deposed to and similar arguments were raised as to whether this particular set of averments complied with Rule 33(2).

In dealing with a series of arguments similar to those which I have outlined, Tuchten J said at para 10:

"In my respectful view, this proposition may be too widely stated. The question, I suggest, is not the general one whether the deponent can competently testify to all the documents of the bank but whether she can competently testify to those relevant to the case in question. In the present case, Ms Harripersad, is the official with the applicant and the head of the department responsible for the recovery of the amounts which the applicant regards as being in arrears. She had the means to acquire personal knowledge of the contents of the documents attached to the statement of claim and she says in effect that she did so." para 1 0

"The principle is that in deciding whether or not to grant summary judgment, the court looks at the matter at the end of the day on all the documents that are properly before it." para 11

He therefore accepted:

Accordingly, the learned Judge concluded that there was no factual allegation in the plaintiff's statement of claim in respect of which the deponent would not have been able to testify in open court. In short, she would have been able to testify on all the relevant factors which justified the claim which had been brought by the plaintiff.  See para 15.

On this basis, the learned Judge found that the deponent could not claim to have sufficient personal knowledge and thus summary judgment was refused.

"The learned Judge in my respectful view overemphasised the necessity for providing detailed evidence on the factual materials supporting the knowledge of the deponent to an affidavit supporting an application for summary judgment in order to do so." para 14

However in this case, notwithstanding the approach adopted, the learned Judge examined the affidavit which had been deposed to in support of the application for summary judgment and found that there was at least:

"A rather awkward and incomprehensible statement in paragraph 1, that the facts therein contained being within my own personal knowledge alternatively obtained only from the Applicant's books and records which fall under my custody and control."

Accordingly, Eloff, AJ found that the deponent who, on the basis of this averment, either had personal knowledge or he did not have personal knowledge - had obtained personal knowledge from the books of account.  In Eloff,AJ's view:

"This type of equivocal approach to the matter is in my view unacceptable." para 16.

Accordingly summary judgment was refused.

1.	
2.	

By contrast, there will be cases where, given the defence raised,   some   further   knowledge   is   required   beyond   an examination of the documentation. In other words, knowledge of a personal nature may be required if it is relevant to the contractual relationship as alleged by the defendant and, if the defendant's version is proved could constitute an adequate defence to the claim.

With those broad principles in mind, I turn to the present case. In the present case, the defence is raised in the opposing affidavit. Mr Dickerson submits that, even if the document relied upon by the defendant on 26 October 2010 is taken into account, no payments had been made by the defendant, even if the special condition is taken into account. That special condition reads thus:

The plaintiff's argument is, even if one reads this clause into the factual matrix, no payment has been made and accordingly there is no defence against the application for summary judgment.
By contrast, the defendant informs the court in his affidavit:

"To the contrary, with the full co-operation of another arm of Applicant represented by Steenkamp, a different procedure was put in place in order for the debt to be reduced by means of the sale of properties as opposed to the conversion of the debt into a mortgage loan facility and the Trust kept to this procedure."

What is required by defendant is to put up a defence which, if properly proved at trial, could be justified as a defence against the claim. It is precisely because Mr Botha is unable to inform the court as to the validity of the allegations relating to Mr Steenkamp and his relationship on behalf of plaintiff with the defendant, that Mr Botha's affidavit falls beyond the borderline of that which must be accepted for the purposes of summary judgment.

DAVIS. J