South Africa: North West High Court, Mafikeng

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Spar Group Limited v Tradebusters 1054 CC and Others (1153/2008) [2008] ZANWHC 41 (6 November 2008)

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[1] The Spar Group Limited, the plaintiff, seeks summary judgment against Tradebusters 1054 CC (the first defendant), J A Swigelaar (the second defendant) and C T Cornforth (the third defendant) for:

1. Payment of by the defendants in the sum of R3 141 843.86, jointly and severally, the one paying the other to be absolved;

2. Interest in the sum of R3 141 842.86 at the rate of 19.5% per annum calculated from 5 February 2008 until date of payment; and

3. Cost of suit on the scale as between attorney and own client.

[2] Only the third defendant opposes the application. He and the second defendant are sureties who have bound themselves for the payment of all monies which are due or may become due and owing from time to time by the principal debtor to the plaintiff from whatsoever cause arising. The Deed of Suretyship wrongly reflects the name of the first defendant which is the principle debtor.

[3] The third defendant limited his opposition to the application for summary judgment to challenging the quantum of the first defendant's indebtedness to the plaintiff.

[4] He says he ceased to be a member of the first defendant from mid 2003 and has not been involved in the affairs of the first defendant since then. He says he is accordingly not in a position to independently calculate the quantum of the alleged debt of the first defendant.

[5] He says he has a reasonable suspicion that the amount claimed is incorrect:

4. It does not appear from plaintiff's particulars of claim over which period exactly the plaintiff effected payment for "drop shipments" allegedly paid.

5. The outstanding balance owing in terms of the February statement does not tally with the amount claimed.

6. The amount of R2 906 335.08 which was allegedly due on the 28^th day of February 2008, according to the February statement issued by the plaintiff (Annexure "B" to affidavit resisting summary judgment):

(i) Did not relate to transactions over one week only;

(ii) Represents the accumulative balances which had been
payable by virtue of numerous previous weekly statements,
as suggested in paragraph 13 of the plaintiff's particulars of
claim;

(iii) Was comprised of any number of already overdue amounts
in respect whereof the first defendant was liable to pay
interest at the agreed rate;

(iv) The plaintiff indeed levied interest on the above overdue
amounts and included such overdue amounts in the
cumulative overdue amount;

(v) The amount claimed by the plaintiff includes interest in an
undeterminable sum for the account of the third defendant.

7. The plaintiff accordingly seeks to recover interest on interest, without making out a case entitling it to cumulative (capitalised) interest.

8. It is presently impossible to establish the quantum of the plaintiff's claim only in respect of the capital amount allegedly due with reference to the particulars of claim.

9. Compound interest may only be awarded where an express agreement to pay compound interest had been entered into by the defendant.

10. The plaintiff has in addition debited the first defendant's account with "sundry charges", without a basis having been disclosed in the Particulars of Claim or any annexure thereto, for doing so.

(h) It is inconceivable that the plaintiff has not, after having
taken possession of the business and moveable assets of
the first defendant in terms of the court order for the
perfection of its general notarial bond, sold the goods of
the first defendant in exercise of its rights in terms of the
order.

(i) A reasonable suspicion exists that the account of the first defendant was not credited by the plaintiff with the proceeds of the sale prior to verifying the quantum of its claim.

[6] I proceed to examine whether the third defendant does cast suspicion on the quantum of the indebtedness and, if so, whether that doubt is sufficient to raise a bono fide defence or, if it does not, whether I should exercise my discretion and deny the plaintiff summary judgment in whole or in part.

11. Ad para (a): The third defendant does not persist with this aspect regarding the period for which the plaintiff paid for "drop shipments".

12. Ad para (b): The third defendant correctly points out that the amount claimed in the summons, dated 10 April 2008, amounts to R3 141 842.86. A statement dated 1 February 2008 shows that the first defendant allegedly owed R2 906 335.80 on 28 January 2008 and R3 130 591.06 on 1 February 2008. The difference between the amount claimed and the amount as at 1 February 2008 amounts to Rll 251.18. This could be attributed to compound interest levied on the "monies due".

6.3 Ad para(c)(d)(e) and (f): The third defendant says that the plaintiff is not entitled to compound interest. Paragraph 1 of the credit agreement between the plaintiff and the first defendant expressly states that:

"OBLIGATION TO PAY PROMPTLY

THE PURCHASER SHALL DULY AND PROMPTLY PAY TO THE SELLER THE PRICES OF GOODS SOLD TO THE PURCHASER AND OTHER DEBTS OWING FROM ANY OTHER CAUSE, WITHOUT DEDUCTION OR DEMAND, ON OR BEFORE DUE DATE IN ACCORDANCE WITH THE CREDIT FACILITIES ALLOWED FROM TIME TO TIME. IF THE PURCHASER FAILS TO EFFECT PAYMENT OF ANY MONIES DUE TO THE SELLER ON THE DUE DATE, THE PURCHASER SHALL PAY INTEREST ON ALL SUCH OVERDUE MONIES AT THE RATE FROM TIME TO TIME EQUAL TO 5% ABOVE THE PRIME BANK OVERDRAFT RATE CHARGED BY THE SELLER'S BANKERS, CALCULATED FROM DUE DATE TO THE DATE OF PAYMENT, BUT NOT EXCEEDING THE MAXIMUM RATE ALLOWED IN LAW."

The phrase "Monies due" is a wide phrase. It means monies owing and payable. See Lagerney v Rich and Another 1973 (4) SA 340 (T). Monies in this context includes interest due and payable which have not been paid. This embraces compound interest.

6.4 Ad para (g): It may well be that "sundry charges" refer to monies described in clauses 13 and/or 14 of the credit agreement. But the first defendant is correct in saying that is not claimed in the particulars of claim. The third defendant does not say that sundries were claimed by the plaintiff while he was actively involved with the first defendant. I pay presume that they were not.

6.5 Ad para (h) and (i): The perfection of a notarial bond does not necessarily lead to an inference that the goods so secured have been sold. It is most unlikely that this would have been done without a judgment of a court of law. The plaintiff is seeking such a judgment in this application. I find it most unlikely that the third defendant who is resident in Vryburg would not know if the goods had been sold. A few simple inquiries would have provided the answer.

[7] I have taken into account that the third defendant has not been involved in the running of the business and the difficulties which he may experience. I also take into account the submissions made by Mr M Hitge, who appeared for the third defendant. He submits that to test the bono fides of a defendant it is necessary to contextualize the defendant's averments in their totality, instead of a simplistic manner stating that a mere denial of the alleged quantum and the questioning of the correctness of the calculations submitted do not constitute a bono fide defence. Since summary judgment is an extraordinary and stringent remedy, which ought to be granted only if there is no doubt that the Plaintiff has an unanswerable case, summary judgment should be refused where the quantum of liability may need to be proven in future. See Mercantile Bank Ltd v Star Power CC and Another 2003 (3) SA 309 (T) on 310 -312 and Tesven CC and Another v South African Bank of Athens 2000 (1) SA 268 (SCA) at 277 - 278.

With the possible exception of some amount which could relate to sundries, which have not been claimed in the summons, I am of the view that the third defendant has not raised any cause for concern regarding the quantum of the claim.

I am disposed to exercise the discretion entrusted to this court, to take into account the possibility that the amount claimed includes sundry items that have been levied by the plaintiff since at least June 2003. I am also mindful that interest on this amount has been claimed and capitalised. I am not able to calculate this. I however think that by entering judgment for R3 000 000.00 and granting all three defendants leave to defend the balance is the best that can be done.

In the premises:

13. Summary judgment is entered against the defendants for payment of R3 000 000.00, jointly and severally, the one paying the others to be absolved.

14. Interest on the sum of R3 000 000.00 at the rate of 19.5% per annum calculated from 5 February 2008 to date of payment.

15. That leave be granted to the defendants to file a pleas within 15 days from date of this judgment

16. That the defendants pay the costs of this application jointly and severally the one paying the others to be absolved.

A A LANDMAN

JUDGE OF THE HIGH COURT

ATTORNEYS:

FOR THE APPLICANT : MINCHIN & KELLY

FOR THE 3^rd DEFENDANT : STEFAN VAN RENSBURG ATT