1
REPUBLIC OF NAMIBIA
IN THE HIGH COURT OF NAMIBIA, NORTHERN LOCAL DIVISION, OSHAKATI
JUDGMENT
Case no: I 239/2013
In the matter between:
FIDES BANK NAMIBIA LIMITEDPLAINTIFF
and
LISIAS KUKEINGE SHILONGO1STDEFENDANT
SILAS LAMEKA2ND DEFENDANT
Neutral citation: Fides Bank Namibia Limited v Shilongo(I 239/2013) [2016] NAHCNLD 21 (07 March 2016)
Coram:CHEDA J
Heard:03/02; 07/04; 27/04; 28/10; 07/12/2015
Delivered:07 March 2016
Flynote: An exception can successfully be raised under two circumstances; where the summons and/or particulars of claim is vague and embarrassing and if the summons and/or particular of claim lack averments which are necessary to sustain an action ordefence. However where they have been couched with sufficient particularity, the court is reluctant to grand it.
Summary:Plaintiff advanced a loan to 1st defendant and 2nd defendant stood as a co-principal debtor and guarantor. First defendant defaulted in his installments and plaintiff sued 2nd defendant for the recovery of the same. Second defendant applied for an exception on the basis that plaintiff should have followed the preliminary procedure of negotiations as stipulated in the SME loan agreements. Second defendant was aware of his indebtedness and cannot be allowed to wriggle out of his obligation on the basis of technicalities.
ORDER
- The application is dismissed with costs.
JUDGMENT
CHEDA J:
[1]This is an application for an exception. The background of this matter is briefly outlined below.
[2]Plaintiff is a commercial bank registered and incorporated in accordance with the terms of the laws of the Republic of Namibia.
[3]First defendant is a major male, residing at Erf No. 226, Outapi, Omusati Region, while 2nd defendant is a major male and businessman carrying out business under the name and style of Lameka Garage in Outapi, Namibia.
[4]On or about 16 March 2012 and at Oshakati, plaintiff represented by one Beata Ndinelago Kalola entered into a written loan agreement with 1st defendant wherein plaintiff lent and advanced an amount of N$250000 to 1st defendant who undertook to service the said loan in accordance with the agreed terms and conditions laid down by the plaintiff.
[5]On the same date 2nd defendant in writing bound himself as surety and/or guarantor and co-principal debtor with the defendant for the full and due repayment of all sums, including interest and all other charges payable by 1st defendant. In the premises 1stand 2nddefendant are said to be jointly and severally liable to the plaintiff in the amount of N$274440-38 excluding interest at the rate of 20% per annum a tempore moraefrom date of judgement to date of final payment.
Plaintiff is represented by Mr. Aingura. First defendant is a self-actor while 2nd defendant is represented by Mr. J. Greyling (Jnr).
[6]As the dispute is anchored on the summons and particulars of claim, it is essential to refer to the particulars of claim which are couched as follows:
“On or about 16 March 2012and at Oshakati, the plaintiff, represented by Beata Ndinelago Kalola, duly authorized and the first defendant, entered into a written loan agreement in terms of which plaintiff would lend and advance the sum of N$250000.00 to the first defendant.”
[7]Mr. Greyling for 2nd defendant filed an application for an exception. The basis for the said exception can be summed up as follows:
a)thatplaintiff does not aver and allege in its amended particulars of claim that 1st defendant has complied with conditions precedent as stipulated in clause 5 of the said loan contract. The said clause relates to the first disposal of 1st defendant’s assets, money included before instituting proceedings against 2nd defendant; and
b)that plaintiff does not aver that it first entered into negotiations with 2nd defendant with regards to the breach of contract as stipulated in clause 8 of the SME Loan Contract and also that clause 1 & 2 with regards to the steps which need to be taken before summons are issued against a debtor.
[8]It is further 2nd defendant’s argument that the loan agreement and service agreements are two separate entities. According to him, therefore, the summons is bad in law as it contains no averment that plaintiff has complied with its obligations to render service, the type of services that were rendered to 1st defendant, how and when it was rendered and how the service fees were calculated or that 1st defendant was in default in installments. It is for the above reasons that 2nd defendant is not obliged to make any payment to plaintiff.
[9]It is common cause that plaintiff applied for and was granted a default judgment on the 19 May 2015. The said judgment was rescindedas a result of an application by 2nd defendant. The parties were called upon to attend a Case Planning Conference which they did and a case planning order was issued. First defendant filed an exception which plaintiff did not reply to. That is the gist of its argument.
[10]Plaintiff filed an application for condonation for non-compliance with the Rules of Court in this matter and Mr. Greyling has no objection to the application being granted and as such it is accordingly granted and in that regard there is no issue arising therefrom.
[11]Mr. Aingura urged the court to adopt the test applied inGideon Hangula v Motor Vehicle Accident Fund Case No. I 1704/2009, 20 September 2011 where the learned Judge stated:
“The test that must apply is this: notwithstanding the truth of the facts alleged, do these facts in law establish any sufficient cause? If they do not, the exception is good and must be allowed.”
[12]The same approach was adopted in Joseph Frans Kaiiri v Bulk Trade (Pty) Ltd and Others (unreported case no. 1103/05, 31 March 2006) at 12 where Parker J stated:
“The crisp question to determine is essentially this: is the defendant’s contention that the plaintiff’s pleading objected to, taken as it stands, legally invalid for its purpose well founded? (see Salzmann v Holmes 1914 AD 152 at 156)”
[13]In our law an exception may be taken on a summons and particulars under two circumstances:
a)If it is vague and embarrassing; and
b)If it lacks averments which are necessary to sustain an action or defence, as the case may be, see Buthelezi v Minister of Bantu Administration & Another 1961 (3) SA 256 (N).
[14]The remedy of an exception is available where the exception goes to the root of the opponent’s claim or defence. The resultant effect would be either impossible to settle the case, or at least part of it in a cheap and easy manner or to protect oneself against an embarrassment which is so serious as to merit the costs even of an exception, see Barclays Bank International Ltd v African Diamon Exporters (Pty) Ltd (2) 1976 (1) SA 100 (W).
[15]It is the duty of the excipient to persuade the court that, upon every interpretation that the particulars of claim can reasonably bear, no cause of action is disclosed and further that the court for the purpose of an exception, takes the facts as alleged in the pleadings as correct. There are two fundamental points which should be borne in mind and taken unavoidably taken into serious consideration. The said point is that an exception may only be taken when the effect in the pleadings appear ex facie the pleading, since no facts may be adduced to show that the pleading is expiable, see Viljoen v Federated Trust Ltd 1971 (1) SA 750 (0) at 754.
[16]However, it has been held, that, in as much as the court is obliged to take the pleadings as they stand for the purposes of determining whether an exception to them shall be upheld is limited in operation to allegations of fact and cannot be extended to inferences and conclusions not warranted by the allegations of fact. This principle, therefore, does not oblige the court to stultify itself by accepting facts which are manifestly false and so divorced from reality that they cannot possibly be proved, see Herbstein & Van Winsen “The Civil Practice of the High Court of SA 5th edition Vol I. In TWK Agriculture Ltd VNCT Co-operative Ltd 2006 (6) SA 20 at 23 Theron J ably stated:
“for the purpose of determining whether the plaintiff’s particular of claim are expiable, all the factual allegations therein must be taken to be admitted. Only the allegations that are manifestly false or so divorced from reality that they cannot possibly be proved, need not be accepted…..(see p23 pink)
[17]It is 2nd defendant’s argument that the plaintiff’s particulars of claim do not disclose a cause of action. The correct position in our law is that plaintiff’s pleading must set out every material fact which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to judgment of the court.
[18]However, it is not necessary to include every piece of evidence which is necessary to prove each and every fact, but, every fact which is necessary to be proved. In Mckevery v Cowan, NO. 1980 (4) SA 525 (2) at 526, Beadle AJ(as he then was) clearly stated the law when he remarked:
“It is a first principle in matters of exception that, if evidence can be led which can disclose a cause of action alleged in the pleading, that particular pleading is not expiable. A pleading is only expiable on the basis that no possible evidence led on the pleadings can disclose a cause of action.”
[19]Second defendant’s exception is based on the lack of particularity that plaintiff in addition, thereto, failed to follow the procedures laid down under the SME Loan agreements. It is trite that particulars of claim should be in the form of a statement which contains material facts which plaintiff relies on in support of its claim against a defendant and the conclusion of law that it is entitled to deduce from the facts stated and of course a prayer. The statement must be clear and concise. In addition, it must be stated in such a manner that it has sufficient particularity to enable the defendant to reply thereto, see Standard Bank of South Africa Ltd v Oneanate Investments (Pty) Ltd 1995 (4) SA 510 (c) at 552.
[20]These courts have stated time without number that the aim of an exception procedure is to avoid the leading of unnecessary evidence and to dispose of a case in whole or in part in an expedious and cost effective manner, see Coloniel Industries Ltd v Provincial Insurance Co. Ltd 1920 CPD 627.
[21]As this procedure can finalise the matter at that stage, the excipient has an onerous task of convincing the court that it should be upheld. The excipient should show that facts averred to by the plaintiff are palpably untrue or so improbable that they cannot be accepted. The excipient has a duty to persuade the court that upon every interpretation which the pleading can reasonably bear, no cause of action or defense is disclosed, see Trustees BIR Fund v Break Through Investments CC 2008 (1) SA 67 (SCA) at 71.
[22]In casu the dispute is based on a contract where 2nd defendant stood as guarantor. There is evidence that all the parties signed the contract. It is not in dispute that 1st defendant has started paying this debt although he is in arrears. At this point, the question then is, is 2nd defendant not aware that he stood guarantor for 1st defendant the consequences of which are that he is legally obliged to step into his shoes.
[23]The summons and particulars of claim are unambiguous in this regard. Courts are reluctant to decide upon exception questions concerning the interpretation of a contract where its meaning is uncertain. It is therefore necessary for the excipient to demonstrate that the contract is unambiguous, see Miller No v Prosperity African Heldings (Pty) Ltd (2182/2010 [2013] NAHCMD delivered 17 September 2013) where Schimming-Chase AJ state:
“the courts are reluctant to decide upon exception questions concerning the interpretation of a contract. Thus, when the exception is based on an interpretation of a contract, the excipient is required to demonstrate that the contract is unambiguous. In Michael v Caroline’s Frozen Yoghurt Parlour (Pty) Ltd, reference was made to the case of Sacks v Venter, a case involving a clause in a deed of sale of certain immovable property which provided that the sale was subject to a particular condition to which an exception was taken on the grounds that no cause of action was disclosed Ramsbottom J observed:
“I think it is clear that if the condition is unambiguous so that evidence is not admissible for its interpretation, the question of its interpretation can properly be decided on exception; Standard Building Society v Cartooulis, 1939 AD 510, is authority for this. The question then is whether clause 7 unambiguously bears the meaning contended for by Mr. Goldsmid or whether it is ambiguous and whether evidence of the circumstances in which the agreement was made would be admissible to elucidate its meaning. In order to succeed, the excipient must show that the clauses is unambiguous and that the meaning for which he contends is the correct meaning.””
[24]On the facts, it is clear that 2nd defendant is indebted to plaintiff and for defendant to try resile from it on the ground of technicality is tantamount to raising a spurious defence to plaintiff’s claim. The particulars of claim have been drafted with sufficient particularity to an extent that 2nd defendant is at liberty to plead to it if he were to do so. The particulars of claim are unambiguous and 2nd defendant has failed to show otherwise.
[25]Second defendant is placed in a difficult position as 1st defendant acknowledge that he is indebted to plaintiff, is in arrears and is making all the efforts toliquidate his debt. It is, therefore, difficult to understand 2nd defendant’s contention when the facts are clear and for the purpose of an exception procedure are correct. The legislative procedure which 2nd defendant sought to cling on are in my view, a red herring.
[26]In light of the above, the order of the court is that:
- The application is dismissed with costs.
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M Cheda
Judge
APPEARANCES
PLAINTIFF:M.M Nyambe
Of Shikongo Law Chambers, Ongwediva
DEFENDANT:S. Aingura
Of Aingura Attorneys, Oshakati