CASE NO
CASE NO.: (P) I 2180/2008
IN THE HIGH COURT OF NAMIBIA
In the matter between:
STANDARD BANK NAMIBIA
LIMITED Plaintiff
And
CORNVINUS ADRIAAN
KLAZEN Defendant
CORAM: ANGULA, A.J.
Heard
on: 17.02.2009
Delivered
on: 23.02.209
JUDGMENT:
ANGULA, A.J.:
This is an application for summary
judgment. The applicant issued summons against the respondent in
which it claims payment of the sum of N$92 198.27, together with
interest at the rate of 24.40% per annum calculated in advance and
compounded monthly from 2 July 2008 to date of payment, being monies
lent and advanced by the applicant to the respondent as overdraft on
the respondent’s current account, which the applicant alleges is
due and payable notwithstanding demand.
After the summons was served the
respondent entered appearance to defend, whereupon the applicant
lodged the present application for summary judgment alleging that
the respondent has no bona
fide defence and that
appearance to defend has been entered solely to delay the matter.
In his affidavit filed in opposition to the application for summary
judgment the respondent denied that he does not have a bona
fide defence and that he
had entered appearance to defend in order to delay the matter. I
should mention that the opposing appears to have been drafted by the
respondent himself. I will try to summarise what is stated in the
respondent's opposing affidavit. I must point out that it is not
written in an easily and clearly comprehensible language. The
respondent also appeared in person at the hearing of the
application.
Setting out the facts upon which his
defence is based the respondent stated that the applicant lent him
the money on terms and conditions which solely served the
applicant’s interest. He went on to say that a “mutual
relationship” existed
between him and the members of the applicant’s management of the
branch where he conducted his current account since 2000; that he
has over the years built up a good credit record. He further stated
that his understanding is that the relationship between him and the
applicant as a service provider and banker was that they take
calculated risks through open communication on equal footing brought
about by their contractual relationship. The respondent stated
further that while he did not deny that he was indebted to the
applicant he could not recall having agreed, expressly or tacitly,
to repayment terms that he regard as ill-considered and unrealistic
to comply with; that he would have expected that any call up or
cancellation by the applicant of the facilities he was enjoying
would be communicated to him “within
reason, clearly well in advance, without suffocating me, the
defendant’s, economic existence”.
He went on to say that contrary to his expectation the applicant
unilaterally and without informing him decided to reduce the
facilities, which action was verbally confirmed to him by an
official of the applicant.
Following that verbal communication
his understanding was that he would henceforth operate the
facilities within the verbally agreed approved limits, whereas the
applicant viewed his conduct as a violation of the terms of the
facilities. The respondent further states that “that
having been allowed/extended an ‘over-the-limit credit exposure’
facility which ‘all of a sudden’ dictated such drastic action
that demanded it being reduced in and on unreasonable proportions
and terms which I, the defendant as client of the
applicant/plaintiff found completely unacceptable and unaffordable –
are draconic, unfair and discriminate in what otherwise should have
been a balanced mutually consented contractual relationship”.
He stated further that the conduct of the officials of the
applicant amount to discrimination against him and have dehumanised
him; that their actions “contradicted
the principle of fairness”;
that the sum total of actions amount to a “unilateral
breaking of a contract on the part of the applicant/plaintiff”.
It is trite that in evaluating
whether the respondent has a bona
fide defence the court
must consider the totality of all of his allegations.
"One
of the things clearly required of a defendant by Rule 32 (3) (b) is
that he set out in his affidavit facts which, if proved at the trial,
will constitute an answer to the plaintiff's claim. If he does not do
that, he can hardly satisfy the Court that he has a defence. The
sub-rule, however, requires that the Court be satisfied that there is
a bona fide defence, and the qualification gives use to some
difficulty. On the face of it, bona fides is a separate element
relating to the state of the defendant's mind. A man may believe in
perfect good faith that he has a defence, and may state honestly the
facts which he relies upon, yet the law may be against him, or he may
be honestly mistaken about the facts. He is bona fide, but he has no
defence. Another man may make averments which, if they were true,
would be an answer, in law, to the plaintiff's claim; but, to his
knowledge, the averments may be false. He is not bona fide.
If, therefore, the averments in a
defendant's affidavit disclose a defence, the question whether the
defence is bona fide or not, in the ordinary sense of that
expression, will depend upon his belief as to the truth or falsity of
his factual statements, and as to their legal consequences. It is
difficult to see how the defendant can be expected, in his affidavit
to 'satisfy the Court' (I use the words of the sub-rule), not only
that what he alleges is an answer to the plaintiff's claim, but also
that his allegations are believed by him to be true. There is no
magic whereby the veracity of an honest deponent can be made to shine
out of his affidavit."
See: Breitenbach
v Fiat SA (Edms) Bpk 1976
(2) SA 226 (T) at 227 - 228
As can be seen from the respondent’s
affidavit, he stated categorically that he does not dispute his
indebtedness to the applicant. That would be the end of the matter.
However, he went on to lay out a string of contentions which he
apparently believed to constitute a defence to the applicant's
claim. It is therefore necessary to consider whether those
contentions individually or collectively constitute a defence.
During the argument I enquired from the respondent that in view of
his admission under oath that he does not deny his indebtedness to
the applicant, what then was his defence? He responded that his
defence is the unfair treatment that was meted out to him by the
applicant. It is a strange defence, I must confess.
The respondent’s first defence
appears to be that he did not have knowledge that he would be called
upon to repay the amount lent to him, which he would consider
unrealistic to pay. In my view the respondent is hardly bona
fide neither is he candid
about the facts preceding the applicant’s calling up the
facilities. It is unlikely that the applicant would simply out of
the blue decide to call up the facilities without the respondent
being in contravention of the terms upon which the facilities were
extended to him. The respondent does not say how much the overdraft
limit was when it was granted to him; whether he has been servicing
the facilities; what amount he was called upon to pay which he
found to be unrealistic; whether the applicant knew what was his
monthly income. Even if the respondent believed that the applicant
had agreed to take a calculated risk in lending the money to him, I
do not think the respondent was bona
fide in expecting that the
applicant would not call up the facility if the risk was increasing
and becoming unmanageable or to such an extent that the applicant
might suffer loss.
As to the allegation that the
respondent expected to be informed in advance, it would appear from
his own version that he was verbally informed by the officials of
the applicant. During his submissions, before me, the respondent
stated that he had previously worked for a banking institution for a
considerable period of time. I would therefore expect him to be
fully aware about the procedure and workings of banks such as the,
in particular if a customer defaults or fails to service his
overdraft facility that the bank would call up such facility. It is
common practice by banks that when an account becomes delinquent the
bank manager would normally write a letter or call the account
holder in to advise that the account is overdrawn and what
arrangements the account holder would make to bring the balance
within the agreed limit. It will be extraordinary that this did not
happen in the instant matter. In any event, when the respondent
applied for the overdraft facilities, he tacitly agreed to be bound
by the applicant’s practice with regard to calling up of the
facility in the event of the facility not being properly managed.
Again for those reasons I do not
think that the respondent was bona
fide. I find that there
is no substance in the respondent’s contention that he did not
expect the applicant to unilaterally call up the facilities. I
however feel that I should deal with the legal position pertaining
to the bank’s right to call up the overdraft facilities.
In Trust
Bank of Africa Ltd v Senekal
1977 (2) SA 587 (N) at 601 the court held that:
“As regards the capital amount
thereof (the principal debt) it would normally (in the absence of
agreement as to a specific duration of the facility) be repayable
either on demand or after reasonable notice to customer.”
The legal position, as I understand
it, is that all overdrafts are repayable on demand. However, where
an overdraft is withdrawn notice must be given. This principle has
been derived in our law from the English banking practice. The
Appellate Division of South Africa, in the matter of Volkskas
Beperk v Van Aswegen 1961
(1) SA 493 (A) at 496 referred with approval to the English case of
Rouse v Bradford Banking
Company [1894] AC 586 at
596, where the following was stated:
“It is not necessary to consider
what the rights of the bank were with regard to their debtors when
they had agreed to an overdraft. The transaction is of course of the
commonest. It may be that an overdraft does not prevent the bank who
has agreed to give it from at any time giving notice that it is no
longer to continue, and that they must be paid their money. This I
think at least it does; if they have agreed to give an overdraft
they cannot refuse to honour cheques or drafts, within the limit of
that overdraft, which have been drawn and put in circulation before
any notice to the person to whom they have agreed to give the
overdraft that the limit is to be withdrawn. That effect I think it
has in point of law; whether it has more than that in pot of law it
is unnecessary to consider. Even if it has no greater effect in
point of law it is obvious that neither party would have it in
contemplation that when the bank had granted an overdraft it would
immediately, without notice, proceed to sue for the money; and the
truth is that whether there were any legal obligation to abstain from
so doing or not, it is obvious that, having regard to the course of
business, if a bank which had agreed to give an overdraft were to act
in such a fashion, the results to its business would be of the most
serious nature. It may be therefore that the parties simply
contracted upon the basis of that state of things, that there was a
legal right throughout for the bank at any time to sue for the
money.”
Similarly, in the matter of Standard
Bank of SA Ltd v Oneanate Investments (Pty) Ltd
1995 (4) SA 510 (C), the court stated the following:
"It
is often pointed out that, once having agreed to allow its customer
to overdraw, the bank cannot simply refuse to honour cheques issued
by the customer before he receives notice that his facilities are to
be withdrawn. (See, for example, Paget (op cit at 183); Ellinger (op
cit at 477).) That issue relates to the discontinuance or withdrawal
of overdraft facilities and it has no bearing upon the fact that a
loan on overdraft is repayable without specific demand. When the
customer requests an overdraft he must be taken to know that the loan
is repayable on demand and that if he wishes to repay the loan at a
later fixed date or only after receipt of notice of repayment from
the bank, he must conclude the necessary agreement with the bank to
vary the common law that a loan without an agreed date of repayment
is repayable on demand without specific notice.
I accept that where, for example, a
businessman seeks an overdraft from his bank he will often intend to
use the overdraft facility to fund his business on an ongoing basis
and that it could not be said that he intended the loan to be
repayable on demand. It may well be that in such circumstances it can
be established that the parties varied the usual role but each such
case will have to be decided on its own facts. In my view it cannot,
as a general rule, be said that either by necessary implication or in
order to ensure business efficacy the grant of an overdraft in
circumstances such as those just described must necessarily involve
the recognition of a tacit term that the bank will give its customer
specific notice before requiring repayment. The customer may feel
that he requires such notice in order to efficaciously conduct his
own business, but such a term is hardly necessary for the proper
conduct of the banking relationship between the parties to the loan.
As Millin J observed in Rapp and Maister v Aronovsky 1943 WLD 68:
'It has often been pointed out
that it is not sufficient to show that the term would be highly
reasonable or convenient to one or other or even both of the parties.
The cases show that the Court has to be continually on its guard
against being persuaded to introduce a term which, on analysis of the
argument, appears to be no more than a term which would make the H
carrying out of the contract more convenient to one of the parties or
to both of the parties and might have been included if the parties
had thought of it and if they had both been reasonable.'
(At 74-5.)"
I do not understand the respondent’s
complaint that he was not given notice. His complaint appears to be
that all of a sudden he was required to reduce the amount he was
allowed “over the limit exposure” in what he considers to be
unreasonable proportions which was unaffordable to him. In a
nutshell, he considered the applicant’s demand to be unreasonable.
The applicant’s demand might have been unfair or unreasonable but
in my view that does not absolve the respondent from the repayment
of the debt which is, on his own admission, owed to the applicant.
In other words, the respondent might be bona
fide in his view but his
view hardly amounts to a defence.
The respondent’s contention that he
was discriminated against by the applicant has no basis. He does
not state on what basis he was being discriminated against, for
instance, that similar unpaid or unserviced overdraft facilities of
other customers of the applicant were not called up. In any event,
in my view even if the respondent could pinpoint in what respect he
was being discriminated against, that would not constitute a
defence.
Finally I have to consider the
respondent’s all-encompassing contention that the entire
applicant’s conduct constituted a unilateral breach of the
contract between them. It is trite law that the overdraft
facilities the bank entered to a customer, like in the instant
matter, is a contract of loan; it is a lending of money by the bank
to the customer.
See: Trust
Bank of Africa Ltd supra
It goes without saying that one of the
obligations of the borrower is to repay the money lent to him by the
bank. Should the customer of the bank fail to repay the overdraft or
exceed the limit the bank has the right to demand payment. In my
view it would be unrealistic, if not absurd, to expect the bank to
enter into negotiations and agree with the customer whether the bank
should sue the customer for the money owed and if no such agreement
were reached the bank would be held to be acting unfair or
unreasonable if it proceeded to sue for the payment of its money. As
was stated in the authorities already referred to, the applicant has
a legal right throughout to sue for the payment of its money at any
time. The applicant did not need an agreement or consensus or
permission from the respondent before it could sue for the money
admittedly owed by the respondent. In my view the applicant did not
act unfair or unreasonable in suing for the payment of its money. In
any event even if I had arrived at such a conclusion this being not a
court of equity, that is a court that is authorised to apply equity
as opposed to law,
it would not constitute a defence against the applicant's claim.
I have therefore arrived at the
conclusion that none of the contentions advanced by the respondent
constitutes a bona fide
defence, whether individually or cumulative.
In the result I make the following
order:
[15.1] Summary judgment in the sum of
N$92 198.27 is granted against the respondent;
[15.2] Respondent is ordered to pay
interest at the rate of 24.40% on the sum of N$92 198.27 from 2 July
2008 to date of payment;
[15.3] Costs of suit;
[15.4] Further and/or alternative
relief.
__________________________
ANGULA, A.J.
ON BEHALF OF THE APPLICANT: MRS
SCHIKERLING
Instructed by: Etzold-Duvenhage
ON BEHALF OF THE RESPONDENT: In Person
Standard Bank Namibia Limited v Klazen ((P) I 2180/2008) ((P) I 2180/2008) [2009] NAHC 13 (23 February 2009);