IN THE HIGH COURT OF SWAZILAND
JUDGMENT
Case No. 378/2017
In the matter between:
HLELEKILE ZWANE PLAINTIFF
And
SOLOMON SONTO 1st DEFENDANT
SOLPHARM SWAZILAND 2nd DEFENDANT
Neutral citation: Hlelekile Zwane v Solomon Sonto & Salpharm Swaziland
(378/2017) [2017] SZHC 31 (28th February, 2018)
Coram: M. Dlamini J.
Heard: 23rd February, 2018
Delivered: 28th February, 2018
Summary: A summary judgment application serves before me for payment of the sum of E100,000 together with legal interest and costs of suit. The causa is an oral loan agreement. 1st respondent’s alleged bona-fide defence is that the principal loan was made to 2nd respondent and not 1st respondent.
[1] The Parties
By reason that this is a summary judgment application emanating from simple summons, I shall refer to the parties as plaintiff and defendants instead of applicants and respondents.
[2] The plaintiff described herself as “an adult Swazi female of Piggs’ Peak under the district of Hhohho”. The 1st defendant is said to be “an adult businessman of Ezulwini under the district of Hhohho while the 2nd defendant, “a company duly registered in terms of the company laws of the Kingdom of Swaziland having its principal place of business in the of Hhohho”.[1]
[3] I must point out that during the hearing, Counsel on behalf of defendants pointed out that the plaintiff is also one of the directors of 2nd defendant. It is common cause that 2nd defendant is at present in financial distress as it was during the time of the loan advancement.
[4] The pleadings
The Plaintiff
In her declaration, the plaintiff articulated:
“3
On or about the 30th April 2013, pursuant to the oral agreement, the plaintiff advanced a loan of E90,000.00 (ninety thousand emalangeni) to the 1st Defendant at his special request and instance.
4
The plaintiff duly drew a cheque of E90,000.00 (ninety thousand emalangeni) in favour of the 2nd defendant and [sic] instance and request of the 1st defendant who is a director to the 2nd defendant. A copy of the cheque is annexed herein marked “HLZ1”.
5
It was the material terms of the agreement that the 1st defendant shall make monthly payment of E2,422.97 (two thousand four hundred and twenty two emalangeni, ninety seven cents). For ease of reference annexed hereto are email communications between the Plaintiff and the 1st defendant marked “HLZ2”
6
It was further agreed that the 1st defendant shall pay all interest incurred as a result of the loan advanced to him.
7
The 1st defendant acknowledges receipt of the amount advanced, however, he only made one installment towards liquidating the debt in favour of the plaintiff. A copy of the proof of payment is annexed herein marked “HLZ3” and the communication confirming the payment of his installment marked “HLZ4”.”
[5] The defendant
The defendant resisted as follows:
“3
“I deny that I do not have a bona fide defence to the plaintiff’s claim.
4
I wish to bring it to the attention of the Court that the plaintiff and myself were the directors and shareholders of the 2nd defendant at the time the plaintiff made the cheque to the 2nd defendant.
5
I also wish to further disclose that the plaintiff and myself were in love relationship at the time material to the cheque being issued to the 2nd defendant. However, we have since ended our relationship. This seems to be the reason why the plaintiff is now pursuing this matter against me in my personal capacity.
6
I wish to state that the loan was for the benefit of the 2nd Respondent, not me in my personal capacity. I therefore deny that the loan was granted to me personally.
8.
I deny that I undertook to pay the money in my personal capacity. The agreement or undertaking to pay was made for and on behalf of the 2nd Defendant.”
[6] It is also pleaded:
“9.2
There was no agreement or discussion regarding interest. The plaintiff should have disclosed the interest rate agreed upon, had there been such an agreement.
12
I wish to submit that the 2nd defendant went into financial difficulties and as such it could not pay the remainder of the loan. The plaintiff is aware that the company became technically insolvent and it could no longer pay its debts which eventually lead [sic] to a motor vehicle which was used by the plaintiff being returned to Wesbank because the company could not afford it anymore.
Counter claim
I also wish to state that the 2nd defendant will file a counter claim against the plaintiff for the sum of E280,000.00 in respect of a motor vehicle which was bought by the 2nd defendant a VW Golf 6 registered DSD000BH. This claim is in respect of the repayment of the loan obtained from Wesbank, and insurance premiums paid in respect of the motor vehicle.”
[7] Issue
The enquiry on whether the defendants have raised a bona-fide defence justifying refusal to grant the summary judgment applicant thereby referring the matter to trial or to take its normal cause, is intertwined with the question whether referring the matter to trial will disturb the preponderance of probabilities in this case.[2]
[8] Adjudication
Principle of law
Corbett JA espoused:
“It is correct that, where in proceedings on notice of motion disputes of fact have arisen on the affidavits, a final order, whether it be an interdict or some other form of relief, may be granted if those facts averred in the applicant’s affidavits which have been admitted by the respondent, together with the facts alleged by the respondent, justify such an order. The power to give such a final relief on the papers before it is, however, not confined to such a situation. In certain instances the denial by respondent of a fact alleged by the applicant may not be such as to raise a real, genuine or bona fide dispute of fact”
[9] Learned judge continued with eloquence:
“Moreover, there may be exceptions to this general rule, as, for example, where the allegations or denials of the respondent are so far-fetched or clearly untenable that the Court is justified in rejecting them merely on the papers”.
[10] The case at hand
As can be gleaned from the plaintiff’s declaration,[3] her case is that on or about 30th April 2013, having concluded an oral agreement for a loan, she advanced the 1st defendant a sum of E90,000. This amount was however, for the benefit of 2nd defendant as the cheque was drawn in its favour.
[11] The 1st defendant however disputes this assertion. He contends that at all materials times, the loan was made by the 2nd defendant. He represented the 2nd defendant which is a company. He did not solicit the loan from plaintiff. This finds support from plaintiff’s annexure marked “HLZ 1”, as per 1st defendant defence.
[12] Plaintiff insists that the loan was advanced at the request and instance of the 1st defendant. Plaintiff attached annexure “HLZ2” in counter to the defence by defendant.
Annexure “HLZ2” reads:
“From: S. Solomon Sonto [mailto:
Sent: 28 January 2014 01:48pm
To : Zwane, Hlelekile
Subject: Re LOAN REPAYMENT
Reference is made to your mail.
I request to make the monthly installment of E2422.97 into your account on or before your monthly pay day, kindly indicate your account number.
Further I propose to clear the principal loan with the bank when I stabilize financially.
Should you have any objections or rejection to my proposed loan repayment please do not hesitate to contact myself.
Regards
For and on behalf of:-
S. Solomon Sonto, HPS & Family”
[13] From the email quoted herein, it is clear that the author is 1st defendant and not 2nd defendant. This is evident from both the heading which indicates the author (From: S. Solomon Sonto) and the end which also indicates the author; (Regards: for and on behalf o S. Solomon Sonto, HPS and Faminly). Had the loan been advanced to 2nd defendant or said differently, should the oral agreement for the loan of the sum claimed had been between the plaintiff and 2nd defendant, 1st defendant as the director would have clearly indicated that the author was 2nd defendant and not 1st defendant. He would also have ended by stating, ‘regards Solpharm Swaziland’ instead of “for and on behalf of S. Solomon Sonto, HPS & Family”.
[14] The above is not the only evidence demonstrating that the loan was advanced at the instance of the 1st defendant. Annexure HLZ2 reads further:
“From: S. Solomon Sonto [mailto:
Sent: 28 January 2014 01:48pm
To : Zwane, Hlelekile
Subject: Re LOAN REPAYMENT
Mail received, please indicate monthly loan repayment amount.
Regards
For and on behalf of:-
S. Solomon Sonto, HPS & Family”
[15] Again, had the loan been at the behest of 2nd defendant, the quoted email would have indicated that the enquiry on the amount of monthly instalments would be made by Salpharm Swaziland and not S. Solomon Sonto as reflected above.
[16] There is further evidence of first payment reflected in annexure “HLZ4. It reads:
“From: S. Solomon Sonto [mailto:
Sent: 28 January 2014 01:48pm
To : Zwane, Hlelekile
Subject: Re LOAN FIRST REPAYMENT
Per arrangement find attached
Regards
For and on behalf of:-
S. Solomon Sonto, HPS & Family”
[17] Obviously, the above emails authored by or at the behest of 1st defendant lend credence to plaintiff’s assertion that the oral agreement to advance a loan of E90,000.00 was concluded with 1st defendant for the benefit of 2nd defendant.
[18] The defence raised by 1st defendant that evidence of the parties’ agreement on the loan is found on the face of the cheque which is drawn in favour of 2nd defendant cannot stand in light of the number of emails authored by 1st defendant which indicate that the loan was at the instance of the 1st defendant. To clear any doubt on the above, the first email of 28th January 2014 referred above was on 30th January 2014 followed by another email which reads:
“From: S. Solomon Sonto [mailto:
Sent: 30 January 2014 08:33am
To : Zwane, Hlelekile
Subject: Re LOAN REPAYMENT
I confirm receipt of your email.
Thank you for accepting my proposal.
Regards
For and on behalf of:-
S. Solomon Sonto, HPS & Family”
[19] Clearly, once 1st defendant proposed on how to settle the principal debt, and as can be gleaned from the email of 30 January 2014, that proposal (i.e. terms of settlement) was accepted, 1st defendant then thanked plaintiff for accepting the terms of discharging the loan. In brief, the loan was agreed between plaintiff and 1st defendant as proposed by 1st defendant. This is further evidence that the 1st defendant is the debtor and not the 2nd defendant who does not feature in the negotiations of the terms and payment of the first instalment.
[20] The next question flowing from the above analysis is whether referring the matter to trial in the light of the above evidence shall disturb the preponderance of the probabilities. Mr. Manzini on behalf of 1st defendant eloquently argued that the court must consider that 1st defendant was during the time of writing the emails highlighted above a lay person who would not differentiate between himself and the company (2nd defendant). He urged the court to refer the matter to trial in order to clearly canvass this point.
[21] Unfortunately, the point raised by learned counsel calls upon this court to take into consideration the subjective intent of the parties which unfortunately is not manifested outward by their conduct. The wise words of Chief Justice Brian are apposite herein; “[T]he intent of a man cannot be tried, for the devil himself knows not the intent of a man”[4] In the analysis, referring the matter to trial shall not interfere with the preponderance of probabilities which is in favour of plaintiff.
[22] The next ground of defence raised by defendants is that there were no terms agreed upon on interest. Defendants support this defence by pointing out that the plaintiff herself has failed to state the terms of interest. On this assertion, the plaintiff replied:
“Ad paragraph 9
The contents of this paragraph are disputed. The 1st defendant will recall that we agreed that I will charge him the interest chargeable by the bank not that the interest was for my benefit. For the courts confidence, it is clear that the 1st defendant is not disputing the claim per se. One would contemplate that, if at least he undertake [sic] to refund me at least the money that he acknowledge more so because the evidence is clear that the loan exists and that he had already started to pay installments. That is why I insist that there is no bona fide defence. Instead I am suffering irreparable harm and prejudice because I sourced the money from the bank hoping that he will repay me as agreed. Each month there is a debit order siphoning my money while yet the 1st defendant is deliberately refusing to pay back my money.”
[23] It is correct that the plaintiff’s declaration fails to state the terms of interest, that is, how interest is to be computed or its rate. It is only in its reply does she state that the interest charged was as per the bank’s rate. It was further revealed for the first time under reply that plaintiff had sourced the sum by E90,000.00 from the bank herself. This meant that the defendants could not answer to such averments. It is therefore difficult for the court to decide whether there was an agreement to pay interest. This is fortified by the email at annexure HLZ2 where 1st defendant undertakes to liquidate the balance of the principal loan as soon as he becomes financially stable. On the other hand it is economically unsound for someone to advance an amount of such significance (E90,000.00) without interest. As the probabilities are now at equilibrium in regard to the question of interest, the only remedy is to refer the matter on the question of whether the loan agreement was subject to interest payment and if yes, how interest was to be computed.
[24] The third defence by defendants is that the 2nd defendant has a counterclaim against the plaintiff. It is not clear whether the sum of E280,000.00 to be the subject of the counter-claim is liquid or illiquid. However, the question for determination does not turn on the nature of the counter-claim.
[25] Firstly, no counter-claim accompanied the 2nd defendant’s plea. This alone is a justified reason by this court to reject the defence of a counter-claim. The principle of our law that a counter-claim must accompany a plea is well established. [5]
[26] Secondly and foremost herein I have found that the loan agreement was between the plaintiff and 1st defendant. It was not between plaintiff and 2nd defendant. 2nd defendant was however correctly cited because the cheque was drawn in its favour. In brief, as the legal principles favouring counter-claim is to the effect that the parties must be the same, the 2nd defendant who intends to file a counter-claim was not a party to the loan agreement between plaintiff, the counter-claim defence is unmeritorious. Such defence stands not to be considered.
[27] Costs
It is true that that generally the succeeding party is entitled to costs. In the case at hand, the plaintiff has partly succeeded. The matter is referred to oral evidence only for determination of interest as pointed out at paragraph 23 above. For this reason plaintiff cannot be entitled to full costs of litigation. I shall order a portion of the costs.
[28] In the final analysis, I enter the following orders:
1. Summary judgment application partly succeeds.
2. The 1st defendant is ordered to pay plaintiff;
2.1 The sum of E90,000.00 less E2,500.00
2.2 Interest thereon at the rate of 9% per annum a temporae morae.
2.3 ¾ of cost of suit.
3. The matter is referred to oral evidence on interest in terms of paragraph 23 of this judgment.
Plaintiff : Mr. K. Q. Magagula
Defendant: Mr. N. Manzini
[1] (see page 1 of book of pleadings)
[2] (Plascen-Evans Paints V Riebelck Paints (Pty) Ltd 1984
[4] Sambou-Nasionale Bouvereniging v Friedman 1979(3) SA 994)
[5] (see Siboniso Clement Dlamini v Walter P. Bennet and Others).
(45/2015) [2015] SZHC 21 (02 June 2017)
