South African Securitisation Programme (RF) Limited and Others v WBT Auto Wholesalers and Others

The plaintiffs sought summary judgment against the second and third defendants based on guarantees for two photocopier rental agreements. Claim A arose from a rental agreement between the third plaintiff (Sunlyn) and the first defendant (WBT), with the second defendant (Ms Angel) bound as guarantor. Claim B arose from another rental agreement between WBT and Corprint CC, with both defendants allegedly bound as guarantors. WBT was provisionally wound up on 14 May 2021 and finally liquidated on 24 June 2021. The plaintiffs claimed arrear rentals and future rentals under both agreements. The defendants admitted the arrear rental portions but disputed liability for future rentals, arguing that: (a) the rental agreements had been terminated by the provisional liquidator before action was instituted on 2 February 2022; (b) the future rental claims constituted unreasonable penalties under the Conventional Penalties Act; and (c) the plaintiffs had repossessed the photocopiers upon termination. The defendants also denied signing the guarantee underlying Claim B.

• Whether the defendants have a bona fide defence to the plaintiffs' claims for arrear rental under the guarantees.
• Whether the future rental claims can be pursued as specific performance when the rental agreements were allegedly terminated by the provisional liquidator before action was instituted.
• Whether the future rental claims constitute unreasonable penalty stipulations under the Conventional Penalties Act 15 of 1962.
• Whether the plaintiffs' alleged repossession of the photocopier machines affects their entitlement to full future rentals.
• Whether summary judgment is appropriate where defences are genuinely raised but their prospects of success are not yet determined.
• Whether costs should be awarded on an attorney-client scale as provided in the underlying agreements.

1. Summary judgment was granted against the second defendant for payment of R15,909.24 plus interest at 9% p.a. from 19 August 2021, with costs on an attorney-client scale on the Magistrates Court tariff. 2. Summary judgment was granted against the second and third defendants jointly and severally for payment of R31,941.26 plus interest at 9% p.a. from 19 August 2021, with costs on an attorney-client scale on the Magistrates Court tariff. 3. Summary judgment was otherwise refused and the second and third defendants were granted leave to defend. 4. Costs of the summary judgment application were ordered to stand over for determination at trial.

Summary judgment will be granted where the defendant's liability is undisputed and no bona fide defence has been disclosed. However, summary judgment must be refused where a defendant has genuinely raised defences that, if proved at trial, would constitute a valid defence to the plaintiff's claim, and the court is not required to determine the substantive merits or prospects of success of such defences at the summary judgment stage. A court should exercise its discretion against granting summary judgment where there is a reasonable possibility that an injustice may be done.

The court noted that in Tumileng Trading CC v National Security and Fire (Pty) Ltd, it was held that the requirement for a plaintiff to engage with the content of the plea in summary judgment applications is likely to be futile in all cases other than those where the pleaded defence is a bald denial, because a court seized of a summary judgment application is not charged with determining the substantive merit of a defence, nor with determining its prospects of success.

This case reaffirms the principles governing summary judgment applications in South African civil procedure, particularly that a court should not determine the substantive merits of a defence at summary judgment stage. It also illustrates the intersection of contract law, guarantees, insolvency law, and the Conventional Penalties Act in the context of claims for future rentals following termination of agreements.