ABL Nominees P/L v Warmings Commercial Services P/L
[2015] SASC 203
•23 December 2015
SUPREME COURT OF SOUTH AUSTRALIA
(Civil: Application)
ABL NOMINEES P/L v WARMINGS COMMERCIAL SERVICES P/L & ORS
[2015] SASC 203
Judgment of The Honourable Justice Bampton
23 December 2015
PROCEDURE - SUPREME COURT PROCEDURE - SOUTH AUSTRALIA - PROCEDURE UNDER RULES OF COURT - SUMMARY JUDGMENT
GUARANTEE AND INDEMNITY - ACTIONS AGAINST SURETY - GENERALLY
The plaintiff makes application for summary judgment against the fourth defendant in respect of a loan deed entered into by the first and second defendant in 2007 (the second loan) – fourth defendant signed the loan deed as both a Director of the first defendant and as guarantor – second defendant assigned the second loan to the plaintiff – first defendant has affirmed the loan – first defendant in breach of its obligations to make repayments – plaintiff demanded payment from the fourth defendant – no repayments made since November 2008
Where no defence has been filed – where no affidavit sworn in answer to the application for summary judgment – whether any basis for defending the plaintiff’s claim.
Held:
1. There is no reasonable basis for defending the plaintiff’s claim.
2. Summary judgment for the plaintiff against the fourth defendant in respect of the second loan.
Supreme Court Civil Rules 2006 (SA) r 232, r 233, referred to.
Ceneavenue Pty Ltd v Martin [2008] SASC 158; Ke Qin Ren v Hong Jiang (2014) ACSR 149; Law of Guarantees Geraldine Andrews QC and Richard Millett QC (Thomson Reuters, 6th ed, 2011), considered.
ABL NOMINEES P/L v WARMINGS COMMERCIAL SERVICES P/L & ORS
[2015] SASC 203Civil: Application
BAMPTON J: ABL Nominees Pty Ltd (ABL) by interlocutory application, FDN 61, seeks summary judgment against the fourth defendant, Mrs Warming, in respect of a loan (the second loan) pleaded at [25]–[49] of the Statement of Claim, filed 4 April 2011. The order for summary judgment is sought pursuant to r 232 of the Supreme Court (Civil) Rules 2006 (SA) in the following terms:
1.On the basis of the facts set out in the second affidavit of Stephen James Flamer-Smith, sworn 15 July 2015 (Mr Flamer-Smith’s affidavit);
2.That judgment be awarded in the sum of $1,376,865.87 in addition to costs on an indemnity basis to be agreed or taxed.
The application for summary judgment is for part of one of the plaintiff’s claims against one of the defendants. Rule 233 permits the Court in its discretion to give summary judgment on a particular issue without disposing of the claim as a whole.
The solicitor who appeared for Mrs Warming on the hearing of FDN 61 stated he had received no instructions to file any responding affidavits to the application. He said he appeared “more as a friend of the court” and that he was not instructed to consent to the application or make submissions other than to ask that the application be considered on its merits by reference to the documents before the Court.
In addition to Mr Flamer-Smith’s affidavit, ABL relied on the affidavits of Belinda Heather Thompson, sworn 6 December 2012 (Ms Thompson’s affidavit), and Gerald Chung Yii Kok, sworn 10 December 2012 (Mr Kok’s affidavit), in support of FDN 61.
Background
In March 2004 the first defendant, Warmings Commercial Services Pty Ltd as Trustee for Warmings Consulting Services Trust (Warmings) applied for term finance for its investment in the Great Southern Plantations 2003 Project.
On 11 April 2004 Warmings and the second defendant, Great Southern Finance Pty Ltd in liquidation (GSF) executed a loan deed (the first loan deed). The third defendant, Mr Warming, and Mrs Warming executed the first loan deed as guarantors.
On 1 July 2004 GSF loaned Warmings the sum of $804,454.00 (the first loan) pursuant to the first loan deed.
On 1 January 2008 GSF assigned all of its rights under the first loan deed to ABL.
The second loan
On 16 March 2007 Warmings by its Director, Mrs Warming, signed an Application for Term Finance (the second loan application) with GSF to borrow money to acquire an interest in the Great Southern 2007 Wine Grape Income Project Managed Investment Scheme.
In his affidavit Mr Flamer-Smith deposes that he is a Manager, Legal and Resolutions employed by Bendigo and Adelaide Bank Ltd (BABL) and that ABL is a wholly owned subsidiary of BABL. Mr Flamer-Smith’s affidavit is set out under the following headings:
·Section 1: Entry into loan contract and guarantee;
·Section 2 : Breach of loan contract and guarantee;
·Section 3: Assignment of loan contract;
·Section 4: Group proceedings; and
·Section 5: Sources of information.
Exhibit SFS11 is a copy of the documents referred to in Mr Flamer-Smith’s affidavit separated by dividers. Mr Flamer-Smith explains that the documents are in chronological order and in section five he deposes to knowing the facts deposed to in his affidavit from his own knowledge, except as set out at [39]‑[56], which he knows from the sources of information provided to him in his position with BABL.
A copy of the second loan application is exhibited to Mr Flamer-Smith’s affidavit.[1] Mrs Warming signed the second loan application as guarantor and agreed to guarantee the payment of the second loan and the performance by Warmings of all its obligations under the second loan deed.[2]
[1] See divider 1, Exhibit SFS11 to Mr Flamer-Smith’s affidavit.
[2] By reference to page 22, divider 1, Exhibit SFS11 to Mr Flamer-Smith’s affidavit.
Essential features of the second loan application
The second loan application seeks finance in the amount of $760,477 to finance 193 Vinelots. Warmings selected GSF as lender and a loan term of seven years.[3]
[3] Page 16, divider 1, Exhibit SFS11 to Mr Flamer-Smith’s affidavit.
In section two ‘Personal Details’ the applicant is asked to delete as applicable either of BORROWER/GUARANTOR. Whilst neither option was deleted, I am satisfied Mrs Warming signed the application on behalf of the borrower and as guarantor. The company named as the borrower in section three is Warmings Commercial Services Pty Ltd.
The application granted GSF and each director, company secretary and attorney of GSF, jointly and severally, a power of attorney to execute formal deeds on behalf of Warmings and Mrs Warming upon the granting of the finance.[4]
[4] Page 21, divider 1, Exhibit SFS11 to Mr Flamer-Smith’s affidavit.
A copy of the terms of the formal deed, excluding the schedule to the loan deed to be executed subsequently, was attached to the second loan application.[5]
[5] Page 23, divider 1, Exhibit SFS11 to Mr Flamer-Smith’s affidavit.
Under the heading ‘Checklist for Applicants’ the application stipulated that the directors of corporate applicants were required to provide a personal guarantee and that the declaration at the end of the application must be signed and dated by all applicants and guarantors.[6]
[6] Page 15, divider 1, Exhibit SFS11 to Mr Flamer-Smith’s affidavit.
On 16 March 2007, Warmings by its sole Director and Secretary Mrs Warming also signed:
·an application in Warmings’ name to invest in the Great Southern 2007 Wine Grape Income Project; and
·a direct debit request form authorising the deduction of instalment repayments to pay GSF for the second loan from an account in the name of Warmings.
A copy of a letter dated 28 March 2007 whereby Mrs Warming, before the loan deed was prepared, sent a letter to GSF requesting that the term of the loan be extended from 7 to 10 years was exhibited to Mr Flamer-Smith’s affidavit.[7] This request was agreed to and was reflected in the second loan deed.
[7] See divider 4, Exhibit SFS11 to Mr Flamer-Smith’s affidavit.
As envisaged by the second loan application, GSF prepared a formal loan deed (the second loan deed) and guarantee. At [9] of Mr Flamer-Smith’s affidavit he deposes that the second loan deed is dated 15 June 2007. After I reserved my decision in this matter my associate noted that the copy of the second loan deed exhibited to Mr Flamer-Smith’s affidavit as Exhibit SFS11 is dated 23 December 2008. I made an order in Chambers in the absence of the parties that the plaintiff file and serve an affidavit to explain this discrepancy. In accordance with my order a further affidavit of Mr Flamer-Smith, sworn 11 December 2015 (FDN 62) was filed. In this affidavit Mr Flamer-Smith deposes that the date 15 June 2007 referred to at [9] of his affidavit sworn 15 July 2015 is not correct.
Mr Flamer-Smith refers to exhibit SFS11 and says it appears to have been executed on 23 December 2008 as alleged in [27] of the Statement of Claim. Mr Flamer-Smith believes that the date 15 June 2007 was the date the loan monies were advanced as noted in item 6 of the Schedule to the second loan deed. Mr Flamer-Smith deposes that although the second loan deed was not prepared until December 2008 its terms were consistent with the second loan application as varied by the letter from Mrs Warming dated 28 March 2007.
Mr Flamer-Smith also refers in his affidavit sworn 11 December 2015 to the account statement behind divider 9 of Exhibit SFS11 and, in particular, to page 51 which records the advance of $760,477 on 15 June 2007. I am satisfied that the second loan monies were advanced on 15 June 2007.
The second loan deed and guarantee, which was assigned the loan account number ES00012393, obliged:
·Warmings to make repayments of the loan by instalments commencing on 31 January 2007 and on the last business day of each month for the term of the loan which was extended to 10 years in accordance with the request from Mrs Warming;[8]
·Warmings to pay interest on the balance owing from time to time at the rate of 10% per annum.[9]
[8] Pursuant to Schedule 1, item 7. I note that as the loan monies were not advanced until 15 June 2007 the first direct debit in payment of instalments due on the loan was made from 31 July 2007.
[9] Pursuant to Schedule 1, item 9.
If Warmings breached the loan agreement:
·the lender was entitled to demand immediate payment of the balance then owing;[10]
·the lender became entitled to charge interest at the rate of 13% on any overdue amounts calculated daily, compounding monthly;[11]
·Warmings was obliged to pay any legal costs of enforcement of the loan deed incurred by the lender on a full indemnity basis;[12] and
·Mrs Warming, as guarantor, was obliged to pay on demand any amount due under the loan agreement.[13]
[10] Pursuant to Clauses 13 and 14.1.
[11] Pursuant to Clause 5.1(b) and Schedule 1, item 9(b).
[12] Pursuant to Clause 7(c).
[13] Pursuant to Clause 18.2.
The second loan deed was executed by GSF as lender and on behalf of Warmings and Mrs Warming pursuant to the power of attorney referred to above.
Breach of the second loan deed and guarantee
Mr Flamer-Smith deposes that, by reference to a Bendigo Bank statement for the second loan account,[14] direct debits in payment of instalments due on the loan were made from 31 July 2007 to 30 November 2008. He deposes that no further payments have been made. An updated account statement which was tendered by counsel for ABL appears to confirm no payment has been made since 30 November 2008.
[14] See divider 9, Exhibit SFS 11 to Mr Flamer-Smith’s affidavit.
On 20 October 2009 BABL, as servicer of the second loan on behalf of ABL, demanded from Warmings repayment of the full amount then due under the loan agreement.
On 3 September 2010 BABL, as servicer of the second loan on behalf of ABL, wrote to Mrs Warming advising that the borrower had defaulted on the terms of its loan and that demand had been made for payment.[15] BABL demanded repayment of the full amount of the loan from Mrs Warming as guarantor of the second loan within 21 days.
[15] See divider 8, Exhibit SFS11 to Mr Flamer-Smith’s affidavit.
On 5 August 2014 orders were made by this Court winding up Warmings. By reference to an ASIC search report dated 14 July 2015, Warmings is in liquidation.[16]
[16] See divider 11, Exhibit SFS11 to Mr Flamer-Smith’s affidavit.
Mr Flamer-Smith deposes that Mrs Warming has failed to comply with the notice of demand and that as at 1 July 2015 the balance of the second loan excluding legal costs was $1,376,865.87.
Assignment of loan contract
Mr Flamer-Smith deposes that the purpose of finance sought by Warmings, as appears from the second loan application and investment application, was for investment in a wine grape scheme to be managed by Great Southern Managers Australia Ltd (GSMAL). GSF and GSMAL were part of a group of companies known as the Great Southern Group, the business of which was the promotion and management of managed investment schemes.
ABL was part of the group of companies known as the Adelaide Bank Group. The holding company of the Adelaide Bank Group was Adelaide Bank Limited.
From about 2004 the Great Southern Group and the Adelaide Bank Group made arrangements whereby companies in the Adelaide Bank Group would provide funding for loans to applicant investors in managed investment schemes promoted by the Great Southern Group.
The arrangements between Great Southern Group and Adelaide Bank Group included legal structures which permitted GSF to assign loans that it had made as lender to companies in the Adelaide Bank Group. Pursuant to these arrangements the first and second loans were assigned from GSF to ABL. The arrangements also permitted companies within the Adelaide Bank Group to assign loans amongst themselves from time to time.
Mr Flamer-Smith refers to Mr Kok’s affidavit filed in this matter in relation to a summary judgment application with respect to the first loan which did not proceed. Mr Kok deposes that he was at the time of swearing the affidavit employed by BABL as an analyst in BABL’s Balance Sheet Management Group and that from November 2007 until January 2010 he was a manager with the Program Management Group. During his time with the Program Management Group Mr Kok said that he was involved in the provision of finance to investors in the Great Southern managed investment scheme. He was also involved in effecting payment of the purchase price for the assignment of loans by GSF to BABL.
Mr Kok deposes to the assignment to ABL of a tranche of loans referred to as ‘NCL Tranche 1’ which include the first loan.
Mr Flamer-Smith refers to [16] of exhibit GCYK1 to Mr Kok’s affidavit. Exhibit GCYK1 includes a revised settlement report, redacted to exclude confidential information irrelevant to this matter, setting out the loans assigned in “NCL tranche 1”. Mr Kok deposes that the revised settlement report includes reference to the loans to Warmings.[17] Mr Flamer-Smith says that the second loan being loan account number ES00012393 was also assigned in NCL tranche 1 and reference to it appears on page 6 of Exhibit GCYK1.
[17] Para [16] of Mr Kok’s affidavit.
Warmings was informed of the assignment of the second loan from GSF by letter from BABL as servicer of the second loan on behalf of ABL dated 30 April 2009.[18] The letter from BABL to Warmings states that “as of 30 April 2009 the management of your investment loan will transfer to Bendigo and Adelaide Bank Ltd”.[19] ABL’s counsel pointed out in oral submissions that this letter is wrong and that the loan had in fact been assigned to ABL not its parent company BABL. It was submitted that even if this was not an effective notice of assignment it would still leave the plaintiff with an equitable assignment of the loan and nevertheless be entitled to obtain summary judgment.[20]
[18] See divider 6, Exhibit SFS11 to Mr Flamer-Smith’s affidavit.
[19] Divider 6, Exhibit SFS11 to Mr Flamer-Smith’s affidavit; Exhibit GCYK 9 to Mr Kok’s affidavit.
[20] T 23.
Mrs Warming was informed of the assignment of the second loan from GSF to a company in the Bendigo and Adelaide Bank Group by letter from BABL as servicer of the loan on behalf of ABL dated 3 September 2010.[21]
[21] See divider 8, Exhibit SFS11 to Mr Flamer-Smith’s affidavit.
Group proceedings
Mr Flamer-Smith deposes that Warmings is within the class of plaintiffs in action number SC1 2011 04916 in the Supreme Court of Victoria (the group proceedings).[22]
[22] Para [27] of Mr Flamer-Smith’s affidavit.
Ms Thompson deposes that she was at the time of swearing the Thompson affidavit a partner of Allens, solicitors for ABL in the group proceedings.
Ms Thompson deposes that she has the conduct and control of the group proceedings on behalf of ABL, which is named as a defendant in those proceedings. Ms Thompson states that:[23]
[23] Para [6] of Ms Thompson’s affidavit.
The 2007 Wine Grape Group Proceeding has been commenced by Samantha Barbara Murray on behalf of, relevantly, all persons who:
(a)at any time during the period between:
...
(ii) 16 June 2006 and 15 June 2007 inclusive acquired and/or held an interest in the 2007 Wine Grape Scheme;
(b)Entered into a lease and management agreement with Great Southern Managers Australia Limited (GSMAL) for vinelots in the 2006 Wine Grape Scheme and/or the 2007 Wine Grape Scheme;
(c)Either:
(i) Entered into a loan with Great Southern Finance Pty Ltd (GSF) (i.e. a GSF Loan) to fund payment of application fees in respect of the 2006 Wine Grape Scheme and/or the 2007 Wine Grape Scheme (non self-funding Group Members); or
(ii) Paid the application fees in respect of the 2006 Wine Grape Scheme and/or the 2007 Wine Grape Scheme with cash (or equivalent) (self-funding Group Members).
Ms Thompson deposes to Warmings being a member of the plaintiff group in the group proceedings before the Supreme Court of Victoria having not opted out by 27 April 2012, being the final date that group members could opt out.
Mr Flamer-Smith deposes that the plaintiffs in the group proceedings and ABL, with other parties, entered into a Deed of Settlement (the settlement deed) that resolved the group proceedings and other proceedings.
On 11 December 2014 Croft J made orders pursuant to s 33V of the Supreme Court Act 1986 (Vic) approving the settlement deed. Upon the making of those orders the settlement deed became binding upon Warmings as follows:
1.Settlement of the Group Proceedings in the terms contained in the deed of settlement executed by the parties on 23 July 2014 and exhibited and marked “SGW-1” to the affidavit of Stuart Graeme Walter sworn on 15 August 2014 (“deed of settlement”) is approved pursuant to section 33V(1) of the Supreme Court Act 1986).
2.The plaintiffs in the Group Proceedings have the authority of the “Group Members” (as that term is defined in each of the Group Proceedings), nunc pro trunk, to enter into and give effect to the deed of settlement and the transactions contemplated thereby for and on behalf of the Group Members.
3.No order as to costs
The settlement deed,[24] dated 22 May 2014, provides at 4.1.4 that:
The Lead Plaintiffs for and on behalf of themselves and all Group Members acknowledge and admit the validity and enforceability of the Lead Plaintiffs’ Loan Deeds and the Group Members’ Loan Deeds.
[24] Exhibit SFS12 to Flamer-Smith’s affidavit.
“Group Members” is defined in section 1 as meaning:
each person or entity falling within the definition of a group member in any one or more of the Group Proceedings and who has not opted out of the Group Proceeding.
“Loan Deeds” is defined as meaning:
the Loan Agreements the subject of the Group Proceedings and the M+K Counterclaim Proceedings entered into between:
a)the Lead Plaintiffs, Group Members or M+K Counterclaim Claimants and GSF, which were subsequently assigned by GSF to one or more of the BEN Parties or Javelin; or
b)the Lead Plaintiffs, Group Members or M+K Counterclaim Claimants and ABL Nominees Pty Ltd, which were subsequently assigned by ABL Nominees to one or more of the BEN Parties.
Schedule 2 to the settlement deed establishes that ABL is a member of the BEN Parties.
The material terms of the settlement deed are:
1.Warmings admit the validity and enforceability of the second loan deed;
2.the second loan deed is valid and enforceable as Warmings did not opt out of the group proceedings; and
3.Warmings is not able to pursue any claims or defences in respect of the second loan deed.
On 11 December 2014, in addition to making the aforementioned orders, Croft J published reasons for the approval of the settlement deed and published as an annexure to those reasons a full set of reasons for decision in the underlying substantive proceedings which in summary found:
1.against the plaintiffs in those proceedings (of which Warmings is one); and
2.in favour of the bank parties (of which ABL is one).
Accordingly, ABL contends Warmings and Mrs Warming have no defence in respect of the second loan.
Summary judgment is only sought against Mrs Warming in relation to the second loan because ABL contends that it already has a binding determination against Warmings arising out of the group proceedings in the Supreme Court of Victoria.
ABL submitted that as Mr Warming is not a party to the second loan summary judgment is not sought against him.
Defence
The Defence filed by the defendants did not plead a defence to the allegations made in the Statement of Claim with respect to the second loan. Accordingly ABL seeks summary judgment only on the second loan.
The defendants filed their Defence on 17 May 2011. On ABL’s application that Defence was struck out on 14 November 2011 and the defendants’ application to file a Second Defence was refused. The defendants made application to file a further Defence. The matter was then transferred from the District Court to the Supreme Court.
Judge Burley heard the application for leave to file the proposed Third Defence and granted the application. The defendants did not comply with the orders for the filing of the Third Defence.
A Defence and Cross Action was filed on 16 September 2013 but did not plead a defence to the second loan. Paragraph [25] reads:
The defendants do not plead to paragraphs 25 to 49 on the grounds that the further prosecution of these proceedings with respect to those paragraphs of the claim is stayed by order of Judge Burley, made on 7 February 2013.
There is no order for a stay made by Judge Burley on that date or on any other date.
On 25 June 2015, I ordered that the plaintiff was to file any application for summary judgment on or before 16 July 2015. The defendant was ordered to file any affidavit in response within 21 days of the application. No responding affidavit was filed.
Submissions of the plaintiff
ABL submitted that the principle governing an application for summary judgment was stated in Ceneavenue Pty Ltd v Martin.[25] Summary judgment should only be granted where there is no reasonable basis for defending the claim. As Debelle J (with whom Duggan and Anderson JJ agreed) said:[26]
The onus of satisfying the court that the application should be granted lies on the applicant. When considering whether that onus has been discharged, the court will look to the cogency of the defence as raised by the defendant: Leasefin Corporation Ltd v Clarke (Full Court, judgment no S3664, unreported, 16 October 1992). All of that is conveyed by the expression “no real question to be tried”.
[25] [2008] SASC 158 at [78].
[26] Ceneavenue Pty Ltd v Martin [2008] SASC 158 at [78].
The Court must satisfy itself that there is no underlying defence having regard to the pleadings and the affidavits on file. There is no onus on Mrs Warming to put forward evidence on any issue but the onus is on ABL to satisfy the Court on each issue.
ABL submitted it has put forward all the evidence that establishes the claim and can do no more to satisfy the Court that Warmings and Mrs Warming have no defence other than point out that no defence to its claim with respect to the second loan has been put forward.
ABL submitted that the co-extensive nature of the liability of the principal debtor and guarantor is such that where the principal debtor is found to be bound by the contract the guarantor cannot then mount a case that the principal loan contract is voidable. ABL’s counsel conceded that there was no authority to that effect and referred to the following extract from the Law of Guarantees regarding a surety’s liability:[27]
the better view is that once the principal has elected to affirm to contract, or has waived the right to rescind, the surety is not able to escape liability to the creditor on the grounds of the initial voidability of the principal contract.
[27] Geraldine Andrews QC and Richard Millett QC, Law of Guarantees (Thomson Reuters, 6th ed, 2011) at [6-024].
Submissions of the fourth defendant
The solicitor for Mrs Warming submitted that the application was pre‑emptive and that if Mrs Warming is liable then the same would apply to Mr Warming. He stated that because the application for summary judgment is only against the fourth defendant, if granted, it would leave a defendable action on foot solely in relation to Mr Warming. He submitted that I am being asked to make a decision against Mrs Warming without having reviewed any defence or trial material from Mr Warming. It was submitted I should permit the matter to proceed to trial as against Mr and Mrs Warming.
It was also submitted that the parties have come to an agreement but that agreement cannot be given effect because Mr Warming does not have the funds available at the moment to meet the commitments under the agreement.
In response to these submissions ABL submitted that if Mr Warming were a party to the second loan it would seek summary judgment against him. It was submitted that the settlement negotiations cannot be put in evidence and that it must have been clear to Mrs Warming in June at the latest that ABL was not going to wait.
Analysis
The Court does not just look at the pleadings but will look further at the affidavits to satisfy itself that there is no defence.[28]
[28] Ke Qin Ren v Hong Jiang (2014) ACSR 149.
It is not disputed that Warmings entered into the second loan deed. I am satisfied by reference to the second loan application that Mrs Warming signed the document as both a Director of Warmings and as guarantor. Any ambiguity about whether this was the case is resolved by the statement in the checklist of the application saying ‘Directors of corporate applicants will be required to provide a personal guarantee’. Mrs Warming was a Director of the company at the relevant time. Another statement says ‘The declaration at the end of this application must be signed and dated by all applicants and guarantors’. The document is signed by Mrs Warming as Applicant/Guarantor. I am satisfied that Mrs Warming guaranteed the second loan. It is also not disputed that no payments have been made in respect of the second loan since 30 November 2008.[29]
[29] See divider 9, Exhibit SFS11 to Mr Flamer-Smith’s affidavit.
An ASIC search in respect of Warmings Commercial Services Pty Ltd shows that Mrs Warming was a Director and Secretary from 27 June 1995 to 31 July 2014.[30]
[30] See divider 11, Exhibit SFS11 to Mr Flamer-Smith’s affidavit.
Mrs Warming has not put forward any defence to the claim in relation to the second loan. Mrs Warming was ordered to file any responding affidavit to FDN 61 by 11 September 2015. No affidavit was filed by the time of the hearing and the solicitor who appeared for Mrs Warming at the hearing of FDN 61 was not instructed to make any submissions opposing the application.
There is no evidence before me indicating that the third defendant was a party to the second loan and that anything he might proffer would assist the fourth defendant in defending the action. The time for putting forward a defence to the claim has long passed.
As no defence to the second loan as pleaded by ABL has been filed and served ABL is entitled to judgment in default.
I am satisfied that ABL is also entitled to an order for summary judgment pursuant to r 232 which provides:
(1) The Court may, on application by a party, give summary judgment for that party.
(2) Summary judgment may only be given if the Court is satisfied that—
(a) if the applicant is a plaintiff—there is no reasonable basis for defending the applicant's claim; or
(b) if the applicant is a defendant—there is no reasonable basis for the claim against the applicant.
I am satisfied that, having regard to the affidavits relied on by ABL, the Defence filed 16 September 2013, FDN 39, and the oral submissions:
·Mrs Warming guaranteed the second loan;
·the monies the subject of the second loan were advanced on 15 June 2007;
·payment of the second loan by instalments were made from 31 July 2007 to 30 November 2008;
·no payments have been made on the second loan since November 2008;
·the second loan was assigned to ABL from 1 January 2008 pursuant to the Sale Notice given by GSF to ABL as deposed to in Mr Kok’s affidavit;
·no defence to the pleading in [25]–[49] of the Statement of Claim regarding the second loan has been filed;
·no affidavit has been sworn by Mrs Warming deposing to any grounds of defence in answer to FDN 61; and
·there is no reasonable basis for defending the claim.
I am satisfied that ABL is entitled to the orders it seeks as “there is no reasonable basis for defending [ABL’s] claim”.[31]
[31] Supreme Court Civil Rules 2006 (SA) r 232(2)(a).
I, therefore, enter summary judgment for ABL against Mrs Warming in respect of the second loan. I will hear the parties as to judgment sum and any other terms of the order for summary judgment.
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