Summary judgment applications: New procedure considered

Note: Footnotes omitted and emphasis added

[1] The plaintiffs, in two actions, instituted against the same defendant, on what appear to be the same causes of action, have applied for summary judgment. Both applications came up for hearing together in the Fourth Division on the semi-urgent roll, having been postponed by agreement between the parties on that basis by the motion court judge.

[2] The well-established summary judgment procedure that had worked successfully for so long has recently been materially altered by means of various amendments to rule 32 of the Uniform Rules of Court. The applications in the cases before me were brought in terms of the ‘new’ rule 32, which has been in effect since 1 July 2019.

[3] One might easily be forgiven, however, when regard was had to the parties’ heads of argument, for thinking that it was business as usual. Reliance was had on the established leading authorities like Maharaj and Joob Joob Investments, with no indication that any consideration had been given to whether, and if so, how, the principles rehearsed in such authorities might have been affected by the changes wrought to the procedure in terms of the recent amendments. On the face of it, as I made clear during the oral argument, I would have thought that that approach was misconceived.

[4] Apart from a full bench decision in the Gauteng Division on the question of whether the amendments affected applications that were instituted before 1 July 2019, there does not appear to be any reported jurisprudence yet on the operation of the amended procedure.

[5] Why it was thought desirable to bring in changes that will inevitably delay the ability of, and increase the cost to, deserving plaintiffs to obtain summary judgment is less than clear. It is also not self-evident how the courts are expected to deal with the extra material, in many cases disputatious material, that will now be put before them in such applications, in determining whether a defendant has shown that it has a bona fide defence.

Commentators have noted that ‘Rule 32 in its amended form is not a model of clarity’. They have also gone so far as to opine that ‘the fact that under the new procedure the merits of a defendants pleaded defence in an action would be subjected to judicial scrutiny in what in effect is an opposed motion and not in the normal course of a trial, raises the issue of constitutionality of the procedure’. It will become apparent later in this judgment that I do not share the latter opinion.

[6] As the object of the amendments does not emerge altogether clearly from the wording, which might easily be read to have introduced purely mechanical changes, it is relevant to refer to the Memorandum published by the Task Team constituted by the Rules Board when it advertised for comment as to whether rule 32 should be amended.

[7] The Task Team had concluded that the existing procedure was unsatisfactory because (i) ‘deserving plaintiffs were frequently unable to obtain expeditious relief because of an inability to expose bogus defences (either in their supporting affidavit or in any further affidavit – further affidavits not being permitted)’, (ii) ‘opportunistic plaintiffs were able to use the procedure to get the defendant to commit to a version on oath and thus obtain a tactical advantage for a trial in due course’ and (iii) the constitutional challenges to which it reportedly had given rise.

The Team considered that the identified causes for concern might ‘best be alleviated and addressed’ by

• (a) providing that an application for summary judgment be brought after the defendant had filed its plea rather than after it had given notice of intention to defend and
• (b) replacing the essentially pro forma (‘formulaic’) style of supporting affidavit in summary judgment applications with a supporting affidavit that ‘should instead identify any point of law relied upon and explain briefly why the defence as pleaded does not raise any triable issues’.

[8] Paragraph 8 of the Memorandum gave the following ‘brief overview’ of the Task Team’s reasoning:

‘8.1 A plaintiff at present does not have to indicate what exactly its cause of action is, or what facts it relies on, or why a defendant does not have a defence. Instead, the plaintiff is merely required (and permitted) to file a brief affidavit, taken from a template, “verifying the cause of action” in the vaguest possible way, opining that the defendant has no bona fide defence, and stating that “a notice of intention to defend has been delivered solely for the purpose of delay” (rule 32(2). This formulaic affidavit is unsatisfactory in many respects.

8.1.1 The plaintiff, when deposing to its affidavit under the current rule, may well not be aware what defence the defendant is intending to advance.
8.1.2 The deponent of the affidavit (who could, for example, be an accounts manager in a bank) is also likely to have little idea as to why exactly the defendant is opposing: the defendant could for example believe (wrongly) that it has a viable defence, or that there is some impediment to the plaintiff succeeding irrespective of the merits (e.g. prescription, jurisdiction or lack of standing), or that the equities are such that a court could well be minded not to grant judgment for the plaintiff.
8.1.3 The current founding affidavit in summary judgment proceedings therefore invariably involves speculation on the part of the plaintiff’s deponent. The lack of specificity as to the plaintiff’s claim, and the complete lack of detail as to why the defendant’s envisaged defence is bogus, coupled with the absence of any replying affidavit, also means that the plaintiff can easily be frustrated by a defendant who is prepared to construct or contrive a defence, or rely on technical points.

8.2 The best way of addressing these shortcomings would seem to be to require the founding affidavit in support of summary judgment to be filed at a time when the defendant’s defence to the action is apparent, by virtue of having been set out in a plea. This course is better than allowing a replying affidavit to be filed (as was suggested by a report prepared a few decades ago by the Galgut Commission). Merely including provision for a replying affidavit would not address the problems with the formulaic nature of the founding affidavit, and the speculation inevitably contained therein.
8.3 In the event of a plaintiff applying for summary judgment after the delivery of a defendant’s plea, the plaintiff would be able to explain briefly in its founding affidavit why the defences proffered by the defendant do not raise a triable issue; and should indeed be required to do so in order that the question of whether there is a bona fide defence which is capable of being sustained could be considered by the Court in a meaningful way. Requiring the plaintiff to set out why, in its view, it has a valid claim and why the defendant’s defence is unsustainable, would also remove the criticism that the defendant is being required to commit itself to a version when the plaintiff is not similarly burdened. Obliging the plaintiff to engage meaningfully with the case in its founding affidavit would moreover have the added benefit of reducing the temptation for a plaintiff to seek summary judgment as a tactical move (and as a way of forcing the defendant to commit to a version on oath, which can be subsequently used in cross-examination to discredit a witness of the defendant).
8.4 A stipulation that a plaintiff can only apply for summary judgment after delivery of a plea (rather than a notice of intention to defend) would also mean that the summary judgment application would be adjudicated on the basis of the defendant’s pleaded defence and thus hopefully avoid a situation (such as not infrequently occurs under the current rule) where a defendant’s version in its opposing summary judgment application diverges materially from its subsequently-delivered plea. The summary judgment debate will thus hopefully be a more informed, and less, artificial, one, and engage with the real issues in the matter.
8.5 Although foreign practice must be viewed with caution given the differences between countries and their procedural systems, it is notable, too, that the other jurisdictions considered by the Task Team – the United Kingdom, Canada, Australia and the U.S.A. – all permit summary judgment only after a plea has been filed (and indeed after pleadings have closed). The summary judgment procedure was seemingly introduced in South Africa on the basis of its use in England and Scotland. The fact that summary judgment is only competent in those jurisdictions after at least a plea has been filed (and would thus be premature after merely a notice of intention to defend has been delivered) is thus reassuring, and indicative of the merits of the proposed change.
8.6 If the summary judgment procedure is changed as proposed, the Task Team does not believe that a replying affidavit would either be necessary or appropriate. A plaintiff would have had a chance to address the averments in the defendant’s plea in its founding affidavit in support of summary judgment. If the defendant has a further rebuttal in its answering affidavit, then, if that is credible, the summary judgment application would be defeated; but that is not necessarily inappropriate as the matter would then presumably have complexities which render it ill-suited to the summary judgment remedy. For a similar reason, a referral to oral evidence (also mooted in the Galgut Commission report) seems inadvisable.
8.7 The Task Team debated whether, as in the comparative jurisdictions consulted, summary judgment should potentially be available for any kind of claim (including illiquid claims for damages). It was concluded that this would not be appropriate, and that summary judgment could justifiably be confined to the kinds of matters referred to in section 32(1).
8.8 The Task Team also debated whether, if summary judgment should no longer be brought after delivery of a notice of intention to defend, it should be allowed only after close of pleadings. It was however decided against requiring a plaintiff to wait until after any replication, rejoinder or rebuttal had been filed. While such a rule would ensure that the debate was fully informed, and based on all pleaded defences and ripostes, it was thought that the speediness of the remedy could be compromised, and also that, as the objective behind summary judgment was to allow judgment to be obtained expeditiously in clearly deserving cases, a matter in which there were replications, rebuttals and the like was probably one ill-suited to summary judgment.

[9] The reasoning is, with respect, not as helpful as might have been hoped in giving meaningful insight into the rationale for, and intent behind, the rule changes.

[10] The constitutional challenges reportedly mounted against the established rule (the rationale of which was only 10 years ago held by the Supreme Court of Appeal in Joob Joob Investments to be ‘impeccable’ and praised by the court at the time as a procedure that had been usefully and effectively implemented for nearly a century ) are not identified in the Task Team’s memorandum.

They, in any event, do not appear to have been pressed to determination, for I could find no record of them in the law reports, nor on SAFLII. Insofar as it might be implied that they may have been predicated on the contention that the old rule had the capacity of unfairly depriving defendants of their right to a full-blown trial, their prospects of success could only be rated as poor if regard were had to the fate of a similar challenge to the provisional sentence procedure, rejected by a unanimous court in Twee Jonge Gezellen v Land and Agricultural Development Bank of South Africa.

The Constitutional Court did find that the common law pertaining to provisional sentence required development by the infusion of a degree of judicial discretion into the procedure in the interests of justice, but summary judgment has, by contrast with that procedure, always been subject to a generous measure of judicial discretion.

[11] It is difficult to see how the ability of plaintiffs to obtain ‘expeditious relief’ through summary judgment is to be facilitated or rendered less susceptible to constitutional challenge by postponing their opportunity to apply for it until after the defendant has delivered its plea. The change undoubtedly comes at a cost, both in time and expense. The evident effect of these considerations on plaintiff litigants has been notable. There has been a significant drop in the number of summary judgment applications on the court rolls. The reduced numbers would suggest that if ever the procedure were genuinely regarded by litigators as ineffective before the amendments, it might now be regarded as even more so. Time will tell.

[12] The Task Team professed to take comfort from the timing of summary judgment applications in other jurisdictions such as England and Australia. But reference to the summary judgment procedures in those countries shows that the import of the procedures that go by that label there differs starkly from that in place here (whether in original or amended form). Most significantly perhaps, by virtue of the fact that the test for summary judgment in the foreign jurisdictions involves an assessment of the merits of the case in order to determine whether the party against whom summary judgment is applied for (it could be either claimant or defendant in England and Australia) enjoys either a ‘real’ or a ‘reasonable’ prospect of success if the matter were to go to trial. It would, understandably, usually be difficult for such an assessment to occur before a plea had been delivered.

[13] However, our procedure, by contrast, even in its amended form, remains true to that in which summary judgment was originally introduced in the English civil procedure in the mid-19th century. Rule 32(3), which regulates what is required from a defendant in its opposing affidavit, has been left substantively unamended in the overhauled procedure. That means that the test remains what it always was: has the defendant disclosed a bona fide (i.e. an apparently genuinely advanced, as distinct from sham) defence?

There is no indication in the amended rule that the method of determining that has changed.

The classical formulations in Maharaj and Breitenbach v Fiat SA as to what is expected of a defendant seeking to successfully oppose an application for summary judgment therefore remain of application. A defendant is not required to show that its defence is likely to prevail. If a defendant can show that it has a legally cognisable defence on the face of it, and that the defence is genuine or bona fide, summary judgment must be refused. The defendant’s prospects of success are irrelevant.

[14] The Task Team’s concern about the use by plaintiffs of the procedure for ‘tactical advantage’ is also difficult to understand as a basis for the amendments to the rule that have been introduced. Litigation is not a game. And in the modern era, the general tendency in litigation worldwide is for courts to require litigants to make full disclosure of their cases as early as possible so as to facilitate effective case management and promote the most efficient and cost effective disposal of cases by the avoidance of unnecessary trials and the shortening of those that do proceed to hearing.

A plaintiff that applied for summary judgment when it knew or reasonably should have appreciated that the defendant had a bona fide defence, and was therefore abusing the procedure, was always, and remains, exposed to an adverse costs order. The amended rule provides for even stricter sanctions against abuse, by providing expressly for the making of orders that the proceedings be suspended until the delinquent plaintiff has paid any costs awarded against it for abusing the procedure.

[15] What the amendment requiring an application for summary judgment to be brought only after a plea has been delivered is identifiably directed at achieving, and should succeed in doing, is the avoidance of speculative summary judgment applications.

Under the previous regime, a plaintiff might bring the application in the genuine belief that the defendant had entered an appearance to defend only for the purpose of delay, only to learn that the defendant was able to make out a bona fide defence when the defendant’s opposing affidavit was delivered. Such applications, and there were many, rarely went to a hearing, however. That was because the parties to such matters would almost invariably agree to ‘the usual order’, granting the defendant leave to defend.

Under the new rule, a plaintiff would be justified in bringing an application for summary judgment only if it were able to show that the pleaded defence is not bona fide; in other words, by showing that the plea is a sham plea.

[16] Of primary interest in the adjudication process, and no doubt also for practitioners assisting litigants with the drafting of their affidavits, are the changes in the stated requirements for –

(i) the content of the plaintiff’s supporting affidavit, and
(ii) in relation to (i), the effect, if any, of the aforementioned changes on what is expected of a defendant in respect of its opposing affidavit.

Content of the supporting affidavit

[17] As to (i), rule 32(2)(b) now provides that the supporting affidavit must ‘verify the cause of action and the amount, if any, claimed, and identify any point of law relied upon and the facts upon which the plaintiff’s claim is based, and explain briefly why the defence as pleaded does not raise any issue for trial’. The change was effected by the insertion of the underlined wording into the subrule.

[18] It is by no means obvious what was sought to be achieved by inserting the requirement that the deponent to the supporting affidavit must identify any point of law relied upon and the facts upon which the plaintiff’s claim is based. After all, now that summary judgment applications fall to be brought after the plea has been delivered, there will always be either a combined summons or a simple summons and declaration already on record. The particulars of claim or declaration are required to comply with the requirements for pleading set out in rule 18.

Accordingly, they must contain a clear and concise statement of the material facts upon which the plaintiff relies for its claim with sufficient particularity to enable the defendant to plead thereto. If the allegations in the pleaded claim do not make out a cause of action that is cognisable in law, it is amenable to exception, and if the pleading does not comply with rule 18, it is liable to be struck out as an irregular step. If the plaintiff’s cause of action depends on a ‘legal point’ that is not evident on the alleged facts, the point should therefore already be apparent in the summons or declaration.

One must assume therefore that a claim to which a plea has been delivered should be neither excipiable nor non-compliant with the requirements of rule 18 as to particularity.

[19] Is the deponent to the supporting affidavit then required to repeat in narrative form what should already be apparent from the plaintiff’s pleadings? Or is he or she expected to set out the facta probantia in elaboration of the facta probanda alleged in the pleadings?

Having regard to the purpose of summary judgment proceedings, which is to prevent matters in which the defendant does not appear to have a bona fide defence having to go to trial, no obvious point is served by an elaborate supporting affidavit concerning the merits of the plaintiff’s pleaded claim.

[20] I think that it would be desirable therefore if plaintiffs were encouraged to confirm what should already be apparent from their pleaded case as succinctly as possible. No purpose will be served by a laborious repetition of what the judge and the defendant should be able to discern independently from the pleaded claim.

No harm will be done by using a ‘formulaic’ mode of expression if it serves the purpose; which, it seems to me, it would do in most matters.

[21] The requirement that the plaintiff’s supporting affidavit should explain briefly why the pleaded defence ‘does not raise an issue for trial’ is of more interest. It cannot be taken literally, for a plea that did that would be excipiable, and there is no indication that the amended summary judgment procedure is intended as an alternative to the exception procedure.

For the reasons given later with regard to the cases before me, I consider that the amended rule 32(2)(b) makes sense only if the word ‘genuinely’ is read in before the word ‘raise’ so that the pertinent phrase reads ‘explain briefly why the defence as pleaded does not genuinely raise any issue for trial’.

In other words, the plaintiff is not required to explain that the plea is excipiable. It is required to explain why it is contended that the pleaded defence is a sham. That much is implicit in what the Task Team said in para. 8.3 of its Memorandum.

The position would have been made clearer had the words ‘does not make out a bona fide defence’ been used.

That would have made for a more clearly discernible connection between the respective requirements of subrules (2)(b) and (3)(b). That there be such a connection is necessary if the amended rule as a whole is to be workable.

[22] What the amended rule does seem to do is to require of a plaintiff to consider very carefully its ability to allege a belief that the defendant does not have a bona fide defence. This is because the plaintiff’s supporting affidavit now falls to be made in the context of the deponent’s knowledge of the content of a delivered plea.

That provides a plausible reason for the requirement of something more than a ‘formulaic’ supporting affidavit from the plaintiff. The plaintiff is now required to engage with the content of the plea in order to substantiate its averments that the defence is not bona fide and has been raised merely for the purposes of delay.

[23] It seems to me, however, that the exercise is likely to be futile in all cases other than those in which the pleaded defence is a bald denial. This is 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. It is concerned only with an assessment of whether the pleaded defence is genuinely advanced, as opposed to a sham put up for purposes of obtaining delay.

A court engaged in that exercise is not going to be willing to become involved in determining disputes of fact on the merits of the principal case. As the current applications illustrate, the exercise is likely therefore to conduce to argumentative affidavits, setting forth as averments assertions that could more appropriately be addressed as submissions by counsel from the bar. In other words, it is likely to lead to unnecessarily lengthy supporting affidavits, dealing more with matters for argument than matters of fact.

Content of the opposing affidavit

[24] As to (ii), rule 32(3)(b), which provides for what is required in a defendant’s opposing affidavit, remains as it was before, save that the affidavit must now be delivered at least five days before the hearing of the application, instead of by noon on the day but one before the hearing, as had previously been the case.

As has always been the position, the opposing affidavit must ‘disclose fully the nature and grounds of the defence and the material facts relied upon therefor’. The purpose of the opposing affidavit also remains, as historically the case, to demonstrate that the defendant ‘has a bona fide defence to the action’.

There is thus no substantive change in the nature of the ‘burden’, if that is what it is, placed on a defendant in terms of the procedure. However, the broader form of supporting affidavit that is contemplated in terms of the amended rule 32(2)(b) will in some cases require more of a defendant in respect of the content of its opposing affidavit than was the case in the pre-amendment regime, for the defendant will be expected to engage with the plaintiff’s averments concerning the pleaded defence. In this regard I anticipate that we shall also see much argumentative matter in the opposing affidavits under the new regime, for argument will be met with counter-argument.

[25] The assessment of whether a defence is bona fide is made with regard to the manner in which it has been substantiated in the opposing affidavit; viz. upon a consideration of the extent to which ‘the nature and grounds of the defence and the material facts relied upon therefor’ have been canvassed by the deponent.

That was the method by which the court traditionally tested, insofar as it was possible on paper, whether the defence described by the defendant was ‘contrived’, in other words not bona fide. And the amended subrule 32(3)(b) implies that it should continue to be the indicated method. (If a case gives rise to a defendant being able to cogently rely on ‘technical points’, it was, and remains, entitled to do so.)

[26] The traditional import of the requirement that the facts relied on by a defendant be ‘fully’ disclosed was mentioned earlier in this judgment. It may be, now that the opposing affidavit falls to be made after the defendant’s plea has been delivered, that more is required of the defendant in terms of the amended rules than was previously demanded.

After all, the qualification by Corbett JA in Maharaj supra, loc. cit., that ‘the defendant is not expected to formulate his opposition to the claim with the precision that would be required of a plea; nor does the Court examine it by the standards of pleading’ sounds incongruous when the court adjudicating the summary judgment already has the plea before it. But if the requirements are indeed more stringent, does it mean that the intention behind amendment was to make the procedure more draconian or drastic than it used to be? I doubt it.

[27] Had such a signal change been intended, it seems unlikely that subrule 32(3) would have been left substantively in the same form that it used to have. I would also have expected any change in what was required of the defendant’s opposing affidavit to be accompanied by the introduction of other changes to bring our procedure more into line with that in jurisdictions in which the courts are able to give directions that enable the genuineness of the advanced defences to be further explored before summary judgment is granted or refused, or further directions to be given for the management of the claim.

[28] Against the background of the aforegoing analysis, it is time to turn to the determination of the two applications under the new rule that are before me.

. . . . .

Orders

[55] The following order is made in case no. 3671/2019:

(a) Summary judgment is granted in favour of the plaintiff in the sum of R1 063 640,40, together with interest a tempore morae at 10,25% per annum on the constituent monthly amounts of R70 897,36 from the dates upon which each such amount fell due during the period 31 December 2017 to 28 February 2019 to date of payment.
(b) The defendant is ordered to pay the plaintiff’s costs of suit incurred to date of this judgment.
(c) The plaintiff’s claim for ongoing payments from 1 March 2019 is referred to trial and, insofar as necessary, the defendant is granted leave to defend that claim.

[56] The following order is made in case no. 3670/2019:

(a) Summary judgment is granted in favour of the plaintiff in the sum of R885 427,35, together with interest a tempore morae at 10,25% per annum on the constituent monthly amounts of R59 028,49 from the dates upon which each such amount fell due during the period 31 December 2017 to 28 February 2019 to date of payment.
(b) The defendant is ordered to pay the plaintiff’s costs of suit incurred to date of this judgment.
(c) The plaintiff’s claim for ongoing payments from 1 March 2019 is referred to trial and, insofar as necessary, the defendant is granted leave to defend that claim.