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[2016] ZAGPJHC 117
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Nel and Another v Fensham t/a MV Finance (31739/2015) [2016] ZAGPJHC 117 (26 May 2016)
THE
HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO: 31739/2015
DATE:
26 MAY 2016
In
the matter between:
NEL:
RENIER
ENHARDT
.............................................................................................
First
Applicant
LSC
PROPERTY FINANCE
CC
...............................................................................
Second
Applicant
And
MONIQUE
VERONICA FENSHAM t/a MV
FINANCE
.........................................
First
Respondent
JUDGMENT
RATSHIBVUMO
AJ
:
1.
The applicants seek a relief whereby the
respondent is ordered to pay a sum total of R1 050 000.00
plus interests and
costs of suit. R800 000.00 of this is claimed
by the First Applicant, an attorney practising under the name and
style of Renier
Nel Incorporated, whereas R250 000.00 is claimed
by the Second Applicant. The reason the claims are brought through
one application
is that according to the First Applicant, who also
represents the Second Applicant, the cause of action emanates from
the same
facts and it involves the same parties.
2.
Background
:
It is common cause that during June/July 2013, the Respondent
transferred R1 070 000.00 into Renier Nel Incorporated’s
the banking account. More than a year later, two payments were made
from Renier Nel Incorporated into the Respondent’s banking
account; being R400 000.00 made on 02 October 2014 and
R450 000.00 made on 03 November 2014. Another payment into the
Respondent’s account was effected on 27 November 2014 from the
Second Applicant, in the amount of R200 000.00. There
are no
written agreements to explain these transactions and the terms and
references if any. The transactions are based on oral
agreements
which are now the subject of dispute.
3.
According to the First Applicant, the
payment made by the Respondent in 2013 was a bridging finance to one,
Cecil Uren (Uren) facilitated
by the First Applicant. The First
Applicant further alleges that
the
Respondent, represented by Mark Fensham, the Respondent’s
father (Fensham), approached Renier Nel Incorporated and the
Second
Applicant in October 2014 with a request for bridging finance on the
Standard Bank bonds for purposes of development funds
for another
development being undertaken by him (Fensham) and the Respondent.
This resulted in an oral agreement being entered
into between the
Respondent represented by Fensham, Renier Nel Incorporated
represented by the First Applicant in October 2014
at Roodepoort. It
is alleged further that the Second Applicant (it is not clear who
represented the Second Applicant) was also
part of this agreement.
This agreement resulted in the three transactions whereby money was
paid into the Respondent’s account.
It is this money totalling
R1 050 000.00, which is now being claimed by the
Applicants.
4.
The Respondent disputes the First
Applicant’s version. According to her, she never advanced a
bridging finance to Uren. The
payment of R1 070 000.00 made
in 2013 was a loan advancement to Renier Nel Incorporated which had
to be paid back. Therefore
the deposits made by Renier Nel
Incorporated and the Second Applicant in October and November 2014
were the repayments for the
said loan. She denies that there is any
oral agreement in terms of which she needed bridging finance. She
also denies that her
father, Fensham was party to any such deal or
that he represented her at all. For these reasons, she denies that
the amount claimed
is owed and due by her.
5.
Issues for determination:
There
is no dispute that the payment made by the Respondent into Renier Nel
Incorporated was transferred to Uren although the full
details as to
the exact amount and the terms and conditions thereof remain unknown.
It further appears that Uren has partially
paid back the said loan
into Renier Nel Incorporated. The major dispute is whether the
advancement to Uren was based on an agreement
between him and the
Respondent or between him and Renier Nel Incorporated and/or the
First Applicant. It follows to be decided
as to whether there was an
agreement between the Respondent and Renier Nel Incorporated and / or
the First Applicant and the Second
Applicant entered into in October
2014. Lastly, it remains disputed whether Fensham’s
representations with the Applicants
if any, are binding on the
Respondent.
6.
The
National Credit Act:
Before
dealing with the merits of the application, the Respondent contends
that the Applicants failed to comply with the provisions
of sections
129 and 130 of the National Credit, no 34 of 2005 (the Act) in that
the necessary letters of notification were not
sent as provided for
by the Act. For this reason, the Respondent submits that the
application should be adjourned with the court
making an appropriate
order setting out the steps the credit provider must complete before
the matter may be resumed.
[1]
The Applicants argue that the Act is not applicable because there was
no credit transaction between the Applicants and the Respondents.
According to the Applicants, the payment was a bridging finance which
cannot be subjected to the provisions in sec 129 and 130
of the Act.
7.
Sec 8
(3) of the Act attempts to define a
credit facility as follows,
(3)
An agreement, irrespective of its form but not including an agreement
contemplated in subsection (2) or
section
4
(6)(b),
constitutes a credit facility if, in terms of that agreement –
(a)
a credit provider undertakes –
(i)
to supply goods or services or to pay an amount or amounts, as
determined by the consumer from time to time, to the consumer
or on
behalf of, or at the direction of, the consumer; and
(ii)
either to –
(aa)
defer the consumer’s obligation to pay any part of the cost of
goods or services, or to repay to the credit provider
any part of an
amount contemplated in subparagraph (i); or
(bb)
bill the consumer periodically for any part of the cost of goods or
services, or any part of an amount, contemplated in subparagraph
(i);
and
(b)
any charge, fee or interest is payable to the credit provider in
respect of –
(i)
any amount deferred as contemplated in paragraph (a)(ii)(aa); or
(ii)
any amount billed as contemplated in paragraph (a)(ii)(bb) and not
paid within the time provided in the agreement.
8.
The
Act stipulates circumstances under which an agreement becomes a
credit transaction.
Save
for a few exceptions not relevant for purposes of this application,
an agreement, irrespective of its form, constitutes a credit
transaction “if it is any other agreement, other than a credit
facility or credit guarantee, in terms of which payment of
an amount
owed by one person to another is deferred, and any charge, fee or
interest is payable to the credit provider in respect
of the
agreement; or the amount that has been deferred.”
[2]
As Mathopo J (as he then was) observed in
Bridgeway
LTD v Markam
,
[3]
a discount sale which provides the respondent with ready money cannot
be classified as credit transaction. This is clearly distinct
from a
money-lending or credit transaction because in the latter instance
the transaction occurs when a party borrows money from
the lender and
undertakes to pay an equal amount in full, in instalments or
periodically. The lender is therefore compensated for
laying out his
money by the interests that he charges the borrower.
9.
In
Renier
Nel Inc and Another v Cash on Demand KZN (PTY) LTD
,
[4]
the full bench of this division referred to
Bridgeway
LTD v Markam
[5]
with
approval and concluded,
“
Even
if one is wrong in concluding that the challenged transactions do not
fall foul of the NCA, there remain other considerations
why the
respondents should not be able to evade payment of the debt. It is
clear from a long line of cases that, ultimately, policy
considerations lie behind the courts' unwillingness to condone
illegal agreements. Nevertheless, as Kotze J said in
Burger
v South African Mutual Life Insurance Society
,
the doctrine of public policy 'ought not to be stretched beyond what
is necessary for the protection of the public'. There would
be no
apparent advantage to the public if the applicant were to be denied a
right of recourse against the respondents in this case.”
10.
There
is therefore no merit in the argument by the Respondent that since in
the founding affidavit, the First Applicant used words
to the effect
that he would “lend” money to the Respondent, it should
make the agreement to be a credit transaction.
A
court
may not admit evidence as to what the parties intended in an
agreement if that has the effect of changing the terms on which
they
clearly agreed.
[6]
The court is
therefore inclined to accept the Applicants’ submission that
there was no obligation on them to comply with
the provisions of sec
129 of the Act, since the agreement as stated in their case does not
constitute a credit transaction.
11.
The
merits:
I
now turn to the merits of the case to consider the issues for
determination. It is clear that First Applicant and/or Renier Nel
Incorporated had a contractual relationship with the Respondent
dating as far back as 2006.
[7]
This relationship involved a cash flow from the Respondent to Renier
Nel Incorporated and then to other third parties. While it
is not
certain whether these constituted agreements between the third
parties and the Respondent or the third parties and Renier
Nel
Incorporated; it is however clear that the Respondent personally
entered into these oral agreements with the First Applicant
representing Renier Nel Incorporated, without being represented by an
agent. The Respondent states in her affidavit that although
the First
Applicant was acquainted with her father, he approached her for
advance loan in 2006.
[8]
Although these agreements were unwritten, it appears the parties had
no dispute whatsoever over them, for many years. There is
no
suggestion by the First Applicant or the Respondent that Fensham
represented the Respondent in these agreements.
12.
It is not clear from the First Applicant’s
papers as to what formed the basis for Fensham to act in a
representative capacity
for the Respondent when negotiating the
October 2014 loan advancement. He is only referred to as the
Respondent’s father.
This cannot by any means suggest that the
Respondent was a minor who required assistance from the guardian; for
she was cited as
a major businesswoman. The court remains in the dark
as to whether Fensham could be an employee of the Respondent and if
so, what
position he held. Even after the Respondent made it clear in
her affidavit that she disputed that Fensham had authority to
represent
her, the First Applicant does not even attempt to show that
Fensham acted on her mandate.
13.
One would have expected the First Applicant
to produce evidence that proves that the Respondent ratified the
deals negotiated for
her by the said Fensham. Past similar conduct
could also make the First Applicant to believe that he still had
similar mandate,
but it appears he has not acted as such even in the
past. The First Applicant attempted to prove the existence of a
contract between
the Respondent and Uren. The importance thereof is
that if proved to exist, then the explanation by the Respondent that
money paid
to her was a loan repayment falls to be rejected. But none
of the correspondences from, to or about Uren were copied to the
Respondent
or brought to her attention at any stage before this
litigation.
14.
Upon
reading the founding affidavit of the First Applicant, an impression
is created that the Respondent was aware of the fact that
Fensham
entered into an agreement on her behalf when it is suggested that the
Respondent signed amended authorities to pay him
as securities
pursuant to such agreements.
[9]
In response to Rule 35 (12) Notice, the First Applicant failed to
produce the said amended authorities to pay. It turned out that
the
Respondent never signed any authority to pay the First Applicant
subsequent to the disputed agreement in October 2014. The
only
authority to pay Renier Nel Incorporated is dated 15 May 2014, some 5
months prior to the alleged date of the agreement.
15.
The
Applicants seem to rely on ostensible authority by Fensham. As
Schultz JA observed in
NBS
Bank Ltd v Cape Produce Company Pty Ltd and Others
,
[10]
ostensible authority emanates from the law of estoppel,
“
As
Denning MR points out, ostensible authority flows from the
appearances of authority created by the principal. Actual
authority
may be important, as it is in this case, in sketching the
framework of the image presented, but the overall impression received
by the viewer from the principal may be much more detailed. Our
law has borrowed an expression, estoppel, to describe a situation
where a representor may be held accountable when he has created an
impression in another’s mind, even though he may not have
intended to do so and even though the impression is in fact wrong.
Where a principal is held liable because of the ostensible authority
of an agent, agency by estoppel is said to arise. But the law
stresses that
the appearance, the
representation, must have been created by the principal himself
.
The fact that another holds himself out as his agent cannot, of
itself, impose liability on him.” [Own emphasis].
16.
Again,
in
Glofinco
v Absa Bank
[11]
,
the
SCA held,
“
A
representation
, it was emphasised in
both the
NBS
cases,
supra,
must
be rooted in the words or conduct of the principal himself and not
merely in that of his agent
(
NBS
Limited v Cape Produce Company (Pty) Ltd
,
supra
at
411H-I).
Assurances by an agent as to
the existence or extent of his authority are therefore of no
consequence when it comes to the representation
of the principal
inducing a third party to act to his detriment.
In the instant case counsel for the appellant relied principally on
the very appointment by the Bank of Horne as its branch manager,
thereby enabling her to impress upon Braude that she was duly
authorised, when in fact she was not, to commit the Bank to stand
surety for Playtime’s post-dated cheques; this impression was
reinforced, so it was further contended, by the fact that eight
earlier cheques of Playtime that Horne had marked ‘good for
funds’ had been met by the Bank by the time Horne stood
surety
on its behalf for the last of the series of cheques.” [Own
emphasis].
17.
The
alleged email confirming the agreement (FA3) is written in the names
of Monique but sent from
markfensham@yahoo.com
to
“Renier.” As to why the Respondent did not use her own
email address or she did not append her own signature remains
a
mystery. But FA8 reflects that the Respondent does sign her own
letters; and she does so in a personalised letterhead.
[12]
She denies any knowledge of the email contained in FA3 or that it was
written with her authority. According to the Respondent,
when she saw
the emails and whatsapp messages written by Fensham, she confronted
him since at the time they were written, she was
not in speaking
terms with him. Fensham informed her that he wrote emails and
whatsapp messages as requested by the First Applicant
who wanted
inter
alia
,
that Uren be intimidated into paying his debt. And indeed, the
threats seem to have intimidated Uren into paying. This explanation
is confirmed by Fensham in a separate affidavit. Given the vulgar and
unprofessional language ultimately used by Fensham which
the First
Applicant as an attorney may have been reluctant to use, I do not
find this possibility improbable.
18.
Whether Fensham behaved like he was
contracted to Uren is immaterial. Furthermore, Fensham is not a party
to these proceedings since
he was not cited as a respondent. There is
no basis upon which the Respondent can be held liable for an
agreement that she was
not part of. There is no evidence suggesting
that she expressly, tacitly or through ratification agreed to be part
of this agreement.
The Applicants chose to have their claim by way of
an application fully aware that the oral agreement was in dispute and
that there
is no paper trail that proves its existence.
19.
For the reasons stated above, it follows
that the following order is made:
19.1The
application is dismissed with costs.
T.V.
RATSHIBVUMO
ACTING
JUDGE OF THE HIGH COURT
Date
Heard: 18 May 2016
Judgment
Delivered: 26 May 2016
For the
Applicant: Adv. JH v d B Lubbe
Instructed by:
Nel Prokureurs
Johannesburg
C/O
Charmain Gibbens Attorneys
Johannesburg
For
the Respondent: Adv. PM Van Reyneveld
Instructed
by: Herman Prinsloo Attorneys
Pretoria
C/O
Gary Rachbuch & Associates
Johannesburg
[1]
As
provided for in sec 130 (4) (b) of the Act.
[2]
See
sec 8 (4) (f) of the Act.
[3]
[2008] ZAGPHC 251
;
2008
(6) SA 123
(W)
[4]
2011
(5) SA 259
(GSJ)
[5]
Supra
[6]
ABSA
Technology Finance Solutions (PTY) LTD v Michael Bid a House CC and
Another
2013 (3) SA 425
(SCA) para 20.
[7]
See
para 40 p. 16, being the First Applicant’s affidavit and para
20.7 p. 99 being the Respondent’s affidavit.
[8]
See
para 20.7 & 20.8 of her affidavit.
[9]
See
para 12.4.1, 12.4.2 & 12.2 on p. 10.
[10]
2002
(1) SA 396
(SCA)
[11]
2002
(6) SA 470
(SCA).
See
also
National
Board (Pretoria) (PTY) LTD and Another v Estate Swanepoel
1975 (3) SA 16
(A).
[12]
FA8
is a letter written by the Respondent to Standard Bank, p. 35