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[2016] ZAGPJHC 257
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Investec Bank Limited v Isinda 154 (Pty) Ltd and Others (42079/2012) [2016] ZAGPJHC 257 (23 August 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
Case
number: 42079/2012
In the
matter between:
INVESTEC
BANK
LIMITED
Plaintiff
and
ISINDA
154 (PTY)
LTD
First Defendant
MATSILELE
EPHRAIM
SONO
Second Defendant
MPULENY
GAIL
SONO
Third Defendant
LUNGILE
JOHN
KONKI
Fourth Defendant
ANNE
MORERI
KONKI
Fifth Defendant
KRISH
NAIDOO
Sixth Defendant
JUDGMENT
SATCHWELL
J:
INTRODUCTION
1.
Plaintiff sues
defendants for payment of a sum in excess of 9 million Rand (nine
million Rand). That claim is based on a loan agreement
as described
in paragraph 8 of the particulars of claim. Plaintiff now seeks to
amend that paragraph 8 to which proposed amendment
three out of six
of defendants have opposed.
2.
The background to this
application and the proposed amendment and opposition thereto is a
loan document which provided for a loan
of the sum of R 14 million
Rand (fourteen million Rand) to defendants on certain terms and
conditions. The loan was paid over.
Certain repayments were made by
defendants. Plaintiff now sues for the balance of the loan.
3.
Plaintiff submits that
the proposed amendment is no more than a reformulation of the already
extant first two averments in the particulars,
namely that the loan
was in writing and that it was tacitly accepted, together with the
introduction of a third basis for its claim
against defendants,
namely the existence of a tacit agreement. Defendants’
objection is founded upon the absence of a signature
by plaintiff to
the loan agreement as required, the consequent inability of plaintiff
to rely upon an unsigned document with the
result that the proposed
amendments do not set out a cause of action in any of the
alternatives.
AMENDMENTS
4.
With
respect, I must associate myself wholeheartedly with the many
authorities which have endorsed the approach that amendments
are
allowed in order “to obtain a proper ventilation of the dispute
between the parties, to determine the real issues between
them, so
that justice may be done”.
[1]
Court hearings are not a game in which the parties conceal facts
behind rules or procedures or punish one party for a mistake by
not
allowing that party to present the true dispute and issues
involved
[2]
. No court should be
hamstrung by rules and process to such an extent that it is unable to
render a just verdict on a true and complete
account of what has or
has not taken place.
5.
I appreciate that
defendants take the view that the proposed amendments are of such a
nature that they are unsustainable in fact
and in law. The upshot
would therefore be that the pleadings may be excipiable because the
particulars of claim would contain averments
which could not sustain
a claim.
6.
When I balance these
two interests – full and proper dispute of all issues versus
the possibility of a claim which a trial
judge may find is (in law)
unproven or unprovable – I must also take into account whether
or not any prejudice or inconvenience
which may be occasioned to
defendants could be resolved by an appropriate order for costs. I
must also consider the additional
time, effort, argument and costs
which may be occasioned should it indeed be the case that the grant
of these proposed amendments
would necessarily lead to
successful exception proceedings.
THE
PLEADINGS AND PROPOSED AMENDMENTS
The
pleadings
7.
The current paragraph 8
in the particulars of claim read as follows:
“
On
or about 23
rd
July 2007 and at Johannesburg, alternatively at Cape Town, the
Plaintiff represented by a duly authorised official, and First
Defendant, duly represented by the Fourth Defendant, concluded a
written Loan Agreement being loan agreement no 241612/0011
(hereinafter
referred to as ‘the Loan Agreement’). A copy
of the Loan Agreement is annexed hereto marked ‘POC1’.
8.1
The Loan Agreement includes as part of the agreement a Deed of Pledge
and Cession, a copy of which is included in annexure ‘POC1’hereto.
8.2
The Plaintiff’s written acceptance of the Loan Agreement
appears from the signature of its authorised official on the
Deed of
Pledge and Cession; alternatively, the Plaintiff, represented as
aforesaid, conveyed its acceptance of the Loan Agreement
to the First
Defendant verbally and/or by its conduct in implementing the Loan
Agreement.
8.3
The parties have fully implemented the Loan Agreement”
8.
The three defendants
pleaded to this paragraph to the effect that the loan agreement has
not been signed by plaintiff, that the
signature of the deed of
pledge and cession does not constitute signature of the loan
agreement, and that a proper interpretation
of the loan agreement
would result in a finding that the loan agreement is not valid and
binding unless and until it is signed
by both parties.
Accordingly, it has been pleaded that the agreement is not binding
upon the parties and plaintiff is not
entitled to proceed against
defendants in terms of the loan agreement.
9.
As can be seen
paragraph 8 of the particulars currently pleads either that the loan
agreement was accepted in writing by signing
a deed of pledge and
cession alternatively by verbal acceptance and conduct. So lengthy
are the proposed amendments that I am not
going to repeat them word
for word. In essence:
a.
Paragraph 8.1
summarises the case by the words “the Plaintiff’s express
and written acceptance thereof, alternatively
its tacit acceptance
thereof, alternatively by way of a tacit agreement on the same terms
and conditions as set out in annexure
POC1 mutatis mutandis.”
b.
Paragraph 8.2 states
that on a proper construction of the written offer it is clear that
written acceptance by plaintiff is a permissive
option solely for the
benefit of plaintiff who could elect to accept and be bound by the
agreement without reducing such acceptance
to writing.
c.
The tacit acceptance of
the offer is set out in paragraph 8.3 to the effect that the offer
was accepted in accordance with internal
procedures, defendant was
advised thereof, payment of the loan was both authorised and paid
out.
d.
Alternatively, as
set out in paragraph 8.4, the written acceptance of the offer
is to be found in internal documentation
which includes the
written authority to make payment and the signature on the deed
of pledge and cession.
It
would seem that these new paragraphs 8.3 and 8.4 are not much more
than elaboration of the earlier paragraph 8 to which defendants
have
pleaded.
10.
The proposed paragraph
8.5 is a new and alternative basis which sets out provision of the
written offer, acceptance of that offer
by plaintiff in accordance
with internal procedures, advice of such acceptance, authorisation of
payment and making of payment,
implementation of the loan agreement
which accordingly amounts to conclusion of a tacit contract on the
same terms and conditions
as those set out in the written loan
agreement. It is clear that the proposed paragraph 8.5 is an
entirely new ground giving
rise to the action.
Antecedent
binding agreement
11.
Insofar as the proposed
paragraphs 8.2 and 8.3 are concerned, defendants have argued that
where it is clear that the parties intended
that the contract should
be embodied in writing then the contract could only come into
existence when the written document has
been signed by both parties.
Plaintiff is not permitted to waive the requirements as they may
appear from the written document.
Accordingly, there would be no
binding agreement unless and until plaintiff had signed the document.
12.
For the purpose of this
ruling on the proposed amendments, I am not going to deal with the
relevant clauses of the loan agreement
and interpretation thereof.
I do not consider that I am here determining the merits of the action
itself.
13.
Defendants relied upon
Meter Motors (Pty)
Ltd v Cohen
1966
(2) SA 735
(T) for this argument and sought to distinguish the later
judgment of the Supreme Court of Appeal in
Pillay
& Another v Shaik & Others
2009
(4) SA 74
(SCA).
Pillay
supra
is, of
course, both a later judgment and one of the Supreme Court of Appeal.
I propose therefore to first have regard to
Pillay
supra
in which case
there was a dispute whether or not a standard-form
agreement headed “Agreement for the Purchase
of a Members
Interest in a Close Corporation” was binding on the parties
only when both parties had signed the document.
Defendants argued
that
Pillay supra
was distinguishable because the document in question did not provide
that it would not be binding unless and until signed by both
parties
whereas defendants maintain that the loan agreement in the present
matter can only be read to that effect. As I have indicated,
I do not
need to decide the correct reading of the loan agreement between the
litigants in this matter. The principle clearly enunciated
in
Pillay
supra
is not
dependant upon the facts.
14.
Writing
as a matter of principle and not confined to the facts of that
matter, the court in
Pillay
supra
stated
[3]
that
“
In
my opinion it is clear from
Goldblatt
and Freemantle
,
supra
,
and the authorities cited therein that, in the absence of a statute
which prescribes writing signed by the parties or their authorised
representatives as an essential requisite for the creation of a
contractual obligation (something which does not apply here),
[4]
an agreement between parties will be held not to have given rise to
contractual obligations only if there is a pre-existing contract
between the parties which prescribes compliance with a formality or
formalities before a binding contract can come into existence”
(at page 83 F – H).
15.
In
Pillay
supra
, the Supreme
Court of Appeal held that the passage in
Meter
Motors supra
upon
which reliance had been placed was “incorrect”
.
16.
There is no suggestion
before me that such a pre-existing contract exists which requires the
formality of writing before a binding
contract, such as the loan
agreement, could come into existence.
17.
I must repeat that I am
not, at the present time, determining the meaning of certain clauses
of the loan agreement. I am merely
examining whether or not it is
axiomatic that the loan agreement cannot be relied upon and that such
reliance is therefore inevitably
excipiable in the present
litigation.
18.
I find that that to
allow the proposed amendments 8.1, 8.2, 8.3 would not necessarily and
obviously lead to a finding of excipiability
and are therefore
allowed.
The
Tacit Agreement
19.
The proposed amendment
set out in paragraph 8.5 relies upon a series of external
manifestations and some documentation to aver a
tacit agreement
between the parties.
20.
Defendants again submit
that any tacit agreement would be struck by the same problems of
non-signature by plaintiff as was previously
argued.
21.
The absence of a
pre-existing contract prohibiting any contract until such time as all
parties have signed the subsequent document
has already been dealt
with.
22.
The opportunity to
consider all surrounding circumstances, whether prior,
contemporaneous or subsequent, to determine the intention
of the
parties has been clarified and applied in
Endumeni
Municipality
2012
(4) SA 593
(SCA),
Ekurhuleni
Metropolitan Municipality v Germiston Municipal Retirement Fund
2010
(2) SA 498
(SCA),
Bothma-Batho
Transport (Edms) Bpk v S Bothma & Seun Transport Bpk
2014
(2)
SA 494
(SCA) And most recently in
Novartis
SA v Maphil Trading
2016 (1) SA 518
(SCA). Neither this, nor any other court, is confined
solely to the linguistics of the loan agreement between these
litigants to
determine whether or not the parties intended to bind
themselves contractually. As was said in
Novartis
supra
“that
inevitably requires an examination of the factual matrix – all
the facts proven that show what their intention
was in respect of
entering into a contract: the contemporaneous documents, their
conduct in negotiating and communicating with
each other, and,
importantly, the steps taken to implement the contract” [at
para 35].
23.
I can see no impediment
to the plaintiff now seeking to amend its particulars of claim so as
to be able to rely upon those averments
set out in the proposed
paragraph 8.5 to plead a tacit agreement on the same terms as are set
out in the loan agreement.
24.
Accordingly, the
amendment proposed in paragraph 8.5 is allowed.
COSTS
25.
Since I propose to
grant the application for all the amendments to the particulars of
claim, it would seem logical that costs should
follow the result.
26.
I certainly would not
penalise defendants by reason of the alleged dishonesty on the part
of one of defendant for which plaintiff
argued. That can be decided
by the trial court.
27.
I have decided that,
since seeking of one or more amendments is an indulgence and since
defendants’ opposition was not without
merit and since that
opposition might yet even translate into an exception or into a
successful defence to the action itself, that
the costs of this
interlocutory application should be reserved. The trial court can
decide what merit there has been in the amendments
and what merit
there was in the opposition thereto.
ORDER
It is
ordered that:
1.
Paragraph 8 of
plaintiff’s particulars of claim are deleted and the new
paragraph 8 (including 8.1, 8.2, 8.3, 8.4, 8.5) are
substituted
therefore.
2.
Annexures POC 1A,
POC1B, POC1C are added to the particulars of claim.
3.
The costs of this
opposed application are reserved.
DATED
AT JOHANNESBURG 23
rd
AUGUST 2016
____________________
SATCHWELL
J
Counsel
for Plaintiff: Adv J Muller SC and with him Adv A D Brown.
Attorneys
for Plaintiff: Minde Schapiro & Smith.
Counsel
for Defendant: Adv N Segal.
Attorneys
for Defendant: Cranko Karp & Associates Inc.
Dates
of hearing: 16
th
August 2016.
Date of
judgment: 23
rd
August 2016.
[1]
Cross
v Ferreira
1950 (3) SA 443
(C) at 447.
[2]
Whittaker
v Roos and another; Morant Roos and another
1911 TPD 1092
at 1102-3. See also
J
R Janisch (Pty) Ltd v W M Spilhaus & Co (WP) (Pty) Limited
1992 (1) SA 167
(C) at 169.
[3]
At
paragraph [50].
[4]
Nor does
it apply in the case presently under consideration.