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[2017] ZAGPJHC 378
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Hudson v Fedbond Nominees (Pty) Limited (2004/13659) [2017] ZAGPJHC 378 (6 March 2017)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO:2004/13659
Not
reportable
Not
of interest to other judges
Revised.
6
March 2017
In
the action between:
HUDSON:
LESLIE
GEORGE
Plaintiff
and
FEDBOND
NOMINEES (PTY)
LIMITED
Defendant
JUDGMENT
VICTOR
J
This
is a reconstructed judgement from notes taken by parties during the
handing down of the judgment. The parties have agreed the
content and
have handed me a document from which I construct this judgment. The
court file was lost as well as the audio file.
[1]
The principal issue for determination in this action is whether the
judgment debt of Dalmation Properties (Pty) Ltd in the amount
of R1
492 583.48 together with interest at the rate of 21.53% per annum
from 1 January 1998 to date of payment has been discharged
by the sum
total of the payments received by the Defendant from the plaintiff
towards the discharge of the judgment debt. The Plaintiff
is Mr
Hudson who together with a Mr Giddy bound themselves as sureties and
co-principal debtors on behalf of the indebtedness of
Dalmatian
Properties (Pty) Ltd for an amount of R1 300 000.
[2]
Judgment was entered against Dalmatian on 24 February 1998 following
an application launched at the instance of Fedbond in amount
of R1
492 584,08 plus interest at the rate of 21,53% per annum calculated
from 1 January 1998 to date of final payment, an order
declaring the
certain property executable. At the same time an order was obtained
against the Mr Giddy and the plaintiff in the
sum of ‘R650 000
payable jointly and severally with the First Respondent the one
paying the other to be absolved’.
[3]
The Plaintiff’s liability in this matter was limited to a sum
of R650 000.00. It is trite that the discharge of Dalmatian’s
liability following the payment of the indebtedness arising out of
payment of the principal judgment would have had the effect
of
extinguishing the Plaintiff’s liability to Fedbond.
Obviously the indebtedness of the surety, that is the Plaintiff,
is
accessory in nature and is discharged where the principal debt has
been discharged. See
Colonial
Government v Edenborough and Others
(1886)
4 SC 290
at 296 and
Kilburn
v Tuning Fork (Pty) Ltd
2015 (6) SA 244
(SCA)
[4]
To the extent therefore that Dalmatian’s liability to Fedbond
is discharged the same consequences will follow for the
Plaintiff
provided that principal judgment and the ancillary judgment debts are
discharged in total. This has not been the
case.
[5]
This matter has a long history and the parties have been engaged in
litigation since 1997 resulting in a sequestration application
being
brought against the Plaintiff during 2003 for his alleged failure to
satisfy the ancillary judgment entered against him in
his capacity as
surety and co-principal debtor. That sequestration application
was not pursued to its finality and was withdrawn.
Fedbond, however
Fedbond continued with their claim despite not progressing the
sequestration application by issuing a writ against
the Plaintiff in
the sum of R650 000.00 against the attachment of his movables.
By this stage the plaintiff had personally
paid R247 000.00 towards
the satisfaction of the same judgment.
[6]
The problem between the parties did not end there. The
litigation continued between the parties and in August 2005 the
Plaintiff and Defendant agreed to refer the calculation of
Dalmatian’s indebtedness in terms of section 19
bis
of the High Court Act No. 59 1959 to a referee. This was made an
order of court. Section 19
bis
of the Supreme Court Act 59 of 1959 provides for the appointment of a
referee to enquire and report upon, inter alia, a matter
which
relates wholly or in part to accounts. Mr Jappie Van der Laan, a
referee was duly appointed and on 20 October 2009 he provided
his
final report. On 22 September 2011 the Defendant enrolled the
matter for trial for hearing on 1 August 2012 on which
date the
following order was made by agreement between the parties – the
matter was postponed
sine
die
,
costs reserved. The Plaintiff was ordered to amend his particulars of
claim by filing a notice of intention to amend and the defendant
was
ordered to amend its plea within twenty days of delivery of the
amended pages.
[7]
I heard the evidence of the Plaintiff. I also heard the evidence of
Mr Van de Laan, the referee. The Plaintiff spent a
lot of time
in his testimony taking the court through each and every calculation
in order to demonstrate that the referee had not
come to the correct
finding. That evidence dealt not only with his indebtedness but
also the indebtedness of the principal
debtor, Dalmatian. The
Plaintiff referred to a lot of irregularities and monies that he had
paid to the late Mr Lebos and
he claimed that there were some
underhand negotiations between the parties and used an example that
Fedbond had not pursued the
action against Mr Giddey who was also a
surety in the Dalmatian debacle. Dalmatian was liquidated
finally in 1999 and the
referee had to consider all the costs and all
the monies that had been paid including the interest. It was the
Plaintiff’s
case that Mr Van der Laan had not taken all the
factors into account. When Mr Van der Laan testified he proved
his expertise.
He took the court through all the steps that he
had taken and testified that he had engaged with the parties, that he
had engaged
with Mr Lebos and that he had engaged with Fedbond, and
had gone back to Mr Lebos with the Plaintiff. I get the impression
that
Mr Van de Laan has gone a long way to try and resolve the issue
and the particular errors that the Plaintiff had raised.
[8]
Mr Van de Laan took the court through the papers, bearing in mind
that the parties had committed themselves to the referee procedure
in
terms of section 19 bis. It is clear that only under exceptional
circumstances can the court deviate or disregard the findings
of a
referee.
[9]
In the case of
Perdikis v Jamieson
2002 (6) SA 356
(W)
paragraph 17 Boruchowitz J stated the following:
‘
It was held in Bekker v RSA
factors
1983 4 SA 568t
that a valuation can only be rectified on
equitable grounds where the valuer does not exercise the judgment of
a reasonable man
that if his judgment is exercised unreasonably,
irregularly or wrongly so as to lead to a patently inequitable
result.’
[10]
In
Wright
v Wright & Another
2015
(1) SA 262
(SCA) Majid JA stated the following in respect of
the referees report:
‘
Unless
and until it was properly imbued on the narrow grounds it stood as
the courts factual findings upon adoption without modification.
It was not for the First Respondent to persuade the High Court that
the referee’s report and the factual findings were correct.
That would subvert the purpose of this section. The referee had
been appointed by consent between the parties to facilitate
the High
Court’s task of resolving the factual issues from the
accounting debatement as the High Court was called upon to
do.
The Appellant held the duty of impugning the factual findings or to
raise genuine disputes of fact. It is legally untenable
to approach
the matter like the Appellant did namely to treat the referee’s
report as it if was the Respondent’s factual
version which had
to be attested against the Appellant’s factual version.
This is not the manner in which the section
is to operate.’
[11]
It is the plaintiff who challenges the Referee’s report and it
is the plaintiff who bears the onus to demonstrate that
the referee,
Mr Van de Laan, exercised his judgment unreasonably, irregularly or
wrongly so as to lead to a patently inequitable
result. Having
regard to the evidence of Mr Van de Laan and the careful calculations
that he did, the procedures that he
adopted after he had considered
to the Plaintiff’s arguments during the course of that
investigation, it is clear to me that
Mr Van der Laan’s report
does not lead to any patently inequitable results. I cannot find that
his judgment is wrong.
The very calculations in question are
the very calculations that the court referred to the referee.
It was the job of the
referee. By way of example, the referee’s
report refers to previous correspondence; he refers to the audit
report and to
the terms of reference. He concluded that the Plaintiff
is indebted to the Defendant in the amount of R810 881.82. That
amount
was reflected as owing by Dalmation as at February 2002 and it
was prepared on the basis of calculation 1. The referee’s
analysis is set out demonstrating the various bases. Basis 1 is the
most conservative calculation and favours the plaintiff.
“
With reference to the Order of
the Court and previous correspondence etc., I hereby issue my revised
final account and report. The
calculation on Basis 1 indicates that
the Plaintiff is in debt to the Defendant to the amount of R810,
881.82… The calculation
on Basis 2 indicates that the
Plaintiff is in debt to the Defendant to the amount of R955, 017.87…
The calculations for
clause 3 indicate that if the Plaintiff’s
debt to the Defendant is reduced to the amount due by Dalmation,
whenever the amount
due by Dalmation is less that the amount due by
the Plaintiff, the amount owing by the Plaintiff to the Defendant
amounts to R498,
945.02. If no such deduction is made to the debt of
the Plaintiff, the amount due by the Plaintiff to the Defendant
amounts to
R1,512,354.11.”
The
amount reflected as owing by Dalmation as at the end of February 2009
exceeds the R403 000.00 presently owed by the Plaintiff
in terms of
the judgment against him. The Plaintiff is in no position to place
any reliance on the discharge or reduction of the
amount of the
principal debt owing in order to escape his own liability.
[12]
No further payments have been made and interest on the principal
judgment has continued to run. The current amount owing is
according
to the Defendant significantly higher. The Defendants make the
case that because Dalmatian remains indebted to
the Defendant in the
amount of the principal judgment and notwithstanding that Fedbond has
received payments totalling R3 410 051.90
according to the referee
towards the discharge of R1 492 585.08 there is still an amount owing
since the interest continues to
run. According to the referee’s
final report, payments made towards the discharge of the principal
debt, which includes
rental received, amounted to only R982 929.94.
[13]
Therefore I find that the Plaintiff incorrectly described the
payments. The gross amount of the proceeds of the sale
of the
property to MacSteel and the amount of R144 621.96 which was
described in the report as being for repairs and rent, there
was not
a debit which was to be reversed in the credit line that is line
twenty seven on the basis one of the calculation.
This court
cannot repeat the referee’s analysis in great detail but at the
end of the day, it is not the duty of this court
to overturn the
referee’s report, I can only do so on that very narrow basis to
which I have referred. In any event having
regard to such testimony
as Mr Van de Laan did give in relation to how he arrived at the
calculations the court cannot find any
patent incorrectness and
therefore I cannot find as set out in Perdikis v Jamieson and in
Wright that there is a patently inequitable
result. The Plaintiff’s
claim has therefore failed.
[14]
There is the question of the various costs orders that have been made
throughout the litigation for example the costs were
reserved on the
30th of August 2012 where the action was postponed sine die and it is
the Defendant’s case that those costs
should follow the result
in this present action and that this court should order judgment
against the Plaintiff in relation to
the postponement sine die
costs. The parties when they have referred the matter to the
referee the costs were ordered to
be costs in the cause and therefore
the costs should follow the result in the present application. The
court is not appraised of
all the various hearings but the order that
I will make is that the action is dismissed with costs which shall
include the postponement
costs of the 1st of August 2012, as they
have been fully addressed. The remaining costs shall be costs in the
cause.
PRESENT:
Judge
Victor (“JV”)
Court
Official (“CO”)
Advocate
Barry Edwards for Plaintiff (“BE”)
Advocate
Jonathan Hoffman for Defendant (“JH”)