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[2010] ZAGPJHC 63
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Geodis Wilson South Africa (Pty) Ltd v ACA (Pty) Ltd and Others (2008/41609) [2010] ZAGPJHC 63 (30 August 2010)
SOUTH GAUTENG HIGH COURT,
JOHANNESBURG
CASE NO
:
2008/41609
DATE:30/08/2010
In the matter between:
GEODIS
WILSON SOUTH AFRICA (PTY) LTD
Plaintiff
and
ACA (PTY)
LTD
First Defendant
(In Liquidation)
LEWITTON,
ANDREW ARTHUR
Second Defendant
STEINBERG,
COLIN
Third Defendant
J U D G M E N T
MBHA, J
:
INTRODUCTION
[1] The
plaintiff sued all
three defendants jointly and severally, for payment of the amount of
R4 520 611,65 plus interest and costs.
[2] The claim
against the first defendant is a contractual claim (“
the
main agreement
”)
for payment for services rendered and disbursements made on its
behalf, by the plaintiff.
[3] The
second and third defendant
s
bound themselves as sureties and co-principal debtors
in
solidum
with the first defendant, for all debts that the first defendant owed
to the plaintiff. The plaintiff’s claim against the
second and
third defendants is, accordingly, based on a contract of a
suretyship.
[4] The
matter became defended
and all three defendants subsequently served their pleas. However,
on 31 March 2009 the first defendant was finally placed in
liquidation and is accordingly no longer involved in the present
litigation.
[5] The third
defendant raised,
inter
alia
,
a special plea alleging:
That the
main agreement and the suretyship, as pleaded by the plaintiff
constituted, both individually and cumulatively, as
against the
third defendant, a credit agreement for the purposes of the
National Credit Act No. 34 of 2005 (“
the
Act
”);
The third
defendant wa
s
a consumer in default under a credit agreement for purposes of the
Act;
That prior
to causing summons to be issued, the plaintiff failed to deliver a
notice contemplated in section 129(1) of the Act
to the third
defendant; and that
A
ccordingly,
the plaintiff was not entitled to commence any legal proceedings to
enforce the credit agreement against the third
defendant.
[6] The
matter was enrolled for trial on 4 August 2010. However, the
plaintiff launched a substantive application asking for a
separation
of certain issues that existed on the pleadings. These issues flowed
from the allegations or denials in the pleadings
regarding the
applicability of the Act, to the proceedings against the second and
third defendants.
[7] This
application served before Lamont J on 1 June 2010 who, after hearing
argument, made an order that the issues regarding
the applicability
of the Act, are to be determined separately from all other issues in
the action between the parties on 4 August
2010. The determination
of all the other issues between the parties was postponed
sine
die
.
ISSUES FOR DETERMINATION
[8]
The
issues that must be determined are twofold, namely:
Whether or
not the provisions of the Act are applicable to the proceedings
between the plaintiff and the defendants in the main
action;
Whether
or not the plaintiff was obliged to give notice to the second and
third defendants in terms of section 129 of the Act, prior
to the
institution of the action.
[9] I should
mention that on 30 July 2010 the third defendant, who raised the
issues, delivered a notice that he abides the decision
of this Court.
[10] There
are two contracts that have to be considered in this matter, namely
the main agreement between the plaintiff and the
first defendant, in
terms of which the plaintiff undertook to render certain services and
make disbursements on behalf of the first
defendant, and the
suretyship agreement between the plaintiff and the second and third
defendants in terms of which each of them
bound themselves as surety
and co-principal debtor, jointly and severally with the first
respondent, for payment of all the debts
of the first respondent.
[11] The
plaintiff submitted
that the provisions of the Act are not applicable to either the main
agreement or the suretyship for the following reasons:
The first
defendant is a juristic person whose annual turnover at the time
the agreement was concluded, equalled or exceeded
the threshold
value of R1 million determined by the Minister in terms of section
7(1) of the Act.
By virtue of
the provisions of section 4(1)(a)(i) of the Act, the provisions of
the Act do not apply to the main agreement.
By virtue of
the provisions of section 8(5) of the Act, the provisions thereof
do not apply to the suretyship.
[12] Section
129(1) of the Act requires a credit provider to comply with certain
procedures before commencing legal proceedings
against a defaulting
consumer. The credit provider is specifically required to give the
defaulting consumer a written notice advising
him or her to refer the
credit agreement to a debt counsellor, alternative dispute resolution
agent, consumer court or ombud with
jurisdiction, with the intention
that the parties resolve any dispute under the agreement, or develop
and agree on a plan to bring
the payment under the agreement up to
date.
[13] It is
common cause that the plaintiff did not give a notice in terms of
section 129(1) of the Act to any of the defendants.
[14] Section
4(1) of the Act provides
that
the Act applies to every credit agreement between parties dealing at
arm’s length and made within, or having any effect
within the
Republic. Exceptions are created in respect of certain agreements
which are specified as follows:
“
(a)
A credit agreement in terms of which the consumer is –
a juristic person whose asset value or annual turnover, together
with the combined asset value or annual turnover of all related
juristic persons, at the time the agreement is made, equals or
exceeds the threshold value determined by the Minister in terms
of
section 7(1);
…
A large
agreement, as described in section 9(4), in terms of which the
consumer is a juristic person whose asset value or annual
turnover
is, at the time the agreement is made, below the threshold value
determined by the Minister in terms of section 7(1)
…
”
[15] In terms
of section 7(1) of the Act, the threshold value that has been
determined by the Minister, as on the effective date,
is the monetary
asset value or annual turnover of not more than R1 million.
[16]
Furthermore, a “
large
agreement
”
refers,
inter
alia
,
to instances where the principal debt under a relevant transaction or
guarantee, falls at or above the higher of the thresholds
established
in terms of section 7(1) of the Act.
[17] It is common cause that:
The terms of the main agreement between the plaintiff and the first
defendant, and as specifically pleaded by the plaintiff,
is a
credit agreement as defined in the Act.
The
existence of the debt as alleged by the plaintiff, is accepted by
the defendants.
Annexure “C”
to the particulars of claim is a true copy of the suretyship on
which the plaintiff relies.
Both the
second and third defendants signed the suretyship and it is valid
in all respects.
The first defendant was at all material times a juristic person as
defined in section 1 of the Act.
The first defendant’s annual turnover exceeded R1 million per
year.
[18] As the
first defendant was a juristic person whose annual turnover was not
less than R1 million per year, it follows that
the provisions of
section 4(1)(a)(i), the Act do not apply to the main agreement.
[19] Section
8(5) of the Act provides that an agreement, save for the type of
agreement specified in subsection (2), for example,
a policy of
insurance, a lease of immovable property or a transaction between a
stokvel and a member of that stokvel, constitutes
a credit guarantee
if “…
in
terms of that agreement, a person undertakes or promises to satisfy
upon demand any obligation of another consumer in terms of
a credit
facility or a credit transaction to which this Act applies
”.
[20] I do not
have the slightest doubt that the obligations under a contract of
suretyship, fall squarely within the definition
of a credit agreement
which encompasses a credit guarantee. However, section 8(5)
specifically requires the credit guarantee to
apply to the
obligations of another consumer in terms of a credit transaction to
which this Act applies.
[21] As I have
already found that the Act does not apply to the main agreement
between the plaintiff and the first defendant, the
obligations of the
first defendant to the plaintiff were not incurred in terms of the
credit transaction to which the Act applies.
[22] Accordingly,
it follows that the second and third defendants cannot claim that the
Act applies to them on the basis that their
obligations arise in
terms of a credit guarantee as set out in section 8(5) of the Act.
Section 8(5) specifically requires the
guarantee to apply to the
obligations of another consumer in terms of a credit transaction to
which this Act applies.
[23] The
third defendant has apparently placed reliance on the fact that he is
“
a
consumer in default
”
under a credit agreement for the purposes of the Act. In my view,
the third defendant seeks to assert the independent status
of debtor,
as opposed to being a surety, and then to argue that the Act applies
to him and his credit agreement.
[24] The
Appellate Division (as it then was) dealt conclusively with this
reasoning in the case of
Neon
and Cold Cathode Illuminations (Pty) Ltd v Ephron
1978 (1) SA 463
(A) at 471, where Trollip J A held that credit was in
fact not granted to the second respondent, who was a surety, and that
the
loan finance granted and the mortgage bond agreement existed
between the appellant and the first respondent, the principal debtor.
The learned Judge held that the credit was not advanced to the second
respondent, that the second respondent did not become a party
to the
contract between the appellant and the first respondent, and
therefore did not contract with the appellant to acquire any
credit
himself.
[25] Clearly,
in
casu
,
the third defendant signed as surety and co-principal debtor. The
plaintiff’s right of enforcement against him arises from
the
contract of suretyship. The main agreement is separate and distinct
from the suretyship agreement. See further in this regard
Firstrand
Bank Ltd v Carl Beck Estates (Pty) Ltd and Another
2009 (3) SA 384
(T) at paragraphs [20] to [23].
[26] It
follows that the third defendant was sued as a guarantor to the first
defendant’s obligations, in terms of a credit
transaction to
which the Act does not apply. He was accordingly not entitled to
receive notice in terms of section 129 of the
Act. The suretyship
clearly falls outside the ambit of the Act.
[27] I
accordingly, make an order as follows:
1. It is declared:
That the
provisions of the
National Credit Act 34 of 2005
, are not
applicable to the proceedings between the plaintiff and the
defendants in the action under Case No. 2008/41609.
That the
plaintiff was not obliged to give notice to the second defendant
and third defendant in terms of
section 129
of the
National Credit
Act 34 of 2005
, prior to the institution of the action under Case
No. 2008/41609.
The third
defendant’s special plea is dismissed.
The third
defendant is ordered to pay the plaintiff’s costs incurred in
connection with the determination of the issues
regarding the
applicability of the
National Credit Act 34 of 2005
to the
proceedings under Case No. 2008/41609 (including the costs incurred
in connection with the special plea but excluding
the costs of the
application for the separate determination of issues brought before
Lamont J on 1 June 2010.)
_____________________________
B
H MBHA
JUDGE OF THE SOUTH GAUTENG
HIGH COURT, JOHANNESBURG
COUNSEL FOR PLAINTIFF : CJ
GROBLER
INSTRUCTED BY : V WERTH &
ASSOCIATES
COUNSEL FOR SECOND DEFENDANT : S
STEVENSON
INSTRUCTED BY : REITZ
ATTORNEYS
DATES OF HEARING : 04 AUGUST
2010
DATE OF JUDGMENT :30 AUGUST
2010