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[2010] ZAGPJHC 135
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Slip Knot investments 777 (Pty) Limited v Coronado Trading 150 CC and Others (16108/2009) [2010] ZAGPJHC 135 (3 November 2010)
Links to summary
IN THE
SOUTH GAUTENG HIGH COURT
(JOHANNESBURG)
CASE NO
16108/2009
Date: 03/11/2010
In the matter between
SLIP
KNOT INVESTMENTS 777 (PTY) LIMITED
APPLICANT
And
CORONADO
TRADING 150 CC
.
FIRST RESPONDENT
QUENTIN
BROWN
SECOND
RESPONDENT
CRESTLEIGH
TRADING (PTY) LIMITED
THIRD RESPONDENT
EUGENE
BOSHOFF
FOURTH
RESPONDENT
NATIONAL
CREDIT REGULATOR
FIFTH RESPONDENT
MINISTER
OF TRADE AND INDUSTRY
SIXTH RESPONDENT
J U D G M E N T
VAN
OOSTEN J
[1]
This is an application in which the applicant seeks payment by the
first, second and third respondents of the sum of R24 051
493.03
together with interest thereon as well as an order that a certain
immovable property, registered in the first respondent’s
name,
be declared executable.
[2]
The applicant’s claim is based on a written loan agreement
concluded on 25 January 2008 between the applicant, as the
lender,
the first respondent (Coronado) as the borrower, and the deed of
suretyship signed pursuant thereto by the second respondent
(Brown),
the third respondent (Crestleigh Trading) and the fourth respondent
(Boshoff).
[3]
Brown and Boshoff are the only members of Coronado. Brown is a
director of Crestleigh Trading.
[4]
The application was initially opposed by Coronado, Brown and
Crestleigh Trading. The only defence they rely on consists of a
constitutional challenge of certain of the provisions of the National
Credit Act 34 of 2005 (the NCA). This prompted the joinder
(by
agreement between the parties) of the National Credit Regular (the
NCR) as the fifth respondent and the Minister of Trade and
Industry
as the sixth respondent. Their participation in these proceedings is
limited to the constitutional challenge to which
I will refer in more
detail, later in the judgment.
[5]
No relief is sought against Boshoff, who was joined in the
application merely because of the interest he as a member of
Coronado,
might have in the outcome thereof. He did however enter the
fray albeit at a much later stage. As this aspect will assume
importance
later in the judgment it is necessary to briefly refer to
Boshoff’s explanation for the belated opposition to the
application.
The application papers were served on Boshoff’s
erstwhile attorneys, TG Bosch-Badenhorst, on 24 April 2009.
Boshoff
states in the affidavit I will presently deal with, that he
“had not read the application at the time” and that he
was advised by his attorneys “that it was not necessary for me,
in my capacity as the fourth respondent, to oppose the application”.
He further states that he accepted the advice in good faith. He
accordingly did not oppose the application. Some 13 months later,
during May 2010, he casually mentioned the application to a friend
who advised him there and then to obtain a copy of the papers
from
the attorneys. He then instructed his present attorneys of record and
a copy of the application was obtained. On reading the
application,
he, for the first time, discovered that the loan transaction, which
is the subject matter of this application, was
tainted with fraud
which he maintains was perpetrated by Brown. On 16 July 2010 Boshoff
launched an application in terms of s 36
of the Close Corporations
Act 69 of 1984 (the s 36 application) against Brown, seeking the
cessation of Brown’s membership
in Coronado. Boshoff’s
attorneys then sought a postponement of the present application in
order to first finalise the s 36
application. This was refused. This
prompted Boshoff to launch an urgent application to this court on 29
July 2010 seeking a stay
of the present proceedings. The application
was however, struck from the roll for want of urgency.
[6]
On 2 August 2010 Boshoff filed an answering affidavit in the present
application.. It was accompanied by a Notice of Application
in terms
of s 64 of Act 69 of 1984, in which he seeks relief to the effect
that Brown be held personally liable for any debt or
liability of
Coronado that this court may find in the present application (the s
64 application).
[7]
Both Boshoff’s answering affidavit and the accompanying s 64
application were served well out of time. No formal application
for
condonation has been lodged. The procedural status of the s of the s
64 application is shrouded in uncertainty: it stands on
its own and
has not been introduced as a counter-application. The applicant as
well as the first, second and third respondents
have filed answering
affidavits to the s 64 application. It to a large extent overlaps
with and duplicates the s 36 application
in which a full set of
affidavits has by now been filed. Notwithstanding these difficulties
I decided in order to reach finality
and in the interests of justice
to proceed with the hearing of the matter. At the commencement of the
hearing I was requested in
view of the irresoluble factual disputes
existing on the papers and as agreed between the parties, to refer
the s 36 application
for trial. I accordingly in that matter granted
an order for its referral to trial in terms of a draft order agreed
upon between
the parties.
[8]
To revert to the present application, it came up for hearing before
Bailey AJ on 25 August 2010. The learned Judge granted an
order by
consent between the parties in terms of which the matter was
postponed
sine
die
,
the fifth and sixth respondents were joined in this application and
the filing of further affidavits by the parties was authorised.
As to
costs, Boshoff was ordered to pay the applicant’s wasted costs
occasioned by the postponement whilst the wasted costs
of the first,
second, third and fifth respondents were reserved. This is one of the
issues I am now required to determine and to
which I will return in
due course.
[9]
Against this background I now turn to the merits of the present
application. A number of issues arise for consideration. The
first is
the sustainability of the first, second and third respondents’
constitutional challenge of certain provisions of
the NCA. The fourth
respondent disassociated himself from this issue and abides the
decision of this court. The second is whether
the fourth respondent
has raised sustainable defences on behalf of Coronado, against the
applicant’s claim. The third issue
concerns the fourth
respondent’s s 64 application and the fourth, a portion of the
interest component of the applicant’s
claim in particular
having regard to the provisions of the Conventional Penalties Act 15
of 1962. The fifth and final issue relates
to the liability for the
costs of this application, as well as the costs relating to the
constitutional challenge, the costs of
the s 64 application and as
mentioned earlier, the costs reserved by Bailey AJ on 25 August 2010.
I consider these issues in turn.
THE
CONSTITUTIONAL CHALLENGE
[10]
It is not in dispute that the first, second and third respondents
(referred to under this heading as “the respondents”)
are, by virtue of certain provisions of the NCA, excluded from the
protection afforded by the NCA.
[1]
It is their contention,
in a nutshell, that their exclusion from the NCA protection is
unjustified and unreasonable and therefore
unconstitutional. In
support of the contention the respondents rely on the right to
equality
before the law provided for in s 9(1) of the Constitution. The order
sought accordingly is for this court to declare that
all the
provisions contained in ss 1, 4, 6, 7, 8, 9 and 78(1) of the NCA
having the effect of excluding or limiting the right to
equal
protection and/or benefit afforded by the NCA are inconsistent with
the Constitution and therefore invalid.
[11]
At the outset I raised with counsel for the respondents my concern
whether it was competent for this court to decide the constitutional
challenge concerning certain provisions of the NCA in view of the
common cause fact that the NCA is not applicable to the facts
of this
matter. Counsel however, was unable to offer any meaningful
contribution on this aspect. In the absence of full argument
on this
aspect I have decided to accept (without deciding) in favour of the
respondents that the constitutional issue is properly
before me for
determination. But, counsel for the respondents then had to cross
another hurdle: almost identical challenges have
already been
rejected not only by the High Court (twice), but also by the Supreme
Court of Appeal as well as the Constitutional
Court. First, the High
Court cases. In
Standard
Bank of South Africa Ltd v Hunkydory Investments 194 (Pty) Ltd and
Another (No 1)
2010
(1) SA 627
(C) an identical challenge
[2]
was
raised but dismissed by Steyn AJ (as she then was) for the
following reasons:
[3]
‘
There
can be no doubt that there is a rational connection between the
differentiation created by the relevant provisions of
section 4
of
the
National Credit Act and
the legitimate governmental purpose
behind its enactment. I have not been persuaded, on a balance of
probabilities, by the defendants,
who bear the onus in this regard,
that any differentiation or discrimination, even if it exists, is
unfair. I have not been persuaded
that the first defendant’s
[4]
exclusion
from the protection of the relevant sections of the Act has any
negative effect on it.’
An
application for leave to appeal by the defendants in that matter was
unsuccessful as was the further petition for leave to appeal
to the
Supreme Court of Appeal. The defendants then applied for leave to
appeal to the Constitutional Court which again was dismissed
with
costs on 7 May 2009.
[5]
In a
subsequent separate case,
[6]
a
different company (also called
Hunkydory
Investments
)
sought
to raise the same constitutional challenge. Rogers AJ with reference
to the first
Hunkydory
matter
and its fate thereafter in the highest courts of our land, held that
the constitutional challenge was bad in law and dismissed
it with
costs.
[12] I respectfully
associate myself with the reasoning as well as the conclusion reached
in both the High Court cases I have referred
to. The Constitutional
Court having considered the application for leave to appeal dismissed
it on the basis of it bearing no prospects
of success. Counsel for
the respondents attempted to distinguish
Hunkydory
from the
present matter in submitting that Steyn AJ did not specifically deal
with the constitutionality of the NCA’s exclusion
of private
individuals from its protection. The argument resulted from a
misreading of the judgment in
Hunkydory
this aspect was
specifically addressed by the learned Judge in relation to the second
defendant in that matter. The circumstances
and principles applicable
in both matters are identical. Counsel was ultimately constrained to
concede that the constitutionality
of the NCA exclusion of at least a
juristic person has now finally been resolved and is therefore
binding on this court, but then
proceeded to direct the focus of his
argument to the exclusion of natural persons having bound themselves
as sureties to entities,
from the protection of the NCA. The
constitutional issue was fully argued before me and I think it
prudent to briefly add my own
reasoning for having arrived at the
same conclusion than in the other matters.
[13]
The respondents’ constitutional challenge as I have mentioned,
rests on a single section of the Constitution (s 9(1))
which
guarantees equality before the law. The test for whether a
statute violates section 9(1) has been stated by the Constitutional
Court
[7]
as
follows
[8]
:
‘
The
test for determining whether s 9(1) is violated was set out by the
court in Prinsloo v Van der Linde and Harksen v Lane.
[9]
A law
may differentiate between classes of persons if the differentiation
is rationally linked to the achievement of a legitimate
government
purpose. The question is not whether the government could have
achieved its purpose in a manner the court feels is better
or more
effective or more closely connected to that purpose. The question is
whether the means the government chose are rationally
connected to
the purpose, as opposed to being arbitrary or capricious.’
Accordingly,
for the constitutional challenge to succeed, it must be shown that
there is no rational basis for differentiating between
natural
persons and juristic persons under the NCA. In this regard it is
important to bear in mind that the requirement of
rationality
is not
the same as a requirement of
reasonableness
.
Rationality is a lower standard than reasonableness. It is not the
function of the courts to review laws for reasonableness.
[10]
As
correctly pointed out by counsel for the NCR and the Minister the
requirement of rationality is an extremely low one that virtually
all
legislation will overcome.
[14]
There has thus far only been one case in which a rationality
challenge to a certain section of legislation has succeeded in
the
Constitutional Court. The matter
[11]
concerned
a challenge to certain distinctions drawn in the Matrimonial Property
Act. There however, the Minister of Justice, who
was responsible for
the administration of the Act, explicitly conceded that the
distinctions drawn were out-dated and irrational
and himself
supported a declaration of invalidity.
[15]
By contrast, the Constitutional Court has dismissed the challenge in
each and every other case challenging legislation or regulations
on
the grounds of irrationality, whether relying on sections 1(c), 9(1)
or 22 of the Constitution.
[12]
[16] Turning now to the
impugned provisions of the NCA. In terms of s 4, the NCA applies to
all credit agreements where the consumer
is a natural person but not
to any credit agreement where the consumer is a juristic person whose
asset value or annual turnover
is more than R1 million (s 4(1)(a));
or any large credit agreements where the consumer is a juristic
person whose value or annual
turnover is less than R1 million
(section 4(1)(b)) and any credit guarantee (suretyship) in respect of
a credit agreement to which
the Act does not apply. The question is
whether the exclusion of agreements by juristic persons is rationally
connected to a legitimate
governmental purpose. In this regard, the
following extract from the affidavit filed on behalf of the NCR, is
instructive:
‘
The
dual purpose was therefore to protect individual consumers against
abuse but not to impose regulatory burdens which may limit
the
availability of credit to small businesses. The evaluation of the
ability of an individual consumer to bear the burden of a
credit
agreement is entirely different from the assessment of business risks
relating to proposed business opportunities that a
small business
wishes to pursue. It is in the interests of the individual consumer
that there is consistent, easy to understand
documentation and limits
on costs, interest rates and enforcement processes. On the other
hand, in order to allow entrepreneurship
to flourish among small
businesses, flexibility is needed in lending money to establish such
flourishing businesses.
The thresholds for
juristic persons were put in place in order to promote that
particular policy. It would not be appropriate for
a person who has
the sophistication, means and specific intention to plan their
affairs to gain various advantages of being a juristic
person,
simultaneously to gain access to the redress mechanisms created under
the National Credit Act for the benefit of natural
persons. A
consumer is given the very choice that the Act intends. The consumer
can enter into the credit agreement in his or her
personal capacity
as a natural person and gain the protection of the
National Credit
Act. Alternatively
the consumer can set up corporate structures in
order to gain asset protection afforded by the fact that the
purchaser is a juristic
person...”
The limited exclusion of
agreements by juristic persons is therefore an attempt to further the
object of protecting individual consumers
against abuse, while
avoiding the imposition of regulatory burdens which may limit the
availability of credit to small businesses.
This is plainly a
legitimate governmental purpose and the limited exclusions provided
for in the NCA in my view, are rationally
connected to this purpose.
[17] The respondents’
constitutional challenge is accordingly dismissed.
[18]
It remains to deal with the costs relating to the constitutional
challenge. Counsel for the NCR and the Minister submitted
that the
respondents’ persistence in the constitutional challenge in the
face of the rejection thereof by the courts I have
referred to, is
manifestly unreasonable which counsel contended justifies a punitive
costs order against them. The general approach
in constitutional
litigation is that a party will not be mulcted in costs where it
unsuccessfully raises a constitutional challenge.
[13]
However,
this approach does not apply where “an application is frivolous
or vexatious, or in any other way manifestly inappropriate”.
[14]
The
respondents’ optimism albeit misplaced, regarding the prospects
of successfully raising the constitutional challenge in
my view does
not justify a punitive costs order. It follows that a normal costs
order will be appropriate.
THE
FOURTH RESPONDENT’S “DEFENCES” RAISED ON BEHALF OF
CORONADO
[19]
Boshoff in his answering affidavit has in essence
raised one defence on behalf of Coronado. It concerns an
interpretation of certain
clauses of the loan agreement on which the
applicant’s claim is based. The conclusion of the loan
agreement is not in dispute.
It is moreover common cause between the
parties that subsequent to the conclusion of the loan agreement,
Brown in an e-mail to
Coronado dated 8 February 2008, requested
payment of the balance of the loan amount of R16m into the bank
account of Crestleigh
Trading, of which it will be recalled, he was
the director. The request was honoured. Boshoff now contends that the
payment did
not meet with the requirements set out in clause 3.1.7 of
the loan agreement and that it therefore was made “aliunde”
its terms.
Clause 3.1.7 of the loan agreement provides as
follows:
‘
3.1.7 the balance
of the loan amount, (being the loan amount less the payments in terms
of 3.1.1, 3.1.2, 3.1.3 and 3.1.6) or a portion
thereof, may at the
written request of the borrower be advanced by the lender to the
borrower on 1 February 2008, or such later
date agreed to by and
between the parities (sic), and will be paid into such bank account
as nominated by the borrower in writing.’
The
payment of the balance of the loan amount, as I have indicated,
occurred after 1 February 2008. Therefore, so the argument went,
the
“parties” within the meaning of the clause quoted, were
required to agree on the later date of payment. “Parties”
in terms of clause 1.16 of the loan agreement means “the
lender, the borrower, Brown, Boshoff and Crestleigh, either
collectively
or individually as the context may require”, The
absence of an agreement by those parties on the later date for
payment counsel
concluded, resulted in an unauthorised payment
extraneous the provisions of the loan agreement. The argument
is short-lived:
the definition of “parties” in the
definition clause must be read subject to the opening sentence of the
clause which
reads as follows:
‘
In
this agreement unless the context clearly indicates a contrary
intention the following expressions shall bear corresponding
meanings:…’
There
can be no doubt that “parties” within the context of
clause 3.1.7 plainly cannot have the extended meaning as
defined in
the definition clause. Clause 3.1.7 deals with payment to the
borrower of the loan amount and the reference to “parties”
in the clause is clearly to the parties directly involved in the
making of the payment. But counsel for Boshoff had another string
to
his bow: the payment according to the e-mail I have referred to, was
requested by Brown and therefore not the “borrower”
(Coronado) which again counsel submitted, falls foul of the express
provisions of clause 3.7.1 requiring payment to the borrower.
This
argument suffers the same fate than the first one: Brown was in terms
of a resolution of the members of Coronado (annexed
to the loan
agreement and signed by Boshoff) expressly authorised to act on
behalf of Coronado in concluding the agreement and
in particular “to
generally do everything that may be necessary for the implementation
of the abovementioned agreement”.
That indisputably included
the nomination of a bank account for payment of the loan amount.
[20]
The final submission advanced by counsel for Boshoff is this: on
Boshoff’s version concerning the alleged fraudulent
conduct of
Brown to which I will presently refer, Brown was not authorised to
agree to the payment as provided for in the
loan agreement, to
one Neethling of the sum of R185 000-00 as an “introduction
fee”. In the event of the applicant
succeeding in this
application, the amount of its claim so the argument went, should be
reduced with the amount of the introduction
fee. There is no merit in
the argument. The loan agreement was duly signed and executed: there
is nothing (except for the
ipse dixit
of Boshoff) to show that
the payment to Neethling was an unauthorised payment.
[21]
For these reasons I have come to the conclusion that Boshoff has not
made out any sustainable defence to the claim of the applicant
on
behalf of Coronado.
THE
FOURTH RESPONDENT’S S 64 APPLICATION
[22]
As mentioned the
s 64
application is based on the alleged fraud
committed by Brown and Brown’s consequent failure to protect
the interests of Coronado.
The
s 64
application as I have alluded to,
was served concurrently with Boshoff’s answering affidavit on 2
August 20101, some 15 months
after the main application was served on
his erstwhile attorneys. Boshoff’s explanation for the revival
of his interest in
the matter is anything but satisfactory. I have
difficulty in accepting that he, assuming that the fraud he now
relies upon had
been perpetrated, would not when the application was
served, at least have read the papers or enquired from his erstwhile
attorneys
about the nature of the application.
[23]
But it does not end there: Boshoff’s version leaves me with the
inescapable impression of a carefully crafted afterthought
in a
transparent attempt to avoid liability for the inevitable. He now
claims that Brown fraudulently transacted for the loan of
R18,5m
reflected in the loan agreement on terms markedly different from what
he and Brown had agreed upon. The verbal agreements
the two of them
had reached prior to the conclusion of the loan agreement, he states,
were to the effect that a loan would be secured
from the applicant
for R1m, which was the amount required by Brown to be paid as part of
the purchase price of the property they
had acquired for purposes of
a proposed development in partnership. Brown was to repay the R1m
over a period of 36 months. Boshoff
by then had already paid his
share of the purchase price in the sum of R1m. The property was
purchased, registered in the name
of Coronado and a mortgage bond was
registered in favour of the applicant over the property as security
for the loan granted in
terms of the loan agreement. Boshoff goes on
to state that they had further agreed that the loan would be obtained
for a further
“potential R16m” which was to be earmarked
for purposes of the proposed development of the property “if
and when
that was proceeded with”.
[24]
Boshoff admits that he signed and initialled the loan agreement where
he was required to do so, on 25 January 2008. He called
in his son
and one of his other employees to sign as witnesses. At the meeting
he “instructed” Brown to take the witnesses
through the
loan agreement and to explain to them the nature and import thereof,
which Brown “duly did”. Boshoff’s
version rests on
shaky foundations. Nothing short of disingenuous is his allegation
that clause 3.1.6 of the loan agreement was
blank at the time of
signature. The clause provides for the payment on the signature date
of an amount of R1m by the applicant
“for and on behalf of the
borrower”. The name and details of the bank account (of
Crestleigh Trading) for payment of
the amount of R1m have been
entered in manuscript and initialled next to it by all the parties
and witnesses to the agreement,
including Boshoff. Those details
Boshoff states had not been filled in at the time of signature of the
loan agreement but thereafter,
presumably by Brown who he asserts was
not authorised to do so. Boshoff further states that he clearly
recalls that pencil lines
had been drawn diagonally through the lines
where the information was to be inserted. The original loan agreement
was made available
at the hearing of this application for all to
scrutinize for any signs of such pencil lines. It manifestly does not
require the
eye of an expert to observe and I should add, no
contention to the contrary was advanced, that pencil lines or
imprints of erased
pencil lines are nothing but imaginary.
[25]
What is seemingly lacking from Boshoff’s version is an answer
to the obvious question prompted by his own version which
is whether
he had read the loan agreement prior to appending his signature
thereto. He evidently was concerned about the contents
of the
agreement which is the precise reason for instructing Brown to
explain to the witnesses the contents of the loan agreement.
The
notion of Boshoff not having read the agreement prior to signature or
for that matter, that he was unaware of the true terms
thereof, is so
farfetched and improbable that the mere mentioning thereof warrants
its rejection. His version finally, is difficult
if not wholly
impossible, to reconcile with his inexplicable silence and inaction
from the time of service of the application until
the filing of his
answering affidavit in August 2010.
[26]
For these reasons I conclude that the version of Boshoff is patently
untruthful and it is accordingly rejected as such. This
finding of
course decides the fate of the
s 64
application.
THE
INTEREST CLAIMED BY THE APPLICANT
[27]
The applicant claims interest on the amount claimed (R24 051 493.03)
at the rate of 1,5 % per week, calculated daily from 25
July 2008
(the date for re-payment of the loan amount stipulated in the loan
agreement) to date of payment. The loan agreement
and mortgage bond
provide for a rate of interest of 1,25% per week (in effect 65% per
annum) and for the recovery of penalty interest
becoming effective
from 25 July 2008 but then at an increased rate of 1,5% per week (in
effect 78% per annum). The respondents
take issue with the
“manifestly usurius” rates of interest which they allege
offend public policy. I agree. These rates
in my view indeed are
nothing but exorbitant. It is in any event conceded on behalf of the
applicant that the increased rate of
1,5% per week “constitutes
a factor which could potentially persuade a borrower to settle the
amount outstanding sooner than
later”. The increased rate of
interest the applicant states, “is merely designed to cover the
increases in the applicant’s
costs”. But, so the
applicant further concedes, there were no increased costs incurred
resulting from the non-payment. I
am accordingly satisfied that the
increased interest rate is a penalty clause which falls to be reduced
within my discretion, in
terms of the provisions of the s 1(1) of the
Conventional Penalties Act 15 of 1995
[15]
to the normal mora rate
of interest.
COSTS
[28]
The costs of the application are to be paid on the scale as between
attorney and own client as provided for in the loan agreement.
As for
the earlier costs reserved I am of the view that the first, second
and third respondents’ wasted costs occasioned
by the
postponement should follow the event.
[29]
It remains to deal with the costs of the fourth respondent’s s
64 application. A punitive costs order was sought by the
applicant
which in my view is justified having regard to the findings I have
made concerning his credibility.
[30]
In the result I make the following order:
1.
The first, second and third respondents are ordered to pay to the
applicant jointly and severally,
the one paying the other to be
absolved:
1.1 The sum
of R 24 051 493.03.
1.2
Interest on the amount in 1.1 above at the
rate of 15,5% per annum, calculated from 25 July 2008 to date of
payment.
Costs
of the application (including the costs reserved on 25 August
2010 but excluding the costs referred to in
4 below) on the scale as
between attorney and own client.
2.
The immovable property known as Portion 141 of the Farm Doornkuil
369, Registration Division IQ,
Province of Gauteng, (measuring
113,4082 hectares) held under Deed of Transfer T134498/07 is declared
specially executable.
The
fourth respondent’s application in terms of s 64 of Act 69 of
1984 is dismissed.
The
fourth respondent is ordered to pay the costs occasioned by the
applicant’s opposition to the fourth respondent’s
application in terms of s 64 of Act 69 of 1984 on the scale as
between attorney and own client.
The
first, second and third respondents are ordered to pay jointly and
severally the one paying the other to be absolved, the costs
occasioned by the fifth and sixth respondents’ opposition to
the constitutional challenge.
FHD VAN OOSTEN
JUDGE OF THE HIGH COURT
COUNSEL
FOR THE APPLICANT
ADV AC
BOTHA
APPLICANT’S
ATTORNEYS
SIM
& BOTSI ATTORNEYS INC
COUNSEL
FOR FIRST SECOND & THIRD RESPONDENTS
ADV
E WESSELS
FIRST
SECOND & THIRD
RESPONDENTS’
ATTORNEYS
SCHICKERLING
BOWEN
& HESSELINK INC
COUNSEL
FOR FOURTH RESPONDENT
ADV
G VAN RYN
FOURTH
RESPONDENT’S ATTORNEYS
OTTO
KRAUSE ATTORNEYS
COUNSEL
FOR FIFTH & SIXTH RESPONDENTS
ADV
S BUDLENDER
FIFTH
& SIXTH RESPONDENTS’ ATTORNEYS
DENEYS
REITZ
DATE OF HEARING 20 SEPTEMBER
2010
DATE OF JUDGMENT 3 NOVEMBER 2010
[1]
Section
4(1)(a): the first respondent as the lender (consumer) is a juristic
person as defined in s 1 of the NCA having an asset
value or annual
turnover exceeding the threshold determined by the Minister in terms
of the NCA (R1m); and s 4(2)(c): the second
and third respondents
being sureties in respect of the credit transaction to which the Act
does not apply.
[2]
That
challenge was also that sections 4(1)(a) and (b) of the NCA violated
section 9(1) of the Constitution because they excluded
juristic
persons.
[3]
Para
[25] of the judgment.
[4]
The
first defendant was the principal debtor and the second defendant
the surety.
[5]
As
can be gleaned from para [3] of the judgment of Rogers AJ in the
matter referred in fn 6.
[6]
Reported
sub
nom
Standard
Bank of South Africa Ltd v Hunkydory Investments 188 (Pty) Ltd and
Others (No 2)
2010
(1) SA 634 (C).
[7]
Weare
and Another v Ndebele NO and Others
[2008] ZACC 20
;
2009
(1) SA 600
(CC) where the court unanimously dismissed a challenge
(also under s 9(1)) to a provision which barred juristic persons
from
holding gambling licences.
[8]
At
para [46].
[9]
1997
(3) SA 1012
(CC) paras [24]-[26].
[10]
Bel
Porto School Governing Body and Others v Premier, Western Cape, and
Another
[2002] ZACC 2
;
2002
(3) SA 265
(CC) paras [45]
–
[46];
New
National Party of South Africa v Government of the Republic of South
Africa and Others
[1999] ZACC 5
;
1999
(3) SA 191
(CC) para [24].
[11]
Van
der Merwe v Road Accident Fund & Another (Women's Legal Centre
Trust as Amicus Curiae)
[2006] ZACC 4
;
2006
(4) SA 230
(CC) para [10].
[12]
Cf
Weare
and Another v Ndebele NO and Others
[2008] ZACC 20
;
2009
(1) SA 600
(CC);
Merafong
Demarcation Forum and Others v President of the Republic of South
Africa and Others
[2008] ZACC 10
;
2008
(5) SA 171
(CC) para 115;
Affordable
Medicines Trust and Others v Minister of Health and Others
[2005] ZACC 3
;
2006
(3) SA 247
(CC) para [100];
United
Democratic Movement v President of the Republic of South Africa and
Others (African Christian Democratic Party and Others
Intervening;
Institute for Democracy in South Africa and Another as Amici Curiae)
(No 2)
[2002] ZACC 21
;
2003
(1) SA 495
(CC) paras [69], [70] and [74];
New
National Party of South Africa v Government of the Republic of South
Africa and Others
[1999] ZACC 5
;
1999
(3) SA 191
(CC) paras [26] to [27] and [31] - [33];
Jooste
v Score Supermarket Trading (Pty) Ltd (Minister of Labour
Intervening)
1999
(2) SA 1
(CC) para [17];
S
v Lawrence S v Negal S v Solberg
1997
(4) SA 1176
(CC) para [70] and
Prinsloo
v Van der Linde and Another
1997
(3) SA 1012
(CC) paras [39] to [40].
[13]
Cf
Koyabe
v Minister for Home Affairs and Others (Lawyers for Human Rights as
Amicus Curiae)
2010
(4) SA 327
(CC) para [87].
[14]
Biowatch
Trust v Registrar Genetic Resources and Others
2009
(6) SA 232
(CC) paras [23] – [24].
[15]
Wille
’
s
Priciples of South African Law
9th Ed
886.