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[2020] ZAGPJHC 32
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National Empowerment Fund Trust v Mojaho Trading (Pty) Limited and Others (18678/2017) [2020] ZAGPJHC 32 (17 February 2020)
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IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NUMBER: 18678/2017
In
the matter between:
NATIONAL
EMPOWERMENT FUND TRUST
Plaintiff
(Registration number
IT 10125/00)
and
MOJAHO
TRADING (PTY)
LIMITED
First Defendant
(Identity
number […]83)
VINCENT
MOKHELE
MOKHOLO
Second Defendant
(Identity
number […]88)
ERIC
SOBI
MOKHOLO
Third Defendant
(Identity
number […]85)
MOGMAD
RHAMEES
NORDIEN
Fourth Defendant
JUDGMENT
DIPPENAAR
J:
[1]
The plaintiff claims specific performance
against the first defendant, the principal debtor and the second to
fourth defendants
as sureties and co-principal debtors, based on a
written agreement of settlement concluded between the plaintiff and
first defendant
on 25 February 2015 and a written deed of suretyship
executed by the second, third and fourth defendants in favour of the
plaintiff
on 23 and 31 December 2005 respectively. The facts were by
and large common cause between the parties.
[2]
It was common cause that a loan facility
and preference share subscription agreement (“the facility
agreements”) were
concluded between the plaintiff and the first
defendant on 23 December 2005 and that the second to fourth
defendants concluded
the written suretyship relied on by the
plaintiff in its terms. The terms of the aforesaid agreements were
common cause.
[3]
It was common cause that the plaintiff
instituted proceedings against the defendants in this court on 8
February 2013 under case
number 04890/2013 for payment of amounts of
R22 849 606.04 and R4 030 937.48 due under the facility agreements.
[4]
It was further common cause that a written
settlement agreement was concluded between the plaintiff and first
defendant on 25 February
2015. The agreement was signed by all four
the defendants. The relevant portion of the settlement agreement
provided:
“
1
The parties record that this litigation has been settled on the basis
recorded in the correspondence exchanged between the parties
and
annexed as “A, B and C. 2 Consequently the first defendant will
make payment to the plaintiff of the sum of an amount
of R8 055
431.00 in instalments as follows…”
[5]
It was common cause that in terms of the
settlement agreement, the last instalment became due and payable on
31 July 2019. During
argument, the defendants conceded that the
denial in their plea lacked merit.
[6]
It was common cause that pursuant to the
conclusion of the settlement agreement, only R650 000.00 was paid by
the first defendant,
leaving an amount of R7 405 431.00 due and owing
to the plaintiff. It was not disputed that the plaintiff was entitled
to judgment
against the first defendant in that amount.
[7]
The only dispute between the parties
centered around the liability of the sureties, the second to fourth
defendants.
[8]
During the course of the trial it became
apparent that the defendants did not effect a consequential amendment
pursuant to the plaintiff
amending its particulars of claim in
November 2019, with the result that there were various paragraphs of
the amended particulars
of claim which were not pleaded to by the
defendants. After argument, the defendants were afforded an
opportunity to effect a consequential
amendment.
[9]
The defences to the plaintiff’s claim
which emerged from the defendants’ amended plea can be
summarised follows:
[9.1] “
It is
noted that the plaintiff’s current claim is by virtue of a deed
of suretyship. It is denied that the second, third and
fourth
defendants are jointly and severally bound as sureties in respect of
the settlement agreement.
[9.2] “
The
settlement agreement does not refer to the suretyship agreement and
the parties did not intend that sureties be bound jointly
and
severally as sureties in respect of the settlement agreement. The
second, third and fourth defendants are not parties to the
settlement
agreement and are accordingly not bound as such”;
[9.3] The plea further
contained a denial that the amount is due.
[10]
The conclusion of the suretyship agreement
in its terms was not disputed by the defendants.
[11]
Two witnesses gave evidence. The second
defendant presented evidence on behalf of the defendants. This
evidence was related to the
conclusion of the settlement agreement.
His evidence that the second, third and fourth defendants only signed
the settlement agreement
as witnesses was unchallenged and was argued
as common cause during argument. His evidence that it was the
intention of the parties
that the settlement agreement was to be
concluded only by the first defendant, was not challenged.
[12]
The second defendant further testified that
he drafted the settlement agreement, which it is undisputed was
signed by the plaintiff.
His intention was to only bind the first
defendant and not the sureties.
[13]
Ms Karishma Authar testified on behalf of
the plaintiff. She represented the plaintiff at the time of
conclusion of the settlement
agreement. She testified that the
necessary processes pertaining to the release of the second to fourth
defendants as sureties
under the suretyships were not followed and
that there was never any intention to release the suretyships. The
sureties were never
released under the suretyships. This evidence was
accepted by the defendants who admitted this evidence in argument.
[14]
The matter is thus to be determined based
on the interpretation of the suretyship, the common cause facts and
the admitted evidence.
[15]
The defendants argued that as the second to
fourth defendants were not parties to the settlement agreement, they
are not bound to
the suretyship as the settlement agreement did not
pertain to any indebtedness in relation to the loan agreement.
[16]
The
plaintiff on the other hand, argued that the second to fourth
defendants were liable under the deed of suretyship. Relying on
The
City of
Tswane
Metorpolitan Municipality v Blair Atholl Homeowners Association
[1]
( “Blair Atholl”)
[2]
,
it further argued that the parol evidence rule applied and that the
second defendants’ evidence regarding the settlement
agreement
was inadmissible. The evidence led by the second defendant however
provided context to the conclusion of the settlement
agreement, and,
as such, was admissible.
[3]
[17]
Plaintiff further argued that in terms of
the suretyship, the plaintiff was entitled to compromise its claim
against the principal
debtor, the first defendant, without
compromising its rights against the sureties under the suretyship.
[18]
The
relevant principles pertaining to the interpretation of documents are
trite and have been enunciated by the Supreme Court of
Appeal in
Natal
Joint Municipal Pension Fund v Endumeni Municipality
[4]
,
They have again been restated in
Blair
Atholl
,
which emphasised that the parol evidence rule still applied, being
that if a document is intended to provide a complete memorial
of a
jural act, extrinsic evidence may not contradict, add to or modify
its meaning
[5]
.
[19]
In
the interpretation of the suretyship, the point of departure is the
language of the document in question
[6]
.
A restrictive consideration of words without context is to be
avoided. It is also trite that the distinction between context and
background circumstances has been jettisoned.
[20]
The relevant provisions of the suretyship
are clauses 2.1, 2.3, 2.5 and 3. These clauses provide:
“
2.1
The sureties hereby jointly and severally bind themselves, with
effect from the effective date, s surety and co-principal debtor,
with the debtor to the creditor for the due, proper and timeous
performance by the debtor of all its obligations to the creditor
arising out of or in connection with the loan facility agreement.
2.3 The sureties agree
and declare that all admissions and acknowledgements of indebtedness
by the debtor shall be binding on them,
that the creditor shall be at
liberty, without affecting its rights hereunder, to release
securities or compound or make any other
arrangement with the debtor
without reference to them, and that in the event of winding up,
judicial management or compromise,
no such winding up, judicial
management or compromise, and no payments which the creditor may
receive from the debtor or any other
person or persons, company y or
companies, or from the sureties shall prejudice the rights of the
creditor to recover from the
sureties to the full extent of this
suretyship any sum which after the receipt of such payment may remain
owing by the debtor.
2.5 Each of the
sureties hereby renounces the benefits arising from the legal
exceptions, excussion, division, cession of action,
error calculi,
non causa debiti, revision of accounts and no value received, with
the meaning of which the sureties declare themselves
to be fully
acquainted, and the sureties hereby agree and declare that this
agreement is to be in addition and without prejudice
to any other
suretyship(s) and security(ies) now or hereafter to be held by the
creditor and that it shall remain in force as a
continuing covering
security notwithstanding any intermediate settlement of account and
notwithstanding the winding up or judicial
management of the debtor,
were any other person/s have bound themselves to the creditor as
surety and co principal debtor in solidum
for the debtor, the
liability of the sureties and all such co- sureties shall be joint
and several in all respects.”
3 No addition to and
no variation, modification or consensual cancellation of this
agreement and no waiver by the creditor of any
of its rights
hereunder, shall be of any force or effect, unless reduced to writing
and signed by or on behalf of the creditor”.
[21]
Clause 2.1 of the suretyship binds the
second to fourth defendants to the plaintiff for the due proper and
timeous performance by
the first defendant of all its obligations
“
arising out of or in connection,
with the loan facility agreement”.
[22]
It is undisputed that the suretyship was
concluded to secure the first defendant’s indebtedness under
the facility agreements.
It is also undisputed that the settlement
agreement compromised plaintiff’s claim pertaining to the
facility agreements with
the first defendant.
[23]
Upon a proper interpretation of the
provision, considering the context, I am satisfied that the
plaintiff’s present claim
against the second to fourth
defendants falls within the ambit of “
arising
out of or in connection with the loan facility agreement”,
as defined in clause 2.1 of the suretyship. The interpretation
contended for by the defendants lacks merit.
[24]
Clause 2.3 of the suretyship entitled the
plaintiff to proceed against the sureties, irrespective of any
compromise of its claim
against the first defendant.
[25]
As on the defendants’ own version,
the second to fourth defendants did not sign the settlement agreement
as parties, the plaintiff’s
claim against them was not
compromised. The settlement agreement only determined the amount of
the principal indebtedness as far
as the sureties are concerned.
[26]
It follows that the plaintiff is entitled
to judgment for the amount claimed.
[27]
The plaintiff and defendants each sought
costs orders against each for time wasted during the course of the
hearing. On the one
hand, the plaintiff claimed the costs of the
matter standing down on 4 February for a period of some 1.5 hours.
The plaintiff
abandoned the
de
bonis propriis
costs order initially
sought against the defendants’ attorney of record, who
represented it at the hearing.
[28]
On the other hand, the defendants claimed
the costs of the time spent in an argument on a point
in
limine
objecting to the defendants
presenting evidence at the trial in relation to the settlement
agreement. This point
in limine
was determined in favour of the defendants. A commensurate amount of
time was spent in relation to each. The parties were in agreement
that the trial would endure between 1 and 2 days. The matter was
finalised within this time period. It would not be in the interests
of justice to grant either of the costs orders sought.
[29]
The normal principle is that costs follow
the result. There is no basis to deviate from this principle.
[30]
In its summons, the plaintiff did not seek
costs on the scale as between attorney and client. This prayer was
only included in the
draft order which was presented at the end of
the hearing and was not raised in argument. No motivation was
presented in argument
as to why the plaintiff was entitled to the new
costs order sought. In the circumstances, it would not be in the
interests of justice
to grant such a costs order.
[31]
The plaintiff sought interest against the
defendants from the date on which each instalment was due by the
first defendant under
the settlement agreement. No evidence was
presented that any formal demands were made of any of the defendants
once the first defendant
failed to pay each of the instalments on due
date. The returns of service on the defendants reflecting the date/s
of service were
not filed of record.
[32]
I grant the following order:
[1] Judgment is granted
against the first, second, third and fourth defendants, jointly and
severally, the one paying, the other
to be absolved for:
[1.1] Payment of the
amount of R7 405 431.00;
[1.2] Interest on the
amount in [1.1] above at the rate of 10% per annum a tempore morae
from date of service of the summons to
date of payment;
[1.3] Costs of suit.
_____________________________________
EF
DIPPENAAR
JUDGE
OF THE HIGH COURT JOHANNESBURG
APPEARANCES
DATE
OF HEARING
:
03 and 04 February 2020
DATE
OF JUDGMENT
:
17 February 2020
PLAINTIFF’S
COUNSEL
: Adv
S Hussein-Yousuf
PLAINTIFF’S
ATTORNEYS
:
Mothle Jooma Sabdia Inc
Mr
E Jooma
DEFENDANT’S
ATTORNEY
: Mr
Lesomo
DEFENDANT’S
ATTORNEYS
:
Seokane Lesomo Inc
Mr Lesomo
[1]
[2018]
ZASCA 176
(3 December 2018)
[2]
Para
65
[3]
Blait
Atholl para 66
[4]
2012
(4) Sa 593 (SCA)
[5]
Baased
n Johnson v Leal 1980 (3) SA 927 (A) 943B
[6]
Blair
Atholl supra para 61 and 63