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[2020] ZAGPJHC 441
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Massbuild (Pty) Ltd t/a Builders Express, Builders Warehouse and Builders Trade Depot v Tikon Construction CC and Another (6986/2017) [2020] ZAGPJHC 441 (14 September 2020)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
CASE
NO: 6986/2017
REPORTABLE:
NO
OF
INTEREST TO OTHER JUDGES: NO
REVISED:
YES
14
September 2020
In
the matter of:
MASSBUILD
(PTY) LTD t/a BUILDERS EXPRESS,
BUILDERS
WAREHOUSE AND BUILDERS TRADE
DEPOT
Plaintiff
And
TIKON
CONSTRUCTION CC
First Defendant
CHRISTIAAN
J T
ROBBERTZE
Second Defendant
JUDGMENT
Judgment
is handed down electronically via email transmission to the parties
on 14 September 2020 and by publication on SAFLII
BESTER
AJ
[1]
The plaintiff sued the first defendant for
what it claims is the outstanding balance on an account for goods
sold and delivered,
and the second defendant as surety for the first
defendant’s debt. The first defendant is in liquidation, and
the claim was
not pursued against the first defendant at this trial.
The second defendant denies that he concluded a suretyship agreement
with
the plaintiff.
[2]
The plaintiff sold goods to the first
defendant on credit, during the period April 2015 to August 2016. The
parties agreed that,
notwithstanding the actual amount that the
plaintiff contends is owed to it by the first defendant, the second
defendant will be
liable for a debt of R1 million in the event of the
plaintiff proving the suretyship.
[3]
The parties formulated the issues to be
decided at trial in writing, as follows:
“•
Whether,
on or about 16 March 2015, the plaintiff and the first defendant
entered into a written agreement entitled Credit Application
–
Juristic Person, incorporating a deed of suretyship in favour of the
plaintiff.
•
This
issue incorporates
o
whether the second defendant signed the
document attached to the particulars of claim as POC1;
o
the authenticity of POC1;
o
whether
sections 13(1)
and
13
(3) of
the
Electronic Communications and Transactions Act, 25 of 2002
apply;
o
If so, whether the documents relied upon by
the plaintiff comply with the requirements of
Section 13(1)
or
13
(3).”
The
evidence
[4]
The plaintiff called two witnesses.
Nateesha Mohabir and Yvette Nair were both employed by the plaintiff
as risk assessment administrators
during March 2015. They constituted
two members of a four-member team of risk assessment administrators.
Their functions included
processing credit applications.
[5]
The second defendant and his sister, Maudie
Robbertze, also testified. The second defendant is the sole member of
the first defendant.
Ms Robbertze was the first defendant’s
financial manager in March 2015.
[6]
What emerged from the evidence is a rather
sparse picture. Each party’s witnesses dealt with the events as
they unfolded at
their respective offices. They all had only a vague
recollection of the events surrounding the opening of the first
defendant’s
account with the plaintiff.
[7]
The first defendant was a construction
company. The second defendant was usually out on building sites and
spent little time at
the office. Ms Robbertze managed the first
defendant’s administration. She had a standing authority to
append the second
defendant’s signature on behalf of the first
defendant as required in the ordinary course of business, which
included the
opening of trading accounts with suppliers as the need
arises.
[8]
According to the second defendant and Ms
Robbertze, the second defendant had a strict policy against standing
surety for the debts
of the first defendant. They testified that,
other than a surety with the first defendant’s bank, no other
sureties had been
concluded.
[9]
The first defendant had accounts with
various other suppliers over the relevant period, but no other credit
agreements were produced
to show that the second defendant refused to
sign surety in those instances. Whatever documents existed, the
second defendant testified,
had been handed over to the liquidators
and the second defendant’s attorneys. Ms Robbertze testified
that, in any event,
she usually did not keep copies of the credit
agreements.
[10]
The second defendant did not plead a lack
of authority on the part of Ms Robbertze as a defence. He simply
denied having signed
the document at all, including in respect of the
credit application. Because of the conclusions I reach below, it is
not necessary
to consider whether the issue of authority was fully
canvassed, and whether actual or ostensible authority had been
established
by the plaintiff.
[11]
To facilitate the signature of documents by
the second defendant, Ms Robbertze utilised an electronic signature.
This was in the
form of a picture (scan) of a physical manuscript
signature that had been set up in a software programme for the
reading, creation
and manipulation of electronic documents in the pdf
format. The software programme she used, Adobe Acrobat, allowed Ms
Robbertze
to place the picture of the second defendant’s
signature in a document, which was then incorporated and saved as
part of
the pdf document.
[12]
Ms Robbertze could not remember how she had
dealt with the completion of the specific application form. She
described her usual
methodology and contended that she would have
applied that same methodology also in this instance. Ordinarily, she
said, she would
complete the required details in the document, in pdf
format, on her laptop. She would then print it out and sign the
document
in manuscript as witness. Thereafter she would scan the
document into an electronic format, after which she would append the
second
defendant’s signature to the newly scanned pdf document.
She would also append an electronic version of his initials, as
required.
[13]
The few emails exchanged between the
parties do not tell us much. On Tuesday, 17 March 2015, Ms Robbertze
sent an email to Ms Mohabir, attaching the
account application together with supporting documentation, such as
the second defendant’s
identity document and proof of the first
defendant's bank account.
[14]
On 18 March Ms Mohabir forwarded the email
to Ms Nair, who in turn replied to Ms Robbertze, informing her that
the application cannot
be processed because the application was not
signed by witnesses and was not initialed. In addition, because of
the high credit
limit applied for, she stipulated additional
information that had to be provided. The application form attached to
this chain of
emails, reflect that it was not only the initials and
witness signatures that had been omitted, but also the signature on
behalf
of the first respondent, and of the proposed surety, the
second respondent, whose details had already been completed on the
form.
[15]
Later that same day, Ms Robbertze replied,
attaching the completed application form to her email, together with
the additional information
requested. This is the document that the
plaintiff relies on for its claim. Ms Robbertze explained her
previous omission as follows:
“
My
apologies. I've noticed I've attached the unsigned form before I even
printed instead of the scan after signing.”
[16]
This offers some support for Ms Robbertze’s
evidence. If she had sent the document before she printed it to sign
it herself,
it suggests that the second defendant’s signature
had not yet been added to the document by the time she had printed it
out
to append her own signature.
[17]
Apart from identifying the emails, and
their accompanying attachments in the bundle of documents, the
plaintiff’s witnesses
could add little more than to confirm
that, on the strength of the second application form, a trading
account was opened for the
first respondent after following the
plaintiff’s internal procedures. As far as the plaintiff’s
employees were concerned,
the second respondent had signed the
suretyship included in the application form and was bound thereby.
[18]
The eight-page pro forma application form
requires stipulated particulars of the applicant for credit to be
completed. The form
requires several signatures. It contains a
declaration which requires a signature on behalf of the applicant for
credit and a signature
confirming that a resolution had been passed
by the directors or members of the applicant to conclude the credit
agreement. At
the end of the terms of the agreement another signature
on behalf of the applicant is required. The portion of the form
identified
as “deed of suretyship” requires the signature
of the surety.
[19]
Ms Robbertze completed the required details
electronically and appended the second defendant’s signature in
all four required
locations, as described above. In respect of the
declaration signature, Ms Robbertze and Mr Anton van Aswegen signed
as witnesses.
Mr van Aswegen is a quantity surveyor who was employed
by the first defendant at the time, and who, according to Ms
Robbertze,
just happened to be in the office at the time she required
a second witness. In respect of the signature as surety, Ms Robbertze
signed as the only witness. No other witnesses were required in terms
of the form.
[20]
Ms Robbertze also appended the second
defendant’s initials to all the pages. Whereas the second
defendant’s signatures
and initials were all electronically
added, the witnesses signed in manuscript.
The
dispute
[21]
The evidence narrowed the issues in dispute
between the parties. The authenticity of the document, and the fact
that the second
respondent’s signature was affixed thereto as
described by Ms Robbertze, were no longer contentious. However, the
parties
remained at odds as to the nature of the signatures and their
legal consequences.
[22]
Section 6 of the General Law Amendment Act,
50 of 1956, stipulates the formalities required for a valid contract
of suretyship in
the following terms:
“
No
contract of suretyship entered into after the commencement of this
Act, shall be valid, unless the terms thereof are embodied
in a
written document signed by or on behalf of the surety: Provided that
nothing in this section contained shall affect the liability
of the
signer of an aval under the laws relating to negotiable instruments.”
[23]
The
parties agreed that the document relied upon by the plaintiff
embodies the terms of a suretyship.
[1]
[24]
The second defendant contended that the
signature to the surety document was an electronic signature, and
thus had to comply with
the Electronic Communications and
Transactions Act, 25 of 2002 (“the ECTA”). The plaintiff
disagreed.
The
provisions of the
Electronic Communications and Transactions Act
[25
]
Broadly
speaking, the ECTA has as its objects the enablement and facilitation
of electronic communications and transactions in the
public interest.
To this end, amongst others, it seeks to promote legal certainty and
confidence in respect of electronic communications
and
transactions,
[2]
and to ensure
that electronic transactions in the Republic conform to the highest
international standards.
[3]
[26]
Section 12
of the ECTA provides that a
requirement in law that a document must be in writing (such as is the
case for a contract of suretyship),
is met if the document is in the
form of a data message and accessible in a manner usable for
subsequent reference.
[27]
Section 13
of the ECTA provides as follows:
“
(1)
Where the signature of a person is required by law and such law does
not specify the type of signature, that
requirement in relation to a
data message is met only if an advanced electronic signature is used.
(2)
Subject to (1), an electronic signature is not without legal force
and effect merely on the grounds
that it is in electronic form.
(3)
Where an electronic signature is required by the parties to an
electronic transaction and the parties have
not agreed on the type of
electronic signature to be used, that requirement is met in relation
to a data message if –
(a) a
method is used to identify the person and to indicate the person’s
approval of the information communicated;
and
(b)
having regard to all the relevant circumstances at the time the
method was used, the method was as reliable
as was appropriate for
the purposes for which the information was communicated.
(4)
Where an advanced electronic signature has to be used, such signature
is regarded as being a valid electronic
signature and to have been
applied properly, unless the contrary is proved.
(5)
Where an electronic signature is not required by the parties to an
electronic transaction, an expression
of intent or other statement is
not without legal force and effect merely on the grounds that –
(a)
it is in the form of a data mass message; or
(b)
it is not evidenced by an electronic signature but is evidenced by
other means from which such person’s
intent or other statement
can be inferred.”
[28]
Section 6 of the General Amendment Act of
1956 has not been amended to specify the type of signature required
for a contract of
suretyship. It follows that where the suretyship is
embodied in a data message, the signature must meet the requirements
for an
advanced electronic signature, as stipulated in section 13(1)
of the ECTA. As a result, the provisions of subsection 3 need not
be
considered further.
[29]
A data message is defined in the ECTA as:
“
data
generated, sent, received or stored by electronic means and includes
–
(a)
Voice, where the voice is used in an
automated transaction; and
(b)
A stored record”
[30]
In turn, data is defined as “
electronic
representations of information in any form
”.
[31]
The ECTA defines an electronic signature as
“
data attached to, incorporated
in, or logically associated with other data and which is intended by
the user to serve as a signature”.
An advanced electronic signature is defined as “
an
electronic signature which results from a process which has been
accredited by the Authority as provided for in section 37
”.
[32]
Section
37 provides that the Accreditation Authority
[4]
may accredit authentication products and services in support of
advanced electronic signatures. Section 38 provides that the
accreditation
authority may not accredit authentication products or
services unless the accreditation authority is satisfied that
electronic
signatures to which such authentication products and
services relate complies with the requirements set out in section 38.
The
section also sets out factors to which the accreditation
authority must have regard to prior to accrediting any such product
or
service. It is not necessary to delve into these details.
[33]
The parties agree that the document relied
upon by the plaintiff does not bear an advanced electronic signature.
They disagree,
however, as to whether the original of the written
document relied upon by the plaintiff is a data message, which would
require
compliance with subsection 1.
Is
the document a data message?
[34]
The defendant contends that, because the
signature of the second defendant was appended by Ms Robbertze in the
Adobe Acrobat Software
Programme, the deed of suretyship came into
being as a data message, and that data message was then transmitted
as the contract
to the plaintiff. Therefore, the signature had to be
an advanced electronic signature to be valid, which it is not.
[35]
The plaintiff, on the other hand, contends
that the document sent to it was simply a representation of the
agreement, in data message
form, and that the original was in fact
created in physical paper form. Therefore, when the deed of
suretyship came into being,
it was not a data message, although it
was communicated to the plaintiff in the form of a data message.
[36]
The plaintiff reasons as follows: Ms
Robbertze, I should find, appended her signature, in manuscript,
after she had added the second
respondent’s signature. Ms
Robbertze’s manuscript signature was intended, not to confirm
that the second defendant’s
signature was appended to the
document, but rather to confirm that the second defendant’s
mark indicated his intention to
be bound by the contract. Her
signature gave the suretyship legal validity. Consequently, the
suretyship was embodied in a physical
document, and it was thereafter
scanned in and sent to the plaintiff.
[37]
Thus, when the suretyship came into being,
the plaintiff argued, it was a physical document and not subject to
section 13 of the
ECTA. I disagree, for several reasons.
[38]
There is no basis to find that Mr Robbertze
signed the document only after she had added the second defendant’s
signature.
In the circumstances the plaintiff has failed to establish
the sequence in which the signatures were appended, which is a
necessary
ingredient of its argument.
[39]
Further,
Hoexter JA explained in
Jurgens
[5]
:
“
The
function of a signature is to signify that the writing to which it
pertains accords with the intention of the signatory. It
conveys an
attestation by the person signing of his approval and authority for
what is contained in the document.”
[40]
The second defendant was the person whose
intention had to be evidenced through his signature. He was the
intended surety, and thus
the person to be bound by the terms of the
document.
[41]
Section 6 of the General Law Amendment Act
allows for the written document to be signed on behalf of the surety.
The parties agree
that the document had not been signed by the second
defendant, but (assuming she had authority) on his behalf by Ms
Robbertze.
[42]
The
concept of a signature by proxy was considered in
Levitan
NO
[6]
,
where the court approved of what was stated in
Bowstead
on Agency
[7]
:
“
The
general position in regard to signature by proxy is stated as follows
by Bowstead on Agency...:
“
As
a general rule at common law a person sufficiently ‘signs’
a document if it is signed in his name and with his authority
by
someone else. Thus, an agent may be appointed to subscribe the name
of the principal to the memorandum of association of a company,
or to
the instrument of dissolution of a building society, and such a
signature is a sufficient compliance with [the relevant statutory
provisions].”
[43]
The plaintiff’s argument is that Ms
Robbertze’s signature was the signature on behalf of the second
defendant. The argument
does not explain why then it was necessary to
append the second defendant’s electronic signature as well.
[44]
It appears from the document itself, and Ms
Robbertze testified, that she appended her signature as a witness to
the fact that Mr
Robbertze’s signature was applied to the
document. Her signature was not intended to be appended on behalf of
the second
respondent.
[45]
The plaintiff’s construct that Ms
Robbertze’s signature constitutes the signature of the surety,
must fail.
[46]
The parties agree that they did not
exchange any physical documents pertaining to the credit application.
All communication and
exchange of documents happened electronically,
via email.
[47]
A
suretyship is a bilateral jural act. In
Jurgens
[8]
the Appellate Division explained as follows:
“
Suretyship
is a bilateral jural act. … It is a contract which arises from
agreement between creditor and surety, and it involves
the acceptance
of an offer. An offer is a manifestation of the offeror’s
wiliness to contract, made with the intention that
it shall become
binding as soon as it is accepted by the offeree. It is trite that an
offer cannot be accepted unless and until
it has been brought to the
attention of the offeree.”
[9]
[48]
The
only document that was communicated to the plaintiff was the pdf
document sent to it by email. That document is a data message
as
defined in the ECTA. Whether that constituted the acceptance of an
offer, or whether the subsequent communication of the approval
of the
application constitutes the acceptance of an offer to stand surety by
the second defendant, need not be decided, as the
document was a data
message throughout.
[10]
[49]
I therefore find that the document which
the plaintiff seeks to enforce as a suretyship is a data message, and
had to comply with
the requirements of section 13(1) of the ECTA.
[50]
The parties agree that the signature does
not comply with section 13(1). It follows that the plaintiff has
failed to establish a
valid and enforceable suretyship.
Order
[51]
In the result, I make the following order:
a)
The plaintiff’s claim against the
first defendant is postponed
sine die.
b)
The plaintiff’s claim against the
second defendant is dismissed with costs.
A
Bester
Acting
Judge of the High Court of South Africa
Gauteng
Local Division, Johannesburg
Heard:
29 and 30 January 2020
Judgment:
14 September 2020
Counsel
for the plaintiff:
Adv AJ
Lamplough
Instructed
by:
Gjersöe Incorporated
Counsel
for the second defendant:
Adv C Gibson
Instructed
by:
Senekal Simmonds Inc
No
appearance for the first defendant.
[1]
See generally
Fourlamel
(Pty) Ltd v Maddison
1977 (1) SA 333
(A) at 342 – 3 and
Sapirstein
& Others v Anglo African Shipping Co (SA) Limited
1978 (4) SA 1
(A) at 12 B – D.
[2]
Section 2(e).
[3]
Section2(h).
[4]
Section
34 of the ECTA provides that the Director General of the Department
of Telecommunications and Postal Services is the accreditation
authority and may appoint employees of the Department of
Telecommunications and Postal Services as deputy accreditation
authorities
and officers
.
[5]
Jurgens
v Volkskas Bank
[1992] ZASCA 152
;
1993 (1) SA 214
(A) at 220 E.
[6]
Leviton
NO v Petrol Conservation (Pty) Ltd
1962 (3) SA 233
(W) at 235J – 236A.
[7]
Bowstead
on Agency, 12
th
ed. p 17.
[8]
Jurgens and
Others v Volkskas Bank Limited
[1992] ZASCA 152
;
1993 (1) SA 214
(A) at 218 J –
219 A.
[9]
Internal
references omitted.
[10]
S
ection
22(2) of the ECTA provides that an agreement concluded between
parties by means of data messages is concluded at the time
when and
place where the acceptance of the offer was received by the offeror.