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[2021] ZAGPJHC 378
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Buffet Investment Services (Pty) Ltd v Goncalves and Others (33073/2019) [2021] ZAGPJHC 378 (3 June 2021)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, JOHANNESBURG)
Case
no: 33073/2019
REPORTABLE:
NO
OF
INTEREST TO OTHER JUDGES: NO
REVISED.
3
June 2021
In
the matter between:
BUFFET
INVESTMENT SERVICES (PTY) LIMITED
Applicant
And
PAULO
ROBERTO MARTINS GONCALVES
1
st
Respondent
THE
TRUSTEES FOR THE TIME BEING OF THE
GONCALVES
FAMILY
TRUST
2
nd
Respondent
DAVPROP
22
CC
3
rd
Respondent
Delivered:
This judgement was prepared and authored by the Judge whose name is
reflected herein and is handed down electronically
by circulation to
the Parties/their legal representatives by email and by uploading it
to the electronic file of this matter on
CaseLines. The date for
hand-down is deemed to be 2 June 2021.
JUDGMENT
BEZUIDENHOUT
AJ:
[1]
The matter before me concerns a claim made by the applicant for
payment of monies
lent and advanced to Counter Act Development (Pty)
Limited, the principal debtor. The three respondents are co-principal
debtors
and guarantors for the obligations of the principal debtor to
the applicant. The respondents counterclaimed for a statement and
debatement of account.
THE
APPLICANT’S CLAIM
[2]
On 23 and 26 March 2018, a Loan
Facility Agreement incorporating a Sale of Beneficial Interest
and
Shares, and Repayment of Arrear Rental (the agreement) was concluded
between the applicant, the principal debtor and eleven
other
entities, that included the three respondents.
[3]
In terms of the agreement the
applicant advanced an amount of R 6 million to the principal
debtor,
the principal debtor could draw down against the capital sum as and
when it required funds.
[4]
The capital advanced was repayable as and when the principal debtor
had the funds
to do so, subject thereto that the interest levied on
the capital outstanding from time to time, had to be paid on the
first day
of each month beginning on 1 April 2018 and the full amount
owing had to be repaid within the loan period.
[5]
The Respondents, irrevocably and
unconditionally, jointly and severally and as co-principal
debtors
and guarantors, guaranteed the due and punctual payment of all
amounts due by the principal debtor and for the due and
punctual
performance of all the principal debtors’ obligations to the
applicant under the agreement.
[6]
From time to time commencing March 2018 and concluding approximately
during June 2019,
the principal debtor drew down against the capital
sum and interest was levied on the capital advanced as per the
agreement; the
first interest payment became due and payable on 1
April 2018.
[7]
The principal debtor, in breach of the agreement, failed to pay the
first interest
payment on 1 April 2018, and failed to pay any of the
subsequent monthly interest amounts as they fell due.
[8]
On 7 December 2018, one of the
principal debtor’s creditors, Elematic SA (Pty) Limited
obtained default judgment against the principal debtor in the amount
of R 603 208-00 plus interest and the judgment remained unsatisfied.
[9]
During May and June 2019, the
principal debtor sent letters to its employees and creditors
which
made it evident that the principal debtor had ran into financial
difficulties and was unable to service its financial obligations
as
and when they fell due.
[10]
As at 30 June 2019, the principal debtor was indebted to the
applicant in the capital sum of
R 6.458 million and interest in the
amount of R 1.383 million.
[11]
On 8 July 2019, the applicant demanded payment of the full amount.
The applicant, acting in terms
of the agreement prepared a schedule
(Schedule FA 3 attached to the founding affidavit) setting out the
amounts (including both
capital and interest) due by the principal
debtor from time to time and this schedule accompanied the letter of
demand.
[12]
The applicant applied for the liquidation of the principal debtor.
[13]
The loan period ended on 31 March 2020 due to efflux of time.
THE
RESPONDENTS DEFENCE
[14]
The respondents did not dispute the agreement or its terms, the
capital amounts advanced, the
computation of the interest or that the
principal debtor had not paid the monthly interest or capital. The
respondent did not dispute
the acts mentioned in paragraphs 8 to 13
above nor did they dispute their liability as co-principal debtors
and guarantors.
[15]
The respondents’ defences for non-payment of the capital and
interest were as follows:
[15.1]
the applicant did not furnish the principal debtor with any
statements or any demand for the interest;
[15.2]
the amounts claimed were not due and payable to the applicant;
[15.3]
the applicant prevented the principal debtor from performing in that
the principal debtor and the applicant agreed
that the interest would
be paid from the profit made on the projects however, the principal
debtor received no income from Carrisbrook,
the two projects located
in Vanderbijlpark and Edenvale were withdrawn; and
[15.3]
profits due to the principal debtor were also not paid.
DISCUSSION
[16]
I will deal with the first two defences raised by the respondents as
they are interlinked and
then jointly with the third and fourth
defences thereafter.
[17]
I have been referred to the matter of Dunn v Road Accident Fund
2019
(1) SA 237
(KZN) where the principle has been restated that where a
date for performance has been specified in the contract, a debtor
must
perform in accordance with the date specified in the contract
and there is no obligation on the creditor to make demand, as demand
is encapsulated in the date itself.
[18]
The principal debtor was aware of the amounts it drawdown against the
capital, clauses 3.1 and
4.1.1 provided how the interest rate should
be determined and interest be calculated. It was a simple
mathematical exercise for
the principal debtor to calculate the
interest amount it must pay over to the applicant in terms of the
agreement. The date on
which the first interest payment was to be
made was specified in the agreement, it was 1 April 2018. There was
certainty as to
the obligations the principal debtor had to comply
with, and no further demand was necessary.
[19]
After the first interest payment the principal debtor had to effect
monthly interest payments
which it also failed to do. The same
principle applicable to the first interest payment applies to the
subsequent monthly interest
payments.
[20]
In terms of clause 4.2 the applicant may provide the principal debtor
with a schedule from time
to time, setting out the balance due but
there was no obligation on the applicant to provide the principal
debtor with monthly
statements.
[21]
The applicant had, to its letter of demand, attached a schedule
setting out the capital amounts
advanced and the computation of the
interest; the principal debtor had not taken issue therewith. The
principal debtor did not
effect any payments after it received same.
[22]
Clause 4 of the agreement deals with the repayment of the loan
facility and stipulated that:
the loan shall be repayable as and when
the principal debtor has funds available for these purposes provided
always that: the principal
debtor shall be obliged to pay interest on
the balance of the capital amount outstanding from time to time
monthly in arrears on
the first day of each following month, the
first instalment being due on 1 April 2018 and each subsequent
instalment to be paid
on the first day of each month thereafter.
[23]
The wording “provided always” made it imperative that the
monthly interest must be
paid in order for the principal debtor to
enjoy the benefit of the lenient repayment terms. The agreement
provided that in the
event of the principal debtor not paying the
monthly interest that the full amounts would become due and payable.
[24]
However, despite the interest not being paid the principal debtor
committed further acts which
under the agreement allowed the
applicant to call up the facility, such as, judgement being granted
against it and such remaining
unsatisfied for a period of seven days
or longer, the principal debtor not being able to pay its debts as
and when it fell due
and the principal debtor taking steps to invoke
business rescue proceedings.
[25]
The respondents’ defences that demand was not made, statements
not provided and the amounts
not being due and payable cannot be
sustained.
[26]
The respondents raised two further defences: that the principal
debtor was prevented from making
payment of the interest as the
applicant prevented performance in that the principal debtor received
no income from Carrisbrook,
the two projects located in
Vanderbijlpark and Edenvale were withdrawn and profits due to the
principal co-debtor were also not
paid to it.
[27]
The applicant objected to the respondent seeking to amend, redefine
or modify the agreement by
presenting extrinsic evidence and referred
me to the matter of Johnson v Leal
1980 (3) SA 927
(A) which dealt
with the integration rule.
The
general rule states that a party to a contract which has been
integrated into a single and complete
written
memorial
may
not contradict, add, amend or modify the contract by reference to
extrinsic evidence and in that way redefine the terms
of the
contract.
[28]
The first respondent pleaded that during discussions between him and
the applicant’s representative
leading up to the conclusion of
the agreement in March 2018, they agreed that the interest owing to
the applicant would be paid
from the profit generated by the two
projects (interest agreement).
[29]
The applicant denied such an agreement and pointed to the lack of
particularity and the many
questions the alleged interest agreement
raised which the first respondent did not address or deal with in its
answering affidavit.
Was the interest agreement concluded before or
after the agreement, was it oral or in writing, and so forth.
[30]
The applicant furthermore pointed to the clauses which recorded that
the agreement was the sole
memorial of the parties’ agreement
and that the respondents was thus precluded from placing reliance on
extrinsic evidence
and information to amend, modify or redefine the
terms of the agreement.
[31]
Under the agreement all amounts shall be paid without deduction or
set off (clauses 4.3 and 18.10)
and the guarantee undertaken by the
respondents was an unconditional, on demand guarantee.
[32]
Moreover, the interest agreement runs counter to the explicit
provision in clause 4 as to when
the first interest payment would be
due and payable. The agreement furthermore makes no reference to the
interest payment being
subject to any other agreement.
[33]
The respondents did not address the discrepancy being created by
their version of a separate
interest agreement and how this
discrepancy should be aligned with the agreement.
COUNTERCLAIM
[34]
The respondents in the counterclaim want this Court to order the
applicant to provide them with
certain supporting documentation and
then for the respondents and the applicant to debate such. The
respondents submitted that
debatement is a right accruing to the
principal debtor but as the principal debtor is not before Court the
relationship between
the parties are such that the Court can order
the applicant to debate the accounts with the respondents.
[35]
In this matter the agreement in clause 11.1 stipulated that if a net
profit was made by the different
projects, Buffet undertook to
provide the 2
nd
Respondent with the financial statements
of the different projects and the 2
nd
Respondent must
then, within 7 days provide an invoice claiming its share in the
profit. According to the applicant the projects
did not yield a
profit but despite this the applicant did provide the 2
nd
respondent with the financial statements pertaining to the different
projects.
[36]
The Respondents alleged that upon their perusal of
the financial statements there was a R 1 million refund
that they
were aware of in which the principal debtor had to receive a
percentage of and rental to the estimation of R 37 million
which the
principal debtor similarly had to receive a percentage of.
[37]
The respondents contend that despite the principal debtor not being
before Court, the Court could
order the applicant to provide the
documents to the respondents and to debate the accounts and / or
statements with them.
[38]
The respondents claimed that they have shown that the financial
statements are in issue and that
the respondents are entitled to a
debatement to satisfy themselves of the correctness of the financial
statements.
[39]
The applicant contended that it is not a project owner and has no
obligation to make payment
of any nett profit to the second
respondent.
[40]
I cannot find that the provision of the supporting documents or the
debatement thereof has any
immediate impact on the loan facility and
the repayment of the capital or the interest and the principal debtor
and the respondents’
liability to the applicant.
[41]
I find that the applicant is entitled to the relief it claimed in its
notice of motion and as
the respondents agreed to pay legal costs on
an attorney and own client scale in the agreement, the applicant is
entitled to same.
WHEREFORE
THE COURT ORDERS THAT:
1.
The first, second and
third Respondents, jointly and severally, the one paying the other to
be absolved pay to the Applicant:
a.
The amount of R
6 485 757-16,
b.
The amount of R
1 382 939-20,
c.
Interest on the
aforesaid two amounts at the rate of 15 percent per annum, from 18
July 2019 to date of final payment, and
d.
The costs of the
application on an attorney and own client scale.
2.
The Counterclaim is
dismissed.
J
M BEZUIDENHOUT AJ
Acting
Judge of the High Court
DATE
OF HEARING
:
3 March 2021
DATE
OF JUDGMENT
:
3 June 2021
APPLICANT’S
COUNSEL
:
Adv E Kromhout
RESPONDENT’S
LEGAL REPRESENTATIVE
:
Adv SS
Cohen