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[2010] ZAGPPHC 544
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Blackbeard v Round Square Property Developments (Pty) Ltd and Others (56840/2009) [2010] ZAGPPHC 544 (19 February 2010)
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Certain
personal/private details of parties or witnesses have been
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IN
THE HIGH COURT OF SOUTH AFRICA
NORTH GAUTENG-
PRETORIA
CASE No 56840/2009
DATE: 19 FEBRUARY
2010
NOT REPORTABLE
NOT OF INTEREST TO
OTHER JUDGES
BLACK BEARD,
ANTHONY JAMES
APPLICANT
V
ROUND SQUARE
PROPERTY DEVELOPMENTS (PTY) LTD.
FIRST RESPONDENT
ACCESS VALET AND
CAR WASH CC
SECOND RESPONDENT
TAUTE MICHAEL NO
THIRD RESPONDENT
TAUTE ALLINDA
SALOME NO
FOURTH RESPONDENT
JANSE VAN
RENSBURG GERHARDUS JOHANNES
FIFTH RESPONDENT
JANSE VAN
RENSBURG ALLINDA SALOME
SIXTH RESPONDENT
TAUTE MICHAEL
SEVENTH RESPONDENT
Application:
Money Judgment on Motion
Coram
Sapire AJ
01
02
2010
JUDGMENT
The applicant moves
for judgment in terms of his notice of motion which has the following
prayers:
1.
An order rectifying the suretyship agreement attached as Schedule A
to annexure
“
AJB1”
to
the founding affidavit, by replacing the words “To: Finspire
Capital (Pty) Ltd” with the words “To: A J Blackbeard”
where it appears before clause 1 of this document.
2. Judgment against
the first to seventh respondents, jointly and severally, the one to
pay the others to be absolved, in the amount
of R 573 125, 40 plus
additional interest on the aforesaid amount at a rate of 5,5 % per
month calculated on a daily basis in arrears
and capitalised monthly,
to be calculated from 15 September 2009 until date of payment of the
amount.
3. Judgment against
the respondents for further penalty interest to be payable on the
amount outstanding from time to time to be
calculated at an interest
rate of 2 % per month as from 15 September 2009 until date of payment
thereof.
4. An order
declaring the property known as portion 442 (a portion of portion
120) of the farm Zwartkop 356, registration division
JR, Gauteng,
measuring 5422 m
2
and held in terms of deed of transfer
T133505/07 attachable and executable for the payment of the aforesaid
debts. This order will
be subject to the right of the prior mortgage
bond holder, being ABSA Bank Limited.
5.
Costs of suit on the scale as between attorney and own client,
including 10
%
collection
commission on all amounts to be collected.
6. Further and/or
alternative relief.”
At the commencement
of the hearing the Applicant indicated that prayer 1 was not
persisted in, and accordingly the issue of rectification
was not
argued or further considered.
Furthermore I was
informed by Applicant’s counsel that prayer 4, could not be
granted as the bond on which Applicant relied
ranked after other
bonds registered against the property mortgaged. The consent of a
prior bondholder in favour of whom a non prejudice
clause in the bond
operated had not yet been obtained.
The applicant is an
attorney, employed by Van Zyl Smith Inc. a firm of attorneys. He,
alleges that he lent and advanced R350 000
for a period of thee
months to the first Defendant on terms and conditions set forth in a
written agreement a copy of which is
attached to the founding
affidavit.
The 1
st
Respondent is the principal debtor in terms of the loan agreement and
has subscribed thereto as such.
The 2
nd
Respondent is a close corporation, and one of those alleged to have
bound itself as surety for, and co principal debtor with, the
1
st
Defendant, in respect of its obligations under the loan agreement.
The 3
rd
Respondent is Michael Taute cited as Trustee of the Taute Family
Trust. The trust it is alleged bound itself as surety in respect
of
the loan.
The 4
th
Respondent is Allinda Salome Taute who is also cited as a Trustee of
the same Taute Family Trust.
The 3
rd
and the 4
th
Respondents it is alleged were authorised to
act on behalf of the Trust in binding the Trust as surety for the 1
st
Respondent. In support of this allegation a copy of a resolution
passed at a meeting of the Trustees held on the 4
th
day of
December 2008, is attached to the founding affidavit. A copy of the
Trust Deed establishing the Trust has not been placed
in evidence and
no allegations have been made in regard thereto from which it can be
assumed or deduced that the Trust had the
power to bind itself as
surety for the obligations of a third person such as the 1
st
Respondent. Although this point was not raised by the Defendants I am
satisfied that I cannot grant the relief claimed by the Applicant
against the Taute Family Trust in the absence of such evidence.
Furthermore the
resolution on which the applicant relies to establish the authority
of the 3
rd
and 4
th
Respondents, reveals that it
was not subscribed to by all the Trustees, and that there is a third
trustee who has not subscribed
to the resolution or been joined. This
point was raised by the Respondents and is a further reason for not
granting any relief
against the Trust.
The 5
th
Respondent is also sued as a surety in respect of the loan as are the
6
th
and the 7
th
Respondents who are the same
persons as the 3
rd
and 4
th
Respondents, save
that they are cited in their personal capacities.
The Loan Agreement
clearly describes the Applicant as the lender and the 1
st
Respondent as the borrower. The body of the Agreement is preceded by
a pre-amble in which it is recorded that the purpose of the
Agreement
is to record that the borrower supported by the sureties has the need
to borrow From the Lender and the “Lender
is willing and able
to borrow (sic) the capital” to the borrower subject to the
conditions set out there under. Only the
syntax is incorrect.
The Respondents and
especially the 1
st
Respondent resist the granting of the
judgment against the 1
st
Respondent on the grounds that
the 1
st
Respondent did not borrow any money from the
Applicant but from a company known as Finspire Capital (Pty) Ltd.
This argument is
advanced notwithstanding that the 1
st
Respondent has subscribed to the Agreement which clearly records that
the loan emanated from the Applicant.
The position of
Finspire in relation to the loan is referred to in the paragraph
dealing with repayment. Here it is provided that
repayments are to be
made to the Lender into the account of “the Agent for the
Lender, Finspire Capital (Pty) Ltd, ABSA Bank
Limited account number
9[...].” It cannot be accepted that the 1
st
Respondent and the individual by which it was represented, or any
other of the respondents for that matter, did not read the Agreement
from which it is clear that the Lender was the Applicant and Finspire
was his Agent, principally to receive payments on behalf
of the
applicant. The Respondents’ argument that the fact that some
payments were made to Finspire supports the allegation
that Finspire
not the Applicant was the lender cannot be maintained.
Any misunderstanding
which may have arisen is explained by the circumstances surrounding
the application for the loan. The Applicant
is an attorney who is
employed by the firm which acts on behalf of Finspire, Finspire being
a company which lends money to borrowers
from time to time. When the
original application for bridging finance was made by the 1
st
Respondent Finspire to whom the application was made could not
accommodate the 1
st
Respondent as it did not have
sufficient funds available at that time. The Applicant presumably
from knowledge he had as an employee
in the firm of attorneys
representing Finspire became aware of the 1
st
Respondent’s
application and he himself agreed to make an advance to the 1
st
Respondent from his own funds. Quite clearly the loan was to have
been for a short duration and accordingly carried a high rate
of
interest.
I do not accept that
the 1
st
Respondent was under any illusion as to the origin
of the moneys it took on loan. The only reason for any mistake on its
part could
have been only because it did not pay proper attention to
the wording of the document to which it subscribed which provided for
the loan. Moreover there does not appear to be any reason why the
identity of the lender should be of any consequence or for the
Applicant to have misrepresented the position or to have deceived the
1
st
respondent in this regard.
The loan I find to
have been made by the Applicant to the 1
st
Respondent and
that the amount owing and overdue for payment is as alleged and
claimed by the Applicant.
The question of the
sureties has now to be considered. I have already indicated that
judgment cannot be granted against the Trust.
The liability if
any, of the sureties stems from a Deed of Suretyship attached to the
Loan Agreement. The suretyship is an annexure
thereto referred to as
Schedule “A”. The document is addressed to “Finspire
Capital (Pty) Ltd (collectively and
individually “the
creditor”)”. The meaning of this is not clear and the
document was obviously tendered for use
where more than one creditor
is referred to.
The document
proceeds to record that on behalf of Round Square Property
Developments (the debtor), those subscribing to the suretyship
bind
themselves as sureties to each of the creditors. Reading this
benevolently it means that the signatories bind themselves sureties
for the 1
st
Respondent to Finspire Capital (Pty) Ltd.
There is an obvious discrepancy to be found here as the creditor in
the main agreement
is the applicant yet the suretyship clearly is in
favour of Finspire. It does not in my view assist the Applicant that
Finspire
is its agent at least for the collection of moneys. The
difference between the suretyship and the principal agreement can be
accounted
for by the haste in which the documents were drawn and the
apparent carelessness in their drafting by the Applicant himself. In
any event the Deed of Suretyship is in the first place signed by the
2
nd
Respondent, secondly by the Taute Family Trust,
thirdly by Michael Taute, fourthly by G J Janse van Rensburg, fifthly
by A S Janse
van Rensburg who is the same person as Allinda Salome
Taute. For this purpose she apparently used her maiden name.
The signatories in
terms of the Agreement purport to bind themselves jointly and
severally to each of the creditors, who as we have
seen is Finspire
Capital (Pty) Ltd. The Applicant has elected not to proceed with its
claim for rectification and in the absence
of rectification the
surety’s liability cannot be founded on this document. The
Applicant attempted to meet this problem
by arguing for a cession by
Finspire to the Applicant of its claim against the 1
st
respondent which would by operation of law vest the Applicant with
the rights against the sureties as well. It is futile so to
argue for
the Applicants evidence is that Finspire did not lend the money in
the first place. There is therefor no place for a
cession in its case
on the facts.
In the cases,
however, of the 5
th
and 6
th
Respondents their
liability also arises under a mortgage bond which was registered in
favour of the Applicant. From the terms of
the mortgage bond it is to
be inferred that the Loan Agreement was the obligation which it was
sought to secure and as such the
mortgagors namely the 5
th
and 6
th
Respondents are liable to the Applicant for the
obligation undertaken by them in terms of the bond.
The other question
which I have to decide is the question of interest. I have no
difficulty in granting judgment for interest at
5.5 % per annum
provided for in the Agreement. My misgivings relate to the further 2
% per month payable in respect of arrear instalments.
Clearly the
interest on arrear instalments is a form of penally which may be
treated in terms of the Conventional Penalties Act.
I have considered
reducing the rate in terms of the powers I have under that Act but
have decided that in view of the Respondents’
attitude, that
such reduction should not be made. The loan was intended for a short
period, and the failure of the 1
st
Respondent to honour
its obligations has occasioned considerable distress to the
Applicant.
The Respondent does
not deny that it is indebted but persists in asserting that
indebtedness is owing to Finspire, despite a disclaimer
from that
company by its directors. No explanation is forthcoming as to why the
Respondents have not tendered to pay either Finspire
or the Applicant
the amount demonstrably overdue
In the premises
judgment will be granted against the 1
st
, 5
th
and 6
th
Respondents for:
1. Payment of the
sum of R573 125,40;
2. Interest on the
said amount calculated at the rate of 7.5 % per month from the 15
th
of September 2009 to date of payment;
3. Costs of the
application.
SAPIRE, A J
NORTH GAUTENG
HIGH COURT
PRETORIA
ATTORNEYS
FOR THE PLAINTIFF
:
VAN ZYL, SMITH
&ASSOCIATION
Johan Rissik Drive
WATERKLOOF
PRETORIA
P O Box 14530
HATFIELD
0028
Tel:
012-3466292
Ref:
Mr
Smith/AB132
ATTORNEYS FOR
THE DEFENDANT:
BOTHA, WILLEMSE,
WILKINSON ATTORNEYS
Cameron Street 446
BROOKLYN
PRETORIA
Tel: 012-3463111
Ref:
C
Willemse
COUNSEL
FOR PLAINTIFF:
J
L VAN DER MERWE SC SC
P VERMEULEN
COl'NSEL
FOR RESPONDENT:
C
SEVENSTER