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[2020] ZAECPEHC 44
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Sedwin Investments (Pty) Ltd v Datnow and Another (1819/2017) [2020] ZAECPEHC 44 (10 November 2020)
IN THE HIGH COURT OF SOUTH AFRICA
EASTERN
CAPE LOCAL DIVISION
–
PORT
ELIZABETH
Case
No.: 1819/2017
In
the matter between:
SEDWIN
INVESTMENTS (PTY) LTD
Applicant
and
NATHAN
ALEC DATNOW
First Respondent
MARIA
JOHANNA DATNOW
Second
Respondent
JUDGMENT
REVELAS
J:
1.
In this application the applicant seeks to
enforce a settlement agreement it had concluded with two respondents
on 7 May 2019.
During May 2017 the applicant, as plaintiff
instituted an action against the respondents (defendants) for the
payment of four separate
amounts advanced to the respondents as
loans, plus interest on these amounts, and costs on the scale as
between attorney and own
client. The applicant sought the
following orders:
1.
Claim A
:
1.
An order rectifying the written
acknowledgement of debt, Annexure “B”, by the
substitution of the sum and words of R3 062 500.00
(Three
Million Sixty Two Thousand Five Hundred Rand) and R3 000 000.00
(Three Million Rand) in paragraph 1.2 thereof;
2.
An order directing First Defendant to pay
Plaintiff the sum of R3 250 000.00 (Three Million Sixty Two
Thousand Five Hundred
Rand) and interest thereon;
2.
Claim B (in the alternative to Claim A,
and only in the event
of
a finding that the agreement is illegal and void for non-compliance
with the Consumer Protection Act)
:
1.
Payment of R2 500 000.00 (Two
Million Five Hundred Thousand Rand) and interest thereon;
3.
Claim C
:
1.
An order directing First and Second
Defendants to pay the sum of R1 325 000.00 (One Million
Three Hundred and Twenty Five
Thousand Rand) jointly and severally,
the one paying the other to be absolved;
2.
Interest thereon at 15.5% per annum from
28
th
February 2014 until date of final payment;
4.
Claim D (in the alternative to Claim C,
and only in the event
of
a finding that the agreement is illegal or void, which is not
conceded)
:
1.
Payment of R1 025 000.00 (One
Million and Twenty Five Thousand Rand);
2.
Interest thereon
a
temporae mora
at the prescribed rate of
interest;
3.
Costs of suit on the scale as between
attorney and own client.
2.
The claim for rectification of the
agreement is not opposed on the pleadings and it was admitted that
the sums of money referred
to, were advanced and those repayments
with which the respondents had been credited were not in contention.
3.
The alternative claims B and D are
enrichment claims, and applicant’s case would have been that in
the event of the agreement
having been void for non-compliance with
the National Credit Act, as the very least Applicant was entitled to
repayment of the
admitted capital sums which had been advanced
together with interest thereon at the prescribed interest rate
a
tempore morae
.
4.
The total sums which had been advanced as
loans by the applicant to the respondents together with
in
duplum
interest would have been
R7 050 000.00. At 15,5% per annum since February 2014 by
the time of the settlement in May 2019.
The interest on the capital,
compounded monthly in terms of the parties’ agreement, would
have exceeded the
in duplum
limitation on interest, by some R600 000.00.
5.
The capital sums were advanced to the first
respondent, a businessman conducting business under the name
Shawshank Construction,
as bridging finance in respect of certain
large construction contracts. The first respondent claims that he had
concluded such
contracts with the Department of Public Works,
performed in terms of them and had not been paid in accordance with
their agreements.
This resulted in the need for the loans to
himself and the second respondent, his wife. According to him they
were divorced in
2010.
6.
As can be gleaned from the many
applications and postponements following the summons, the matter has
a long history. The matter
was eventually declared trial ready and
set down for 7 May 2019. The agreement of settlement was finally
concluded and signed following
a period of negotiations which were
recorded in writing and form part of the papers. Certain amendments
were affected to the agreement
by the first respondent who at the
time represented both the respondents and was agreed to the
applicant. The most important amendment
was the reduction of the
amount owed by the respondents from R7 100 000.00 to R7
000 000.00. Interest was amended to
be at prime rate instead of
15,5% per month. The agreement was signed and dated by the parties on
7 May 2019 although and was drafted
on 3 May 2019.
7.
The respondents, represented by the first
respondent (two sets of attorneys having withdrawn - the latest on 1
April 2019) opposed
the application to enforce the agreement on the
basis that no settlement agreement was reached and if it were, the
applicant had
repudiated the agreement and that repudiation was
accepted by the respondents.
8.
According to the first respondent, the
agreement was signed in error because they did not realise that the
second respondent’s
initial capital exposure was only for R1
325 000.00 and it was never intended that she should jointly and
severally with the
first respondent be exposed to R7 000 000.00. The
first respondent also argued that the agreement itself was only a
counter proposal
not countersigned by the applicant.
9.
It is common cause on the papers that prior
to the agreement sought to be made an order of court, the first
respondent proposed
that they settle on the basis that an immovable
property owned by the respondents be transferred to the applicant.
The value of
the property was considerably more than the sum
proposed, being in excess of R23 million. The applicant was not
amenable to this
proposal. The first respondent thereafter
agreed to the settlement amount proposed the applicant subject to a
payment by
the applicant to the respondents in the amount of R1 500
000,00. The first respondent stated he needed this money to rezone
the
property the respondents intended to transfer to the applicant.
The applicant was not inclined to pay him.
10.
It is common cause that after much
correspondence was exchanged between the parties before the drawing
up and signing of the agreement
in question. The first respondent
phoned the applicant’s attorney (the deponent to the founding
affidavit) on the late afternoon
6 May 2019 stating that he now
wished to settle the matter - thus initiating the finalisation of the
agreement - and after effecting
the amendments referred to above, he
emailed the agreement to the applicant’s attorney at 18h00,
confirming that he did so
in a WhatsApp message. The attorney
confirmed receipt thereof in a phone call. The flights of the legal
representatives and witnesses
from Cape Town who would have attended
the trial if it proceeded were then cancelled. The matter was
settled.
11.
However, the following morning the first
respondent indicated that that he wished the second respondent to be
removed from the agreement.
The applicant’s attorney stated
that the applicant could not agree to this. Consequently the
settlement agreement could not
be made and order of court and the
matter was removed from the roll. The first respondent stated that
when the applicant’s
attorney refused to accede to his request,
he understood “
from this that
the Applicant’s view was that there were no agreements between
the parties and that the trial would proceed
on 9 May 2019 on the
pleadings and I was satisfied with that.”
In
my view, that was a rather self-serving interpretation given to what
had transpired between the parties during the previous few
weeks and
previous evening in particular. The applicant’s attorney had
done all and more that was required of him to ensure
that the
settlement agreement was properly drafted, concluded signed and could
be made an order of court. That is clearly borne
out by the
correspondence attached to the founding affidavit and which is not in
dispute.
12.
The first respondent claimed in his
answering affidavit that he was always
bona
fide
in his dealings with the
applicant. This statement is belied by the first respondent’s
conduct in the matter. In his answering
affidavit and even at the
latest pre-trial meeting held where he was present, he stated that he
acted on behalf of the second respondent.
The settlement agreement
was drafted and sent to him long before the trial. I find it most
unlikely the second respondent’s
exposure was not fully
considered by the two respondents before the agreement was concluded.
In any event, the second respondent
did not depose to a confirmatory
affidavit to state her case in this regard. Furthermore, the
applicant’s attorney explained
the amounts claimed and how they
were arrived at in the applicant’s papers.
13.
More tellingly, if there had been no
agreement finally concluded between the parties the previous evening
of 6 May and finalised
on 7 May 2019, the respondents would not have
required the consent of the applicant to have the second respondent
removed from
the agreement which the first respondent initiated to
finalise and agreed to the previous evening. The agreement was
clearly not
a counter proposal as the first respondent then alleged
at the eleventh hour in an effort to resile from the agreement. The
respondents
are not in a position to assert that they do not owe the
money in question to the applicant. They have never done so. After
much
litigation and attempts by the respondents to evade payment, the
parties finally concluded a settlement agreement, despite the first
respondent’s attempts to resile therefrom and misleading the
court. That should also justifies a punitive costs order.
14.
In the circumstances the following order is
made:
1.
The Settlement Agreement dated 7 May 2019,
attached to the founding affidavit as Annexure CB1 is made an order
of court.
2.
The first and second respondents are to pay
the applicant
’
s costs of the
application on a scale as between attorney and own client.
_____________________
E REVELAS
Judge
of the High Court
Appearances
:
For
the Applicant
: Advocate R
Stelzner, instructed by De Waal Boshoff Inc, c/o Kaplan Blumberg
Attorneys, 1
st
Floor, Block A, Southern Life Gardens, 70 – 2
nd
Avenue, Newton Park, Port Elizabeth
For
the Respondents
: Adv Barnett,
instructed by Van Heerdens Attorneys, 7 Bird Street, Central, Port
Elizabeth
Date heard:
25 June 2020
Date delivered: 10
November 2020