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2023
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[2023] ZAGPPHC 708
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Lombaard v Moolgem (Pty) Ltd and Others (23/076940) [2023] ZAGPPHC 708 (22 August 2023)
IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
Case No. 23/076940
(1)
REPORTABLE: NO
(2)
OF INTEREST TO OTHER JUDGES: NO
(3)
REVISED: NO
SIGNATURE
DATE: 22 August 2023
In
the matter between:
DIRK
VOS
LOMBAARD
Applicant
and
MOOLGEM
(PTY) LTD
First
Respondent
PSG
WEALTH FINANCIAL PLANNING (PTY) LTD.
Second Respondent
PSG
INVEST (PTY) LTD T/A PSG INVEST
Third
Respondent
DUROC
FOODS
CC
Fourth Respondent
ANDRIES
FREDERIK LOMBARD
Fifth
Respondent
JUDGMENT
DE
VOS AJ:
1
The fourth respondent (“tenant”) entered into a
lease agreement with Moolgem. The fifth respondent stood as surety
for
the tenant. Moolgem, as the landlord, required security for the
performance in terms of the lease agreement. The applicant provided
this security in the form of a "collateral cession". The
collateral cession is the applicant's R 385,596.44 investment
with
the second and third respondents, PSG.
2
In short, Moolgem’s rights, as contained in the lease
agreement, were secured in two ways. One, if the tenant breached the
agreement, Moolgem could turn to the fifth respondent, who stood as
surety for the tenant. Two, the applicant provided Moolgem
with a
collateral cession for R 385,596.44.
3
The lease agreement between Moolgem and the tenant ran into
difficulties. Moolgem claims it spent almost R 3 million to prepare
the premises for the tenant and is entitled to more than R 723 974.36
in outstanding rent from the tenant. The tenant disputes the
validity
of the lease agreement and its alleged breach.
4
Instead of litigating against its tenant, Moolgem has called
up the collateral cession. The applicant contends that Moolgem cannot
call up the cession. The applicant's case is that Moolgem’s
conduct is premature. Before Moolgem can call up the cession,
a court
has to determine the tenant’s indebtedness to Moolgem. To
establish the merit of the applicant’s claim, the
Court
considers the relevant clause in the cession agreement -
“
If the cessionary
requests a withdrawal, PSG will sell the units and pay the cessionary
the amount indicated in this form. PSG is
not required to give notice
of the withdrawal to the cedent.”
5
The unambiguous wording of the clause is that Moolgem can
request a withdrawal. The request can be made without notice to the
applicant.
The clause limits the amount that can be called up to R
385,596.44.
6
The applicant’s interpretation of the clause, that
Moolgem can only call up the cession after a court has determined the
extent
of the tenant’s liability, is not apparent from the text
of the clause. Nothing in the text supports the applicant's
interpretation
of the clause. Nothing in the language of the clause
requires Moolgem to first litigate against the tenant before being
able to
call up the cession.
7
The express language of the clause is at odds with the
applicant’s interpretation. The clause’s express
provision that
Moolgem can withdraw the money without notice to the
applicant – is at odds with an interpretation that a court must
first
determine liability before Moolgem is entitled to rely on the
clause. The applicant's position is at odds with the terms the
applicant
had bound itself to. The agreement's express terms provide
that Moolgem need not even provide notice to the applicant, let alone
prove its case against the tenant in Court.
8
I have also not been provided with anything in terms of
context which supports the applicant’s interpretation of the
clause.
If anything the surrounding clauses in the cession
agreement supports Moolgem’s interpretation. For example, the
cession
agreement severely restricts the applicant’s ability to
use the ceded investment, to the extent that the applicant cannot
use
the investment at all, without Moolgem’s written consent.
9
The applicant contends that Moolgem’s interpretation of
the clause permits parate executie. Our courts have approved the
concept
of cession in securitatem debiti, which allows for the
realisation of property ceded as security in case of a breach.
Parate
executie allows the cessionary to realise the ceded
property without following a judicial procedure. Such clauses
have been
held to be valid, despite removing the court’s
oversight in relation to the realisation of the property, as long as
it is
not enforced in a manner against public policy.
10
Accepting the applicant’s case, that the clause permits
parate executie, the applicant has made out no case that its
implementation
is unfair, contra bonos mores or that Moolgem has
failed/will fail in its fiduciary duties. The applicant’s
case is
not that the clause is an improper parate executie clause.
Rather, the applicant's case is that the cession agreement does
not
permit Moolgem to rely on the clause – without a court first
determining the extent of the tenant’s liability.
11
The Court has been provided with nothing in the text or the
context which supports the applicant’s interpretation of the
cession
agreement. The Court is not persuaded that the
applicant has made out a case to prevent Moolgem from calling up the
cession.
The applicant has failed to make out a prima facie
right in this regard. There remain, down the road, other
remedies available
to the applicant, albeit not in the form of an
interdict based on these facts.
Order
12
The parties came before Court on Tuesday, 15 August 2023. PSG
had indicated it would make the transfer on 21 August 2023. To permit
the proper consideration of the matter and prevent PSG from paying
out whilst the Court is seized with the matter, I granted an
interim
order on 21 August 2023 prohibiting the investment from being paid
out. The order was granted, pending a further
order of this
court (paragraph 4(c)). The interim order ensured that PSG would only
pay out the investment after a final decision
could be made by this
Court. Having now considered the matter and perused the papers, I
grant the following final order.
12.1
The Court dispenses with the forms and services provided for in
the
Uniform Rules of Court and allows the matter to be heard as one of
urgency under Uniform Rule 6(12).
12.2
The Court dismisses the application.
12.3
Each party is to pay their own costs.
12.4
This order operates as the order referred to in prayer 4(c) of the
interim order of 21 August 2023. Consequently, the operation of the
interim order of 21 August 2023 seizes with the handing down
of this
order.
I
DE VOS
Acting
Judge of the High Court
This
judgment was prepared by Acting Judge, Irene de Vos. It is handed
down electronically by circulation to the parties or their
legal
representatives by email, by uploading it to the electronic file of
this matter on Caselines, and by publication of the judgment
to the
South African Legal Information Institute. The date for hand-down is
deemed to be 22 August 2023.
HEARD
ON:
16
August 2023
DECIDED
ON:
22
August 2023
For the
Applicant:
Y
Coertzen
Thomas
Grobler Attorneys
For the
Respondent:
RS
Shepstone
Instructed
by
Richmond
Attorneys