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[2021] ZAGPJHC 756
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Nature's Choice (Pty) Ltd v Ballendene (2020/1935) [2021] ZAGPJHC 756 (22 July 2021)
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REPUBLIC
OF SOUTH AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
GAUTENG LOCAL
DIVISION, JOHANNESBURG
CASE NUMBER: 2020/1935
REPORTABLE:
Not
OF
INTEREST TO OTHER JUDGES: Not
REVISED.
Date
22 July 2021
In
the matter between:
NATURE’S
CHOICE (PTY)
LTD
PLAINTIFF
AND
BALLENDENE
MATTHEW JOHN
DEFENDANT
Delivered:
This judgment was handed down electronically by circulation to the
parties’ legal representatives by email. The
date for hand-down
is deemed to be 22 July 2021
Summary:
Application
– summary judgment. A credit provider obliged to registered in
terms of the National Credit Act. Unjustified enrichment.
Failure to
registered as credit provider in terms of the National Credit Act.
The agreement unlawful and invalid. Court may must
make just and
equitable order in terms of section 189(5) of the National Credit
Act.
JUDGMENT
Molahlehi
J
Introduction
[1]
This is an
application for summary judgment against the defendant/respondent,
Mr. Ballenden. The plaintiff/applicant, Nature's Choice
(Pty) Ltd,
claims payment of the sum of R800 000.00, advanced as a bridge loan
to the respondent/defendant during December 2018.
[2]
The parties to the
bridged loan agreement are Nature's Choice and Matthew John
Ballenden. The "Borrower" in the agreement
is defined as
Matthew John Ballenden. The agreement permitted the respondent to
choose the bank account in which the loan should
be deposited. The
respondent provided the following bank account in which the loan
should be deposited:
Name
of Account: Fresh Earth Bake House
Bank:
Nedbank
Branch:
Strydom Park
Account
Number: [....]
Reference:
Nature's Choice Loan
[3]
It is common cause,
if not that there is no dispute, that after the conclusion of the
loan agreement, parties concluded two separate
addenda whose purpose
was to extend the due date for the payment of the loan. The first
addendum extended the payment date to 1
April 2019, and the second
extended the date to 31 May 2019. It is apparent from the copies of
the addenda that the respondent
was a party in the addenda. He also
signed the same in his capacity.
[4]
The parties further
concluded a pledge and cession agreement also annexed to the papers
as an annexure "POC5." The purpose
of this agreement was to
provide security for the performance of the defendant's obligations
in terms of the amended loan agreement.
[5]
The terms of the loan
agreement for the summary judgment are summarised in the applicant's
heads of argument as follows:
"12.1
the applicant and the respondent intended concluding a sale agreement
in terms of which the applicant would purchase
all of the
respondent's shares in, and claims against, a company registered and
incorporated as Fresh Earth Food Store (Pty) Ltd
("fresh
earth");
12.2
prior to the implementation of the contemplated sale agreement, fresh
earth and another entity, [B]ake [H]ouse, required
working capital
12.3
the applicant agreed to advance an amount of R800,000.00 ("the
capital amount") to the defendant, as a loan,
subject to the
terms as contained in the loan agreement;
12.4
the respondent agreed and undertook to apply the whole of the capital
amount towards advancing shareholder loans to fresh
earth and/or bake
house for their working capital requirements and/or to provide
monetary assistance to fresh earth and/or bake."
[6]
The applicant
contends that it has complied with its obligations of the loan
agreement in that it has advanced the loan in the sum
of R 800,000 to
the respondent. It further contends that the payment by the
respondent became due and owing and payable by 3 May
2019. According
to the applicant, the respondent has failed, despite the demand to
effect payment in terms of the loan agreement.
[7]
It
is common cause that at the time of concluding the loan agreement and
addendum thereto, the applicant was not registered as a
credit
provider in terms of section 40 of the National Credit Act (the NCA
).
Section
40 (1) provides for the circumstances under which a credit provider
should register as such.
[1]
[8]
The loan agreement
was accordingly unlawful and thus void. The applicant contends that
in complying with its obligation of effecting
the payment in the
capital amount, it was unaware of the illegal nature of the loan
agreement. The capital amount of the loan was
effected in two
payments of R 790,020, and R10,009 January 2019.
[9]
Based on the above,
the applicant formulated its cause of action as unjustified
enrichment of the respondent.
[10]
In
its affidavit in support of the application for summary judgment, the
applicant avers that the respondent has failed to raise
a
bona
fide
defence
in its plea and the answering affidavit.
The
respondent's defence
[11]
In
the affidavit resisting the summary judgment application, the
respondent contends that the applicant is not entitled to the relief
sought because he has a bona
fide
defence
to
the claim. His main defence in this regard is that the sum claimed by
the applicant was never paid to him but was rather paid
to a company
known as Flesh Gluten-Free Bake House (Pty) Ltd. However, he does not
dispute the receipt of the amount but states
that Metier Private
Equity paid it to Fresh Earth. He states the following in his plea:
"10.2
The Defendant admits receipt of the amount of R800 000.00.
[12]
In paragraphs, 10.3
to 10.6, the plea the respondent essentially denies having received
the sum of R800 000.00 from the applicant
and that he has been
enriched.
[13]
As alluded to
earlier, the respondent in his affidavit resisting the summary
judgment contends that he did not receive the amount
of R800 000.00.
The explanation that he proffers for the above admission is as
follows:
"I
am aware that in paragraph 10.2 of my plea I admit receipt of the
amount of R800000. This is unfortunately some loose wording
on my
part which arose from confusion in my instructions to my attorneys
prior to them drafting the plea. What l meant to convey
is that
payment of the R800 000 was made. As is clear from the plaintiff's
own particulars of claim, that payment was not made
to me but to
Fresh Earth. This is a factual error on my part which l intend to
amend by way of a notice of amendment of paragraph
10.2 of my plea."
[14]
In his heads of
arguments, the respondent contends that he can amend his plea in
light of the denial of receipt of the amount in
question.
Legal
principles
[15]
It is trite that rule
32 of the Rules provides for a mechanism, in the form of summary
judgment procedure, to enable an applicant
to obtain a judgment
against the respondent without having to get the same relief through
the trial procedure. This rule which
was amended on 1 July 2019, now
provides for the following requirements for an application of summary
judgment:
"(1)
The plaintiff may after the defendant has delivered a plea,
apply to Court for summary judgment on each of such
claims in the
summons as is only —
(a)
on a liquid
document;
(b)
for a liquidated
amount in money;
(c)
for delivery of the
specified movable property; or
(d)
for ejectment,
together with any claim for interest and costs."
[16]
In
terms of rule 32 (2) of the Rules, the plaintiff is required to file
an affidavit "verifying the cause of action' and that
the
defendant has no
bona
fide
defence
to the claim. The plaintiff is also required to state that the notice
of intention to defend by the defendant was served
solely to delay
the finalisation of the claim.
[2]
[17]
The
other principle is that, in general, for the respondent to succeed in
avoiding a summary judgment application, he or she has
to satisfy the
Court that he or she has a
bona
fide
defence
to the claim on which the summary judgment is being applied for.
[3]
In
the often-quoted formulation of the approach to an affidavit opposing
summary judgment, the Court in
Maharaj
v Barclays National Bank,
[4]
said
the following:
“
Accordingly,
one of the ways in which a defendant may successfully oppose a claim
for summary judgment is by satisfying the Court
by affidavit that he
has a
bona
fide
defence
to the claim."
[18]
It
is apparent from the pleadings that the applicant's claim is based on
condition
ob
turpen vel iniustam causa.
In
National Credit Regulator v Opperman and Others,
[5]
the Constitutional Court in dealing with the enrichment action said
at para 15:
“
A
party who wants to claim the restitution of money paid or goods
delivered in pursuance of an unlawful agreement cannot do so under
the agreement and must make use of an action based on the unjustified
enrichment of the receiver. Professor Visser describes the
basic
function of the law of unjustified enrichment as "to restore
economic benefits to the plaintiff, at whose expense they
were
obtained, and for the retention of which by the defendant there is no
legal justification." The enrichment action relevant
to this
matter is the
condictio
ob turpem vel iniustam causam.
Its
requirements are generally described as follows: ownership must have
passed with the transfer; the transfer must have taken
place in terms
of an unlawful agreement; and the claimant must tender the return of
what he or she received."
[19]
Section 189 (5) of
the NCA reads as follows:
"If
a credit agreement is unlawful in terms of this section, despite any
other legislation or any provision of an agreement
to the contrary, a
court must make a just and equitable order including but not limited
to an order that –
the
agreement is void from the date the agreement was entered into."
[20]
To succeed in a claim
of this nature the plaintiff/applicant must satisfy the following
requirements:
(a)
The
amount claimed must have been transferred pursuant to an illegal and
thus void and unenforceable agreement.
[6]
(b)
Where
the plaintiff has received a benefit out of the illegal contract,
he/she must tender the return of ever he/she may have received.
[7]
Evaluation
and analysis
[21]
It is important to
note that there is no dispute as to the conclusion of the loan
agreement. Similarly, on a proper analysis of
the facts, the status
of the agreement as being unlawful is also not in dispute. In
addition, the payment of the amount in issue
is not in dispute. The
real issue is whether the respondent received the amount or some
other entity received the amount.
[22]
Although the
respondent/defendant contends that the capital amount was not paid to
him personally but rather to Fresh Food, he,
as already indicated,
conceded in his plea at paragraph 10.2 that he received the money. In
my view, the suggestion in his affidavit
opposing summary judgment
that the concession was made due to the use of "loose wording"
in the instruction given to
his attorney is unsustainable. It is in
fact, significant in this regard that there is no confirmatory
affidavit from his attorney
confirming the alleged "confusion"
in the plea that arose as a result of "loose wording" in
the instruction.
[23]
It is also
significant to note that the two addenda were concluded with the
respondent/defendant in his personal capacity and with
the risk of
repetition, he conceded in his plea that he received the money. He
received the money under an unlawful credit agreement.
Thus
considering his papers and the common cause facts, there is no doubt
that the money was paid to him, and thus the just and
equitable
relief lies in restitution.
Order
[24]
In the circumstances,
the following order is made:
1.
Summary judgment is
entered in favour of the applicant against the respondent for-
(b)
Payment of the
sum of R800 000.00,
(c)
Interest
on the aforesaid amount at the prescribed rate, a
tempore
morae.
(d)
Cost
of the suit
.
___________________
E
MOLAHLEHI J
JUDGE
OF THE HIGH COURT
APPEARANCES:
For
the plaintiff: Adv D Van Niekerk
Instructed
by: Cliff Dekker Hofmeyer Inc.
For
the defendant: Adv R Goslett
Instructed
by: Dewey Hertzberg Levy Inc.
Heard:
4 May 2021
Delivered:
22 July 2021
[1]
Section
40(1) of the NCA provides: “A person must apply to be
registered as a credit provider if –that person, alone
or in
conjunction with any associated person, is
the
credit provider under at least 100 credit agreements, other than
incidental agreements."
[2]
FirstRand
Bank Ltd v Shabangu and others
2020 (1) SA 155
(GJ).
[3]
Joob
Joob Investments (Pty) Ltd v Stocks Mavundla Zek Joint Venture
2009
(3) All SA 407
(SCA) at para 33.
[4]
1976
(1) SA 418
(A) at 4268-C.
[5]
(CCT
34/12)
[2012] ZACC 29
;
2013 (2) BCLR 170
(CC);
2013 (2) SA 1
(CC)
(10 December 2012),
[6]
Afrisure
CC and Another v Watson NO 2009 [2] SA 127 paragraph 5.
[7]
MCC
bazaar v Harris and Jones (Pty) Ltd 1954 [3] SA 158 [T] at 162A.