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[2019] ZAGPPHC 12
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Human v Haynes and Another (61708/2011) [2019] ZAGPPHC 12 (31 January 2019)
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REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
CASE NO: 61708/2011
31/1/2019
In
the matter between:
PIETER
CHRISJAN HUMAN
Plaintiff
and
HM
HAYNES
First Defendant
EB OSMERS
Second Defendant
JUDGMENT
TEFFO, J:
[1]
The plaintiff sued the defendant for
payment of the sum of R546 000,00 based on a written loan agreement,
alternatively, he claims
payment on the basis of unjustified
enrichment. According to the plaintiff, the terms of the loan
agreement were that he would
lend and advance to the defendants
jointly and severally, a capital amount of R546 000,00. The loan
amount would bear interest
at a rate of 15% per annum, compounded
monthly. It would be repayable by the defendants by effecting payment
of the amount of R376
000,00 on the date of registration of a
mortgage bond over the property situated at [….] (the
property). The outstanding
amount of R170 000,00 would be payable by
the end of June 2009.
[2]
In their plea the defendants denied that
they, or any of their corporate entities, were obliged to repay the
amount claimed. They
pleaded that the loan agreement relied upon by
the plaintiff was simulated. The true agreement between the parties
was an oral
agreement in terms of which the plaintiff would refinance
their 4 (four) corporate entities referred to in the plea. In
exchange
thereof he would acquire the right to participate in the
management of their businesses. It was further alleged that the
defendants
would in terms thereof not be entitled to the proceeds of
the refinancing but the proceeds would be utilised solely to pay the
creditors of the said entities.
[3]
The defendants pleaded that the loan
agreement violates the
National Credit Act, 34 of 2005
("the
NGA")
and is void in terms of
the provisions of
sections 89(2)(d)
,
89
(5)(a) and
89
(5)(c) of the
NCA.
[4]
As regards the alternative claim of
unjustified enrichment, the defendants denied that they had received
any portion of the monies
allegedly lent and advanced by the
plaintiff to them and that their estates were enriched at all.
[5]
The issues for determination in respect
of the main claim are:
5.1
Whether
the loan agreement concluded between the parties was simulated and
formed part of a larger business arrangement between
the parties.
5.2
Whether
an oral agreement was concluded.
5.3
Was
the plaintiff obliged to register as a credit provider, prior to
entering into the credit agreement with the defendants, and
the
consequences thereof, if it is found that he was obliged to register
and was not so registered.
[6]
In respect of the alternative claim of
unjustified enrichment, the issue to be determined is:
6.1
Whether
payment of the amount of R546 000,00 was made to the first defendant.
If so, whether the plaintiff was impoverished and
the first defendant
enriched as a result of the payment.
The
evidence
[7]
The plaintiff testified on his own
behalf without calling witnesses. Documentary evidence which
consisted of the written loan agreement
and the so-called chicken
agreement also formed part of the record.
[8]
Mr Pieter Chrisjan Human, the plaintiff,
testified that the loan agreement was concluded by the parties and
signed by the defendants
on 30 April 2009 in Phalaborwa and by him on
1 May 2009 in Sedgefield, where he was on holiday. The first
defendant flew down from
Phalaborwa to Sedgefield to have the loan
agreement signed and for her to collect the cheque for the loan
amount from the plaintiff.
[9]
Prior to concluding the loan agreement,
the defendants telephonically told him about the job they had to do
at Phalaborwa Mine,
which required them to buy electric cables. They
needed money to buy the cables and requested a loan. As he was
already in partnership
with the defendants in the chicken business,
he granted them the loan.
[10] The first
defendant collected the cheque for the sum of R546 000,00 from him.
[11]
He explained that the parties agreed
that the amount of R376 000,00 would be repaid on the date of
registration of a bond over the
property, as the defendants had told
him that they were in the process of registering a bond which would
take two months and that
the repayment would be done once the bond
was registered. The repayment of the remaining amount of R170 000,00
was agreed upon,
after the defendants had indicated that the mine
would pay them 60 days after they had completed the cables' job.
[12]
He testified that the purpose of the
loan agreement was to enable the borrowers or their nominee to settle
various debts owed by
Genex Power Services (Genex) and Amoret Trading
(Amoret). Genex was the defendants' business entity that did work for
Phalaborwa
Mining. It needed money to buy electrical cables. He had
no business with Genex. He knew nothing about Amoret. He did not
acquire
any interest in Amoret and had never participated in the
management of the two business entities.
[13]
The defendants have not repaid the
amounts, as agreed. The bond over the property was only registered
with Absa Bank in 2011.
[14]
After the due date of the agreed
repayment date, he phoned the first defendant several times inquiring
about payment. She then told
him that they owed him nothing.
[15]
Prior to concluding the loan agreement
with the defendants, he had a joint business venture with them in the
chicken business and
their relationship was bad. He wanted to know
what was going on in their books of account. He did not get any
answers. Eventually
the venture in the chicken business was
liquidated. The two business entities, Win a Way and Quality Times,
which were involved,
were both liquidated. He suspected that the
defendants had been mismanaging and misusing the funds in the two
business entities.
He had 50% shares in the chicken business and the
other 50% shares was owned by the first defendant. After he had
brought the liquidation
application, the assets of the entities were
sold. He bought them through one of his business entities.
[16]
The loan agreement was drawn by his
former wife, who was an attorney. He was not advised about the
provisions of the NCA when the
loan agreement was concluded. He was
not aware of the requirements for the lenders at the time. He is not
in the business of borrowing
people money. He only lent the
defendants the sum of R546 000,00, being their business partner.
[17]
A certificate of balance had been
attached to the plaintiffs documents to prove the defendants'
indebtedness to him.
[18]
He testified that, in terms of the
chicken agreement that he had concluded with the defendants in March
2009, he held a loan account
of R2 m in the property company and the
defendants held R4 m. Further that the defendants had to finance the
equipment in the amount
of R2,5 m. The first defendant ran the
chicken business at the farm on behalf of Quality Times. In terms of
the agreement she would
get a salary of R25 000,00 per month, which
was supposed to come from the working capital. Although that was what
was agreed upon,
the deal changed as the properties had not been
registered in the names of the defendants. Some of the monies had to
be used to
pay the bonds and to transfer the properties to Win a Way.
He estimated that he could have contributed about R2,3 m working
capital
to the business.
[19]
He denied the first defendant's evidence
that she did not receive a salary as agreed because there was no
money. He was adamant
that he paid an amount of R2,3 m in the
business account. He contended that the business was a running
business which received
cash throughout. He testified that from 2009
to 201O when the business was liquidated, he never checked the bank
statements of
the business. He was not allowed to do so and that was
where the problems started. He did not have access to the bank
account of
the business. He could not recall when the properties were
registered in Win a Way Investments, but admitted that he had stopped
the working capital as the amounts he had paid exceeded the amount
that was agreed upon and all the cash that had been received
by the
business, was not accounted for.
[20]
There was no discussion with the
defendants about who was going to pay the salaries, feed the chickens
and pay the other expenses.
[21]
He conceded that he liquidated the
chicken business and that the defendants were never paid any money
for the farms, as he had to
pay for the bonds on the properties. When
told that the defendants were never paid any money for the farms, he
replied that if
they did not take the money that was there for the
sale of the chickens, there would have been money for everyone. He
conceded
that he cannot prove that the defendants took the money as
he testified.
[22] He was
referred to the tables on pages 25 and 26 of the trial bundle, which
set out how the sum
of R546 000,00 was utilised after he lent it to
the defendants. It was put to him that the first defendant would
admit receipt
of the money, but contends that she used the money to
finance the various business entities of the defendants because he
refused
to pay her salary. The various companies financed Quality
Times. His response was that he did not know. He was seeing the
tables
for the first time. He testified that he did not know the
correctness of the statement as at the time he loaned the defendants
money, he had not been told that the defendants could not finance the
chicken business. He was adamant that they should have told
him and
questioned why the information only came when the matter was on
trial.
[23]
He was further referred to pages 29 to
64 of the trial bundle and told that the first defendant would
testify that on the aforesaid
pages, there was proof of the amounts
that she had to pay to the various entities, because he had stopped
the working capital and
she had to use the monies to run the chicken
business. He reiterated that he was seeing the documents for the
first time. He testified
that it appeared from the documents that the
payments were made after the due date of the repayment of the loan
amount. It was
put to him that the first defendant used the loan to
pay for the expenses to keep the business going and tie replied that
it was
the first time he heard that.
[24]
He admitted that when Quality Times and
Win a Way got liquidated, he bought their assets for R2,3 m. He
denied that he received
money from the liquidation. He testified that
his lawyers were still busy with the liquidators and according to the
information
he received, the process of liquidation could not be
finalised because the defendants have instituted claims against the
entities
that have been liquidated.
[25]
He further testified that, although he
had heard of the NCA, he does not know what it entailed. When asked
if he had tried to establish
from the defendants if they could repay
the loan, his answer was that he would not have granted them a loan
if he had known they
could not repay him. Further, he never asked
them for the income and expenditure statements, and he did not do a
credit check on
them.
[26]
He denied the first defendant's evidence
that she flew to Sedgefield for the chicken business. He denied that
the contract was not
signed, but that she had left with the cheque
and came back with the unsigned contract. He denied that the contract
was null and
void.
[27]
Regarding the claim based on unjustified
enrichment, he testified that the money he lent to the defendants,
was not paid to the
second defendant but contended that the two
defendants had traded together. He conceded that if the first
defendant did not give
the money to the second defendant, she was not
enriched. He denied that after he had paid the loan to the first
defendant, the
money was paid to Quality Times where he earned 50%
interest.
[28] He denied
that the first defendant told him when he enquired about the money,
that she could
not run the business because he had stopped the cash
flow.
[29] He admitted
that his former wife was a qualified attorney, she drew the loan
agreement and on
her advice he signed it. He further admitted that
Quality Times had an account with FNB which was in his personal name.
The first
defendant only used the account via internet. He did not
have the password to enable him to access the account. He conceded
that
he could go to the bank with his identity document and ask to
have access. However, he never interfered with the business's bank
account because once he interfered, it no longer became one person's
responsibility.
[30]
When told that his former wife had full
access to other account, which was with Nedbank, that the account had
her profile and she
could elect beneficiaries on it while the first
defendant only had internet access to it, he testified that he does
not know about
that. He has not allowed his former wife to run the
business accounts as that would have been done through his
accountants.
[31]
He denied the version of the first
defendant that after three months of running the chicken business, he
insisted on the profits
and that was the reason why he cut on the
working capital. When asked why he had cut the cash flow on the
business after three
months, he replied that he cannot recall doing
that and that if he had done it, it means there were irregularities
in the business
entities. He further denied that he caused more
expenses by requesting the first defendant to open a shop in town for
selling chicken.
The shop in town was opened as a result of the
instigation by the second defendant. He paid the capital to open the
shop in town.
[32]
He testified that he had paid more than
what he was supposed to pay in terms of the agreement for the chicken
business. According
to him, if the money that he had paid did not go
to the trading companies, it went to pay for the mortgage bonds over
the properties.
Further evidence was that the first defendant had to
keep the records of the chickens sold. He asked for the records and
problems
started between him and the defendants. As regards the
liquidation of the two entities. he testified that he was the only
creditor
who proved his claim against them at the meeting of
creditors. He was not aware of the claims that were proved by the
defendants
against the liquidated entities. That concluded the
plaintiff’s case.
[33]
Only the first defendant testified in
defence of the defendants' case. Ms Hazel Martha Haynes, the first
defendant, testified that
she met the plaintiff a few years before
she and the second defendant went into business with him. They were
friends and the plaintiff
became interested in the properties
mentioned in the chicken agreement. He wanted to buy them for
himself. He signed the agreement.
However, the deal did not go
through, because he could not get the loan for the purchase price.
Sometime thereafter she and the
second defendant concluded the
chicken agreement with the plaintiff.
[34]
The value of the properties at the time
was R6 m but they were only selling them for R4 m. The chicken
agreement was concluded and
the defendants had a R4 m loan account
and the plaintiff had to bring in R2 m capital. The plaintiff paid
the capital sum of R2
m over a few months. The capital amount was
enough to start the business and not to run it. This led to financial
problems. She
had to put more money from her company, Genex. The
company assisted with vehicles and the people she had to pay. She was
also supposed
to get a salary of R25 000,00 per month. She did not
get it as there were other expenses which she thought were more
important
to get the business running. She worked for more than 12
months without a salary.
[35]
She testified that she made various
payments from herself and her companies to various companies
(reference was made to pages 5,
13, 17, 29 to 64 of the trial
bundle.) Some of the payments were done in March 2009 prior to the
conclusion of the loan agreement
and the others were done long after
the loan agreement had been concluded. The purpose of the loan was,
in terms of the agreement,
to pay the suppliers of the various
companies to the chicken business as per the table on pages 25 and 26
of the trial bundle.
She was in business with the plaintiff and he
stopped the finances in the chicken business. She continued financing
the chicken
business from her own pocket and her business entities.
The bond to repay the loan was only approved in 2011. She could not
repay
the loan in 2009 because she did not get a bond in 2009. The
income she had in 2009 and the capital amount was used to fund the
chicken business. The monies were never recovered or paid back.
[36]
She lost ± R600 000,00 to R700
000,00 which she had used to fund the chicken business·
excluding the amount of the
properties. She also lost ± R4 m
worth of properties.
[37]
The second defendant never received a
cent from the R546 000,00 that was loaned from the plaintiff.
Although she and the second
defendant traded together, they were
different entities.
[38]
The plaintiff requested them to repay
the amount loaned from him end of June 2009 as per the loan
agreement. She told him that he
had stopped funding the chicken
business and the chicken business needed funding for the expenses. He
was very unhappy and no agreement
was reached regarding the repayment
of the loan. She could not repay the loan as the plaintiff liquidated
her two entities. She
did not get anything from the liquidation of
the two entities.
[39]
She testified that if she had obtained a
bond in 2009 and the plaintiff did not liquidate her business
entities, she would have
repaid the loan because she had an
obligation to do so in terms of the loan agreement. When told that
the agreement is therefore
not simulated as it had been pleaded in
the defendants' plea, she was adamant that with the liquidation, the
loan agreement was
simulated. It was put to her that the liquidation
only happened in 2010 and the loan agreement was concluded in 2009,
at that time
the agreement was not simulated. She was referred to
paragraph 2.2 of the defendants' plea and she could not explain the
meaning
of
" simulated".
She admitted that because the loan
agreement was concluded in 2009 and the liquidation happened in 2010,
the agreement could not
have been simulated at the time it was
entered into. The chickens had to get food and medicines and the
plaintiff withdrew the
funding, according to her.
[40] She conceded
that it was not the plaintiff's fault that she did not get the bond
to repay the
loan and that cannot be held against him. She admitted
that the plaintiff had launched an urgent application against her and
the
second defendant and they opposed it. A provisional liquidation
order was granted with a return date and on the return date the
order
was made final. In so far as the payment of the capital amount in the
chicken business is concerned, she reiterated that
the plaintiff paid
what he was supposed to pay in terms of the chicken agreement but
that, according to her, was not enough to
run the business. They
opened a shop in town and it also had expenses. She conceded that the
plaintiff did not have further obligations
to fund the chicken
business. She did not comment when told that all the three reasons
she gave for not repaying the loan were
extraneous and she could not,
as a result thereof, decide not to repay the loan.
[41]
She was asked why she had denied in the
defendants' plea that she had received the loan amount and later
admitted in her evidence
that she had received it. Her reply was that
she had denied in the plea that the defendants had not been enriched
as a result of
the payment of the loan to them and not that she had
received the loan. The money had been paid into her account and had
been utilised
to pay the different entities. It had not been received
by the defendants personally. She was adamant that as per the loan
agreement,
the loan had been agreed upon for a reason and the reason
was to pay the different companies. When told that if that was the
case,
she should have pleaded that she had received the money and had
paid it to the different companies. She replied that she relied
on
her legal team. She is not a legal person. She is a farmer. She does
not know why her legal team did not do that.
[42]
She admitted that the companies
mentioned in paragraph 3.2 of loan agreement, namely, Genex and
Amoret, were her companies. She
further admitted that as testified by
the plaintiff, Genex, had a contract with Phalaborwa Mining to do
electrical work for it
at the time and that she had required money to
assist the company to comply with its obligations under the contract
it had with
Phalaborwa Mining.
[43]
She conceded that by lending money to
one of her companies, Genex, she became a creditor of that company.
However, Genex had loaned
money to Quality Times (the chicken
business) and it was her loss when the money was lost. When told that
Quality Times had not
been enriched because it had an obligation to
pay Genex, she replied that Quality Times did not pay Genex and she
remained with
the loss. She testified that further payments were made
to Genex and to Quality Times and the money was never repaid to her.
She
was still in business but did no longer run Genex. Her further
evidence was that the reason for the loan was as per paragraph 3.2
of
the loan agreement. It was never meant for her. It was the
plaintiff's tactics. She and
the second defendant were not enriched. The
plaintiff had many tricks which she had been aware of from the
beginning. The loan agreement
should have been concluded between t le
plaintiff and her two companies, namely, Genex and Quality Times. She
could not recall
if she had told her lawyers that.
[44]
Her further evidence was that in terms
of the oral agreement the four companies mentioned in the plea,
namely, Phalapower CC, Genex,
Amoret and Katewa Trading 107, were the
borrowers of the money. When asked to explain why she was changing
her evidence, she replied
that Genex was supposed to repay the loan
with the money it had received from Phalaborwa Mine and she was
supposed to get the bond
to pay the balance. She testified that
according to her, the borrowers were only Genex and her and the loan
agreement was therefore
simulated because the second defendant was
not the borrower. When asked why she had so many explanations, she
testified that she
did not understand the word
"
simulated".
[45]
The oral agreement was concluded in
Sedgefield by her and the plaintiff before the written loan agreement
was signed. She flew to
Sedgefield where she took the loan agreement
along to Phalaborwa to be signed and later emailed it to the
plaintiff. When told
that her evidence contradicts her plea, she
testified that that could have been a mistake as the oral agreement
could not have
been concluded on the same dates of the signing of the
written loan agreement.
[46]
It was put to her that her evidence
contradicts the defendant's pleaded case in that according to the
defendant's plea, the oral
agreement between the parties was that the
plaintiff would refinance her business and in exchange thereof he
would have the right
to participate in the businesses of the
defendants and there was therefore no obligation on the part of the
defendants to repay
the loan. She replied that the plea was not drawn
by her and that it seems her counsel let her down. She concluded many
agreements
with the plaintiff and her evidence in court was the
truth. She realised while she was testifying that the version as
contained
in the plea was false. She was referred to her founding
affidavit in the application for rescission of the default judgment
that
was granted against the defendants in the matter wherein the
same allegations as referred to in the defendants' plea had been
made.
She changed and said she did not say the whole plea was false.
It was put to her that in her application for rescission of the
default judgment, she never mentioned that she and Genex would repay
the loan as she had testified. She replied that she was not
certain
if that was in the loan agreement or the rescission application. It
was put to her that what she was saying was not mentioned
in the loan
agreement and she replied that paragraph 4.2.2 of the loan agreement
confirmed her evidence.
[47]
She conceded that from the invoices
attached to the defendants' papers, certain payments were made to
institutions.
Evaluation
of the evidence
[48]
The plaintiff made a good impression on
the court. His evidence was straight to the point. He stuck to his
version under cross-examination
. His evidence, which to some extent
was corroborated by the first defendant, was credible and consistent
with his pleadings.
[49]
The defendant gave a long story about
how things unfolded between her and the plaintiff. Much reliance was
placed on the chicken
business, which according to her, was where a
certain portion of the loan went.
[50]
The loan agreement contains a
non-variation clause. According to the first defendant's evidence,
the oral agreement was concluded
before the signing of the loan
agreement. This evidence stands to be rejected as false because her
evidence about the date of the
conclusion of the oral agreement
contradicted the defendants' plea. What has been pleaded in the
defendants' plea is that the oral
agreement was concluded on the same
dates of concluding the written agreement (30 April and 1 May 2009).
This version is not probable
in that the written agreement was signed
on 30 April 2009 by the defendants and on 1 May 2009 at different
places. It is strange
that if the oral agreement was concluded prior
to the signing of the written loan agreement, their terms differed.
Why was it necessary
to enter into a written agreement which had
different terms as the oral agreement and then include a non
variation clause
in it?
[51]
Further the first defendant's evidence
about the oral agreement differed with what has been pleaded. It is
not my intention to repeat
her evidence but the fact of the matter is
that in terms of the defendants' plea, the terms of the oral
agreement were to refinance
the defendants' four business entities
and in exchange thereof the plaintiff would participate in various
other business entities
of the defendants. Nothing has been said
about the loan and the repayment thereof as mentioned in the written
loan agreement.
[52]
The versions of the defendants were so
contradictory, that the court has to reject them. They will only be
accepted in so far as
they corroborate the plaintiff's version and
the written loan agreement. I am therefore not persuaded given the
contradictory versions
to accept that an oral agreement as testified
was concluded between the parties.
[53]
I find that the loan agreement was not
simulated. It did not, in my view, form part of a larger business
arrangement between the
parties.
[54]
It is common cause that the agreement in
question is a credit agreement. The relevant part of
section 8
of the
NCA reads:
"(1) Subject to subsection
(2); an agreement constitutes a credit agreement for the purposes of
this Act if it
is
-
(b)
a credit transaction as described in subsection (4)."
Section 8(4)
of the NCA provides:
"An
agreement irrespective of its form but not including an agreement
contemplated in subsection (2), constitutes
a
credit transaction if it is-
(f)
any
other agreement, other than a credit facility or credit guarantee, in
terms of which payment of an amount owed by one person
to another is
deferred, and any charge, fee or interest is payable to the credit
provider in respect of
-
(i)
the agreement, or
(ii)
the amount that has been
deferred."
[55]
Having accepted that the agreement was a
credit agreement, it follows that the plaintiff was a credit provider
as defined in
section 1(h)
of the NCA. The section provides that a
credit provider is “
the party
who advances money or credit to another under any other credit
agreement”'.
[56]
At issue was whether the plaintiff was
obliged to register as a credit provider.
Section 40(1)
of the NCA
provides:
"
A person must apply to be registered
as
a credit provider if
-
(a)
that
person, alone or in conjunction with any associated person, is the
credit provider under at least 100 credit agreements, other
than
incidental credit agreements ;or
(b)
the
total principal debt owed to that credit provider under all
outstanding credit agreements, exceeds the threshold prescribed
in
terms of section A2(1)."
The Minister set the threshold at R500 000,00
in Government Gazette No 28893 on 1 June 2006.
[57]
It was submitted on behalf of the
plaintiff that while the total principal debt owed to him under the
outstanding credit agreement
exceeds R500 000,00, he was not obliged
to register under
section 40(1)
because he is not a person who
frequently provides credit. The transaction was a single agreement.
Further that he was not appraised
of the provisions of the NCA when
he concluded the loan agreement with the defendants.
[58]
The submission was based on the
unreported decision of a full court of this division in
Friend
v Sendal
[1]
in which Legodi J held that
section
40(1)(b)
of the NCA
"must be
seen
as
having
been directed at those who are in the credit market or industry or at
those who intend to participate in the credit market
and/or
industry'.
[59]
At paragraph [12] of his judgment in
Van
Heerden v Nolte
[2]
Murphy J said:
"While
I appreciate the paradigm of the underlying idea that it may be
socially and economically imprudent to regulate lending
to the extent
that all loans above R500 000,00 will be illegal unless the lender is
registered, the interpretation, in my respectful
opinion, is
strained. The intention and purpose of
section 40(1)
of the NCA is to
require credit providers, who make more than 100 loans or who lend
more than R500 000,00, to register. The intention
of the legislature
appears from the plain and unambiguous language of
section 40(1)(b).
In terms of that provision, it is the total amount of the principal
debt which is relevant. The reference to "all outstanding
agreements" does not evince an intention to exclude a single
agreement in excess of R500 000,00. It is linguistically permissible
to consider an amount owing under
a
single agreement as being the
principal debt owed under "all outstanding agreements". If
there is only one transaction
then it will constitute "all"
of the outstanding agreements.
Section 40(1)(a)
regulates the
position from the perspective of the number of agreements, while
section 40(1)(b)
is intended to govern the position with regard to
the total capital advanced by any credit provider."
[60]
In
Van
Heerden v Nolte
[3]
the court found that the
ratio
decidendi
in
Friend
[4]
was inconsistent with the approach
taken by the Constitutional Court in
National
Credit Regulator v Opperman and Others.
[5]
Similarly, in
Potgieter
v Olivier and Another,
[6]
although the court held that it was
bound by
Friend,
[7]
it differed with its finding on the
grounds that the tenents of interpretation of statutes do not permit
such a meaning.
[8]
[60]
The Supreme Court of Appeal in
Du
Bryn
[9]
held that the requirement to
register as a credit provider is applicable to all credit agreements
once the prescribed threshold
is reached, irrespective of whether the
credit provider is involved in the credit industry and irrespective
of whether the credit
agreement is a once-off transaction. It follows
on the basis of the decision in
Du
Bryn
[10]
that the plaintiff was obliged to
register as a credit provider.
[61]
It is common cause between the parties
that the plaintiff was not registered as a credit provider when the
credit agreement was
entered into. In terms of the NCA. the plaintiff
was 11ot supposed to offer, make available or extend credit, enter
into a credit
agreement or agree to do any of those
things.
[11]
The credit agreement entered into by the plaintiff is therefore
unlawful and void to the extent provided for in
section 89.
[12]
[62]
It therefore follows that when an
unregistered credit provider who is required to be registered, lends
money to a consumer, he or
she will have no contractual cause of
action. He will be obliged to sue the consumer under the law of
unjust enrichment, by means
of the
condictio
ob turpem vet iniustam
causa, to
recover the money.
[13]
[63]
The next point at issue is whether the
plaintiff is entitled to the alternative claim based on unjustified
enrichment.
[64 To succeed with a claim based on undue
enrichment, the following prerequisites should be met: First the
defendant must be enriched.
Secondly the plaintiff must be
impoverished. Thirdly, the enrichment of the defendant must be at the
plaintiff's expense and finally
the defendant's enrichment must be
unjustified.
[14]
[65]
It is common cause between the parties
that the money that was paid in terms of the loan agreement was never
received by the second
defendant. Although he contended that the two
defendants traded together, the plaintiff conceded that if the first
defendant did
not give the money to the second defendant, the second
defendant was not enriched. It is my view, based on the evidence,
that the
above essential requirements to be complied with before a
claim under unjustified enrichment can succeed, have not been
established
against the second defendant. It therefore follows that
the claim against the second defendant on this basis, should fail.
[66]
The evidence proves that the first
defendant received the money and utilised it. The money was never
repaid as agreed. It was also
not utilised as agreed.
[67]
It was argued on behalf of the first
defendant that the plaintiff did not prove on a balance of
probabilities that he was free of
turpitude and that his claim
against the first defendant should be dismissed. Reliance in this
regard was placed in the Constitutional
Court decision of
Chevron
SA (Pty) Ltd v Wilson t/a Wilson Transport and Others
[15]
where the following was said:
"In order to be successful, ordinarily
the party who claims on the basis of unjust enrichment must be free
of turpitude and
should show that he has not acted dishonourably. If
the Credit Provider
is
not
free of turpitude, the par delictum rule stipulates that the law
should not come to her aid."
[68]
Further submissions were that the
plaintiff conceded that he stopped the cash flow of the business
which forced the first defendant
to fund the chicken business on
their behalf. He liquidated the companies which led her to lose all
her properties were valued
more than R4 million. She was never paid a
salary as agreed between the parties and has lost about R300 000,00.
She funded the
business with more than R700 000,00. The plaintiff
caused a deadlock by not supporting the business.
[69]
The evidence of the plaintiff speaks for
itself. He testified that he had paid more than what he had agreed to
pay in terms of the
chicken agreement and that all the cash that came
into the business was not accounted for. The first defendant conceded
that the
plaintiff had paid the amount of R2,3m which was agreed upon
when he stopped the cash flow of the chicken business. The plaintiff
denied the first defendant's evidence that she did not receive her
salary which had been agreed upon because there was no money.
According to him, the money that he had paid into the business was to
cater for all that and the business was a running business
which
reduced cash all the time. He always suspected that the chicken
business was not run properly. He never checked the bank
statements
of the business to ascertain if it was properly run because he was
not allowed to do so. I have analysed the evidence
of the first
defendant about how she funded the chicken business above and I do
not intend to repeat it here. I therefore do not
agree that based on
the above concessions of the plaintiff, it can be concluded that the
plaintiff did not prove on a balance of
probabilities that he was
free of turpitude.
[70]
In my view the first defendant was
enriched in that she had received the money. The money had not been
utilised as agreed. She used
it to pay for her other business
entities which had nothing to do with the purpose of the loan
agreement and the plaintiff. The
plaintiff was impoverished in that
the money was never repaid to him and the first defendant was
unjustifiably enriched.
[71] I could not
find any evidence that there was some form of turpitude or
dishonourable conduct
on the part of the plaintiff when he did
business with the first defendant. It is my view that the plaintiff
was free of turpitude
and he has shown that he has not acted
dishonourably. It therefore follows that the plaintiff’s
alternative claim based on
unjustified enrichment must succeed.
[72] Consequently
I grant judgment against the first defendant for:
1.
Payment
of the capital amount of R546 000,00;
2.
Interest
on the aforesaid amount calculated at the applicable
mora
interest rate, which interests shall
commence running from 5 May 2009 until date of payment;
3.
Costs
of suit;
4.
The
claim against the second defendant is dismissed with costs.
M J TEFFO
JUDGE OF THE HIGH COURT
GAUTENG DIVISION, PRETORIA
[1]
2015 (1) SA 395 (GP)
[2]
2014 (4) SA 584 (GP)
[3]
Supra
para
[14]
[4]
Supra
[5]
2013 (2) SA 1 (CC)
[6]
2016 (1) SA 272
GP paras [28] and [30H33]
[7]
Supra
[8]
See also
Naude and Another v Wright
[2017] ZAGPPHC 646 para
[26] where the court held that it was bound by
Friend.
[9]
(929/2017) [2018] ZASCA 143
[10]
Supra
[11]
Section 40
of the NCA
[12]
Sections 40(4)
,
89
(2)(d), ae(5)(d) of the NCA
[13]
Van Heerden v Nolte supra
[14]
Jacques Du Plessis,
The South African Law of Unjustified
Enrichment
(2012) page 24 at para 2.1. See LAWSA, vol 9 at para
76 by Lotz revised by Horak and also
Bowman De Wet Du Plessis NNO
and Others v Fidelity Bank Ltd
1997 (2) SA 35
(A) at 43D-F
[15]
2015(10) BCLR 1158
(CC)
(5 June 2015)