About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Free State High Court, Bloemfontein
SAFLII
>>
Databases
>>
South Africa: Free State High Court, Bloemfontein
>>
2019
>>
[2019] ZAFSHC 84
|
|
Wilke N.O and Others v Griekwaland Wes Korporatief Ltd (592/2019) [2019] ZAFSHC 84 (20 June 2019)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Reportable:
NO
Of
Interest to other Judges: NO
Circulate
to Magistrates:
NO
Case number:
592/2019
In
the matter between:
CHARL
DANIEL WILKE N.O.
1
st
Applicant
THERESA
WILKE N.O.
2
nd
Applicant
T
ROOS INDEPENDENT TRUSTEE (EDMS) BPK
3
rd
Applicant
(Registration
no: 2017/119408/07)
and
GRIEKWALAND WES
KORPORATIEF LTD
Respondent
CORAM:
DAFFUE, J
HEARD
ON:
13 JUNE 2019
JUDGMENT
BY:
DAFFUE, J
DELIVERED
ON:
20
JUNE 2019
I
INTRODUCTION
[1]
The trustees of a trust seek cancellation of a surety bond they have
passed in favour of a creditor
during 2003, sixteen years ago.
The crisp point to be decided is whether the creditor may be
compelled to relinquish its
contractually acquired right to hold on
to its security. The trustees aver that the claim against the
principal debtors for
whom they stood security was finally dismissed
and became
“
done
and dusted”
;
therefore the creditor may not have the proverbial second bite at the
cherry as the creditor seeks to achieve. If this sounds
a bit
confusing, the relevant facts will provide more clarity. Legal
principles such as election,
res
iudicata
,
issue estoppel, the effects of deregistration of a company and the
subsequent reinstatement of its registration shall be addressed.
II
THE PARTIES
[2]
The three trustees of the Wilke Boerdery Trust, IT 1304/1995 (“the
Trust”), cited as the
applicants are Mr Charel Daniël and
Mrs Theresa Wilke and an independent trustee. I shall herein
later refer to them
as the applicants and to Mr Wilke as “Wilke.”
Adv S Grobler appeared for the Trust in this application and also
for
Wilke and Karob Boerdery (Pty) Ltd (“Karob”) in case no
4573/2009 herein later referred to as “the 2009 action.”
[3]
Griekwaland Wes Korporatief Ltd (“GWK”) is the respondent
in this application, it having instituted
the 2009 action against
Wilke and Karob. Adv KW Lüderitz SC, assisted by Adv P
Lourens, appeared for GWK.
III
THE
RELIEF CLAIMED
[4]
The Trust seeks an order in terms whereof GWK be ordered to take the
required steps to cause the cancellation
of Surety Bond B6027/2003
registered over the Trust’s immovable properties, Portion 3 (of
1) of the farm Mayville 236, district
Jacobsdal and perseel 190 Riet
River Settlement East, district Jacobsdal and that GWK be ordered to
pay the costs of the application
on an attorney and client scale.
[5] It
should be placed on record for convenience of the reader hereof that
the
raison
d’etre
for
the relief claimed is the Trust’s reliance on the judgment of
Kruger, J in the 2009 action which was not only upheld by
the full
bench of this division, but the Supreme Court of Appeal ultimately
dismissed GWK’s petition for leave to appeal.
Kruger, J
dismissed GWK‘s action, relying on an acknowledgment of debt
(“AoD”), in which it claimed an amount
of nearly R13m
from Wilke and Karob. More will be said about the judgment
later. Wilke, deposing to the founding affidavit
in support of
the Trust’s application, avers in paragraph 9.1 thereof that
“
GWK
has exhausted all legal remedies at its disposal to claim money it
alleged Karob and I owed it.”
IV
FACTUAL MATRIX
[5] In
order to make sense of the defences raised by GWK, it needs to be
pointed out that numerous aspects mentioned
herein are either common
cause, or can be accepted as correct based on the
Plascon Evans
principles. Wilke, Karob (that is Karob Boerdery (Pty) Ltd,
previously known as CD Wilke Boerdery (Pty) Ltd) and Henque 4335
CC
(“Henque”) entered into various credit agreements with
GWK. No doubt, Wilke and his group of entities
found
themselves in a financial predicament to such an extent that they
could not serve the various credit agreements.
[6]
During March 2005 Wilke, Karob and Henque applied to GWK to have the
debts owing by them to be consolidated
into one single account in the
name of Wilke (later Karob). GWK approved the request on the
express condition that all the
securities granted by Wilke, the Trust
and Henque would remain in place in securitisation of the amounts to
be assumed by Wilke
(later Karob). These sureties agreed to
such conditions. The debt was consolidated and instalments were
rescheduled.
On 26 January 2006 Wilke signed the AoD on behalf
of Karob and also bound himself in his personal capacity as surety
and co-principal
debtor in favour of GWK. It was admitted that
Karob owed R12 787 871.82 at the time, the arrears being
R4 831 871.05.
Settlement of the arrears in
instalments was agreed upon and an acceleration clause provided that
in the event of default, the
full outstanding amount would become due
and payable at once. Henque’s portion of the debt assumed
by Karob pursuant
to the debt consolidation amounted to
R4 226 302.45.
[7]
The only relevance of the debt consolidation is to ascertain which
debts are the subject matters of such
consolidation. As
mentioned, the Trust’s liability relates to the debt stipulated
in the Surety Bond more fully dealt
with later. In terms thereof the
Trust bound itself as surety for the indebtedness of Wilke and
Henque, jointly and severally,
towards GWK in the amount of R5m.
The AoD is not a novation of the original debts and/or underlying
credit agreements and
GWK expressly retained the right to sue the
respective debtors based on the original and underlying credit
agreements. The
Trust was not a party to the AoD.
[8]
When the debtor failed to comply with its undertakings in terms of
the AoD, GWK instituted a provisional
sentence summons – the
2009 action – against Karob and Wilke (as surety).
Provisional sentence was granted for
a certain amount. The
matter went on trial whereupon Kruger, J dismissed the action.
[9]
Kruger, J found in paragraphs [21] and [22] of his judgment, after
evidence was led in the trial and upon
interpretation of the AoD,
that the parties intended to deal with the arrears only.
Therefore the learned judge held:
“
Na
betaling of nie-betaling van die agterstalliges was eiser geregtig om
die volle uitstaande bedrae, met verwysing na die onderliggende
kontrakte waarna in klousule 11 en in die eiser se aanmaningsbrief
van 7 Maart 2007 verwys word, te vorder.”
The
court therefore accepted that insofar as the AoD dealt in essence
with payment of the arrears, GWK would be fully entitled to
proceed
against the debtors based on the original and underlying credit
agreements to claim what was due in terms thereof.
[10] The full
bench dismissed GWK’s appeal, but remarked that absolution from
the instance would probably be
the correct order. On 10
January 2017 GWK’s petition to the Supreme Court of Appeal for
special leave to appeal was
dismissed with costs.
[11] Mr
Grobler argued that insofar as legal issues are to be adjudicated,
the Trust cannot be penalised for not dealing
fully with the facts
raised by GWK. I do not agree. GWK put the relevant
factual matrix before the court which it is
bound to accept based on
the
Plascon
Evans
principles, unless it is so far-fetched and untenable and/or false
that it could be rejected on the papers. None of GWK’s
allegations fall in any of these categories. The application
shall be adjudicated on the facts stated by GWK together with
the
admitted version of the Trust.
V
THE SURETY BOND
[12] The
Surety Bond B 6027/2003 was registered by the Trust in favour of GWK
as suretyship for the debts of Wilke and
Henque in the total amount
of R5m in respect of
“
gelde
geleen en voorgeskiet en/of produksiekrediet verleen en/of goedere
verkoop en gelewer uit hoofde van ’n skriftelike
leningsooreenkoms.”
I
emphasise that the suretyship relates to a specific credit
agreement. It is not the customary suretyship where the surety
binds him/her for all amounts due by the principal debtor as well as
amounts that may fall due in future. It is also emphasised
that
the Surety Bond expressly stipulates that the trustees bound the
Trust as surety and co-principal debtor.
[13] I, being well
aware of the limited nature of the Trust’s suretyship as
contained in the Surety Bond and its claim
for cancellation of the
Surety Bond, requested Mr Grobler at the onset to explain whether the
Trust would seek to rely on the fact
that the particular debt might
not have been included in the consolidated debt. My concern
was, notwithstanding the averments
in
inter
alia
paragraphs 17, 18, 19, 24.9 and 29 of the answering affidavit, it did
not appear clearly from this affidavit that the debt arising
from the
particular credit agreement also formed part of the consolidated
debt. It is apparent that Henque’s debt in
excess of R4m,
as assumed by Karob, formed part of the total debt of nearly R13m for
which the provisional sentence summons was
issued. Mr
Grobler in no uncertain terms submitted that it was not his client’s
case that the debt secured by
the Surety Bond was not part and parcel
of the consolidated debt. Mr Grobler’s submission is in
line with the pleaded
version of the Trust. Consequently, it is
not necessary to deal with this issue any further for purposes of
adjudication
of this application.
VI
THE DEFENCES
[14] GWK’s
defences to the Trust’s application can be summarised as
follows:
(1)
The Trust was not a party to the 2009 action;
(2)
GWK relied exclusively on the AoD to sustain its cause of action (and
clearly not on the numerous underlying
credit agreements);
(3)
the balance of the Henque debt in the amount of R4 226 302.45
for which the Trust stood surety
as will become clear later, form
part of the AoD debt;
(4)
the AoD is not a novation of GWK’s original claim against Karob
and GWK would be entitled to institute
action either in terms of the
AoD, or the original cause of action;
(5)
the outcome of the 2009 action is not finally dispositive of GWK’s
rights to claim payment from Wilke
and the Trust (as well as Karob,
once its registration as a company has been reinstated) in terms of
the principal or underlying
credit agreements;
(6)
the claims against Wilke and the Trust (based on special notarial
bonds in respect of Wilke) and the Surety
Bond (in respect of the
Trust) attract a thirty year prescription period
[1]
;
(7)
GWK’s claims against Wilke and the Trust
“
are
alive today as they were from inception.”
VII
ELECTION,
RES
IUDICATA
,
ISSUE ESTOPPEL AND THE “ONCE AND FOR ALL RULE”
[15] Mr Grobler
made submissions in an effort to convince the court that GWK would be
non-suited in a claim against the Trust
based on any one or all of
the above principles. He based his arguments predominantly on
the so-called extended
res
iudicata
.
Therefore, so he argued, the Surety Bond should not be allowed to
remain registered against the Trust’s immovable
properties as
GWK’s security has lapsed. Consequently, the application
should be granted.
[16] The first
issue that requires attention is the submission that GWK has elected
to issue summons based on the AoD and
the submission that it cannot
now, after being unsuccessful, revert to the underlying credit
agreements and issue fresh summonses
based on these agreements.
The AoD stipulates, loosely translated, that in the event of default
in complying with the AoD,
the creditor would be entitled in its
exclusive discretion to institute litigation in terms of the AoD or
the original cause of
debt. It reads as follows in Afrikaans:
“…
.
sal die skuldeiser geregtig wees om in sy uitsluitlike diskresie
geregtelike stappe in te stel kragtens die skuldbewys of die
oorspronklike skuldoorsaak.”
The
doctrine of election is well-known, but I am afraid that Mr Grobler
failed to convince me that it applies
in
casu.
Mr
Grobler submitted that GWK issued summons against Wilke and Karob,
not for arrears only, but for the entire alleged indebtedness;
however it failed in three courts. I indicated above on what
basis Kruger, J held against GWK.
[17] Mr Grobler’s
reliance on
Montesse
[2]
is
misplaced. There is no sign that GWK in pursuing action based
on the AoD abandoned its other remedies. Clearly, this
is not
an issue where GWK had a choice between two inconsistent remedies and
unequivocally committed itself to one. An example
that comes to
mind is a party claiming cancellation of the contract and damages,
instead of enforcement of the contract.
GWK’s election to
claim payment based on the AoD is surely not a remedy inconsistent
with claims for payment of indebtedness
based on various underlying
credit agreements. GWK’s election to rely on the AoD is
understood. It probably believed
that it would not be necessary
to rely on several credit agreements and to prove numerous sales in
respect of each of them which
would have been time consuming and an
onerous task. Mr Grobler conceded that neither Karob, nor Wilke
“
could
have complained had GWK chosen to sue on strength of the original 40
odd credit agreements.”
He
also conceded, on a proposition put to him by the court, that in the
event of unsuccessful action having been instituted by GWK
on the
AoD, for example in that Wilke did not have authority to enter into
the AoD or it being found to be null and void based
on fraud or
misrepresentation, GWK would be entitled to still rely on the
underlying agreements to claim payment.
[18] The next
issue is the reliance on
res
iudicata
.
Mr Grobler argued that GWK’s claim was dismissed. It was
not a matter of absolution from the instance in which
case the
exceptio
rei iudicatae
could
not be raised successfully. Even accepting that Karob might and
would be reinstated with retrospective effect, I am
of the view that
GWK’s claims against Wilke and Karob have not been finally
adjudicated. The Supreme Court of Appeal
recently considered
the defences of
res
iudicata
and issue estoppel.
[3]
The principles pertaining to
res
iudicata
are trite. The dispute must have been finally adjudicated in
proceedings between (1) the same parties for (2) the same relief
on
the (3) same ground or same cause of action. Neither the
Trust, nor Henque was a party to the proceedings in the
2009 action,
obviously no cause of action was pleaded against them and no relief
was sought from them. Therefore,
cadit
quaestio
.
[19] Issue
estoppel is a consequence of a relaxation of the common law defence
of
res
iudicata
.
At least the same parties must have been involved and the same issue
must have arisen earlier for successful reliance on
issue
estoppel.
[4]
Again, it is
repeated that neither the Trust, nor Henque was cited as a party in
the 2009 action. Also, the AoD as
acknowledgement of debt was
capable of sustaining an independent cause of action and in
particular independent from the principal
and underlying credit
agreements.
[20] Mr Grobler
submitted, relying on
Janse
van Rensburg
[5]
,
“
it
amounts to an abuse if the same subject matter is advanced in a
second or subsequent case under a different cause of action when
the
initial chosen cause of action and claim had failed.”
He based his submission
on what he called an extension of the issue estoppel principle.
He failed to refer the court to any
specific paragraph of the
judgment in his heads of argument and could also not inform me during
his oral address on what passages
or
dicta
he relied. I allowed him an opportunity to point out the
relevant paragraphs relied upon in reply. Eventually he merely
referred the court to paragraph [23] in which the court quoted with
approval the
dictum
of Olivier, JA in
National
Sorghum Breweries
[6]
.
Janse
van Rensburg
does not support the Trust’s case at all. The SCA
considered the principles of
res
iudicata
and issue estoppel
[7]
as well as
the claim instituted by the liquidators. It is not necessary to
deal with the applicable facts and the law in
that matter, save to
mention that the liquidators’ appeal succeeded in terms whereof
it was declared that they were entitled
to institute a claim in terms
of
s 29
of the
Insolvency Act, 24 of 1936
, notwithstanding an earlier
judgment of the SCA under case number 522/2003 in terms whereof they
unsuccessfully relied on
s 30
of the same Act.
[8]
Heher, JA, writing for a unanimous court, stated that the respondents
could not be successful
[9]
“
because
a plea of res iudicata (whether in its classical or extended form)
cannot succeed unless it nullifies the legal force of
the cause of
action (put otherwise, it cannot be raised successfully if it leaves
the plaintiff with a viable cause of action).”
[21] The “once
and for all rule” prevents a party to embark on piecemeal
litigation. All claims flowing
from the same cause of action,
or put differently, all claims which are wholly dependable on the
same cause of action, must be
claimed once and for all in one
action. This is trite.
[10]
There is no basis upon which GWK’s intended action against the
Trust can be successfully objected on the basis of the
“once
and for all rule.” In this regard Heher, JA dealt with a
similar defence in
Janse
van Rensburg
[11]
and having found that the respective sections of the
Insolvency Act
do
not create the same cause of action, even in the extended sense,
the learned judge of appeal held that the “once and for all
rule” could not be applied.
[22] In conclusion
on the four issues raised and dealt with above, no valid submissions
have been raised to assist the Trust
in its endeavour to have the
Surety Bond cancelled.
VIII
KAROB’S
DEREGISTRATION
[23] Karob was
deregistered on 16 July 2010. This was after institution of the
2009 action, but long before the matter
was heard and the judgment by
Kruger, J which was delivered on 13 August 2015. Karob has yet
to be reinstated as a company
in terms of s 82(4) of the Companies
Act.
[12]
[24] The
existence of a company terminates upon deregistration and it
“
brings
an end to its corporate personality ‘in the same way that a
natural person ceases to exist at death.’”
[13]
This
dictum
,
as Brand, JA held later in the judgment
[14]
is not entirely correct. Brand, JA continued in paragraph [15]
of
Newlands
Surgical Clinic
to
state that all actions purportedly taken on behalf of the
deregistered company after deregistration were void and of no
consequence.
This included the arbitration proceedings,
associated court proceedings and the orders granted against the
deregistered company.
The reinstatement of Karob as a company
in terms of s 82(4) with retrospective effect from date of
deregistration, which may include
the retrospective validation of all
corporate activities, may well be ordered in future on application by
an interested person.
[15]
This aspect does not have to be considered for purposes of the
adjudication of this application.
[25] I agree with
Mr Lüderitz that, as a consequence of Karob’s
deregistration, the proceedings before Kruger,
J, his dismissal of
GWK’s claim and the outcome of the subsequent appeal are null
and void as against Karob. He also
argued that these judgments
do not divest GWK of its claims against Karob, either premised on the
AoD or the underlying credit
agreements. In my view it is not
necessary to adjudicate the application having to rely on nullity and
voidness of the aforesaid
proceedings and orders. It is still
possible for Karob’s registration to be reinstated with
retrospective effect.
Having said this, deregistration or
“death” of Karob does not prevent GWK as creditor to
proceed with action against
the Trust as surety.
[16]
It is not the law that a surety is released from liability to the
creditor when the principal debtor ceases to exist.
Mr Grobler
conceded this. The inescapable conclusion is that the accessory
liability of the Trust as surety pursuant to the
Surety Bond
remains. I agree with Mr Lüderitz that GWK cannot be
compelled to relinquish contractually acquired rights
against its
will, given the material factual matrix.
IX
CONCLUSIONS
[26] In
conclusion, I am satisfied that the Trust remains bound as surety
towards GWK. Whether or not Karob’s
registration as a
company will be restored is immaterial to the liability of the Trust
as surety. In any event, it bound
itself as surety for Wilke
and Henque’s indebtedness towards GWK as is apparent from the
Surety Bond. GWK has certainly
not exhausted all its remedies
to claim money owing to it by Wilke, Karob, Henque and the Trust.
[27] Finally,
I considered an appropriate costs order. The general rule is
that costs follow the event.
Prior to the launch of the
application GWK threatened the Trust with a punitive costs order if
it dared taking steps as anticipated.
Mr Lüderitz
submitted, relying on Lamprecht,
[17]
a punitive costs order should be granted insofar as the Trust acted
in a reprehensible manner, well-knowing before institution
of the
present application what were GWK’s defences. I do not
agree. GWK could have issued action against the
Trust several
years ago. Notwithstanding its losses in three different
courts, it failed to act positively against the Trust,
merely relying
on the prescription period of thirty years. In my view the
Trust cannot be blamed for resolving to launch
the present
application in the hope to obtain finality in respect of GWK’s
security. Eventually Mr Lüderitz asked
for costs to
include the costs of two counsel. I am satisfied that the
nature of the legal principles involved and the importance
of the
outcome of the case to the parties, especially GWK, justify the fees
of two counsel.
X
ORDER
[28]
Consequently the following order is made:
The application is
dismissed with costs, such costs to include the costs consequent upon
the employment of senior and junior counsel.
J P DAFFUE, J
On
behalf of Applicants :
Adv S Grobler
Instructed
by
: McIntyre & van der Post
BLOEMFONTEIN
On
behalf of Respondent :
Advv KW Lüderitz SC & P Lourens
Instructed
by
: Symington & De Kok
BLOEMFONTEIN
[1]
Section 11(a)(i)
of the
Prescription Act, 68 of
1969
and Factaprops v the Land Bank (353/2016)
[2017] ZASCA 45
(30
March 2017) at paras [20] – [22].
[2]
Montesse Township and Investment Corporation
(Pty) Ltd & another v Gouws NO & another
1965 (4) SA 373
(A)
at 380H – 381A.
[3]
Transalloys v Mineral-Loy (781/2016)
2017 ZASCA
95
(15 June 2017) at para [10]. See also majority
judgment in National Sorghum Breweries (Pty) Ltd v International
Liquor
Distributors (Pty) Ltd
[2000] ZASCA 159
;
2001 (2) SA 232
(SCA) at paras [2] –
[5].
[4]
Smith v Porritt & others
2008 (6) SA 303
(SCA) para [10], referred to with approval in Transalloys (previous
footnote).
[5]
Janse van Rensburg NO & others v Steenkamp &
another; Janse van Rensburg & others v Myburgh &
others
[2009] 1 All SA 53
9 (SCA) at para [23].
[6]
Ibid.
[7]
From para [19] and further.
[8]
Notice of motion quoted in
para [6] and the
orders in para [38].
[9]
At para [26].
[10]
See also the discussion in National Sorghum
Breweries op cit at paras [6] – [10].
[11]
At para [27].
[12]
71 of 2008.
[13]
Newlands Surgical Clinic (Pty) Ltd v Peninsula
Eye Clinic (Pty) Ltd
2015 (4) SA 34
(SCA) at para [15], quoting with
approval from Miller & others v Nafcoc Investment Holding Co Ltd
& others
2010 (6) SA 390
(SCA) at para [11].
[14]
Ibid at para [26]. Unlike a natural person
who has passed away, a deregistered company may carry on with
business activities
after deregistration to the detriment of third
parties.
[15]
Newlands Surgical Clinic op cit at paras [30] &
[31].
[16]
Traub v Barclays National Bank; Kalk v Barclays National Bank
1983 (3) SA 619
(A) at pp 633/4
.
[17]
Lamprecht v Klipeiland (Pty) Ltd (753/2013)
[2014] ZASCA 125
(19 September 2014) at para [19].