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[2018] ZAFSHC 102
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Garagesure Consultants and Acceptances (Pty) Ltd v Shamah Filling Station t/a Total Oranjesig and Another (4129/2016) [2018] ZAFSHC 102 (19 June 2018)
IN
THE HIGH COURT OF SOUTH AFRICA
FREE
STATE DIVISION, BLOEMFONTEIN
Case
No.: 4
129/2016
In
the matter between:
GARAGESURE
CONSULTANTS AND
ACCEPTANCESS
(PTY)
LTD
Plaintiff
and
SHAMAH
FILLING STATION t/a TOTAL ORANJESIG
1
st
Defendant
CAROL
BALINDIWE
MOTAKE
2
nd
Defendant
HEARD
ON:
13 & 14 MARCH 2018
JUDGMENT
BY:
MATHEBULA, J
DELIVERED
ON:
19
JUNE 2018
[1]
The plaintiff, Garagesure Consultants and Acceptances (Pty) Ltd, a
company registered in accordance with the company laws of
the
Republic, instituted an action against the defendants, Shamah Filling
Station trading as Total Oranjesig and Carol Balindiwe
Motake,
claiming payment of an amount of R500 000.00 owing in terms of a
written suretyship agreement.
[2]
The parties agreed at a Rule 37(4) proceedings that the adjudication
of the merits and quantum be dealt with simultaneously.
[3]
The plaintiff called one witness and the defendants closed their case
without leading oral evidence. Leslie Francis Mitchell
testified that he is the Managing Director of the plaintiff and in
his scope of employment he has full knowledge of contracts entered
into with service providers as well as other business associates.
[4]
He explained how an application for a fuel guarantee is normally
concluded. The retailer/dealer will normally approach
the
plaintiff requesting that a guarantee facility be made on their
behalf to the Oil Company. Once the application has been
approved, a guarantee will be issued to the Oil Company on behalf of
the retailer/dealer. He referred to a document titled
“Fuel
Insurance Policy” attached to a bundle named Supplementary
Index to Pleadings on page 10 to 17 as the written
agreement between
the parties. The document forms the basis of the agreement
between the plaintiff and in this case Total
South Africa as the Oil
Company that was doing business with the defendants.
[5] On the issue as to
how the claim is dealt with, he explained that the dealer will
receive fuel from Total South Africa.
In the event of
non-payment by the dealer, payment will be demanded from the dealer
by Total South Africa. If the payment
is not made then the
guarantee will be called in by the latter from the plaintiff.
[6]
He spent some time dealing with the application forms specifically
the requirements for the application to be processed and
in
particular surety to be signed by the operator of the dealership.
Once these requirements have been met then the plaintiff
issues a
guarantee. He pointed out that the plaintiff’s name is
stated on page 15 because they are the agents of Compass
Insurance
and they are the entity issuing the guarantee, collecting the
premiums, paying the claims and finally do the recoveries.
[7]
He testified that the surety documents were completed by the second
defendant. The second defendant acknowledged the terms
and
conditions of the agreement as well as providing the necessary
information. She furnished the bank account number from
which
the premiums should be deducted.
[8]
The value of the guarantee is determined by the Oil Company and the
dealer. The plaintiff is appointed as the underwriting
manager
acting under mandate from the insurance company namely Compass
Insurance. It is on this basis that a guarantee was
issued by
the plaintiff in favour of Total South Africa on 13 December 2012 as
recorded on page 20 of the Supplementary Index to
Pleadings.
[9]
It appears that the parties entered into a Suretyship Agreement
signed on the same date the guarantee was issued. The
document
is attached to the same bundle from page 21 to 24. The purpose
of the suretyship agreement was that it will come
into play in the
event of the default by the first defendant. The second
defendant agreed to pay the plaintiff the amount
due that has been
paid to the Oil Company.
[10]
In terms of clause 3.1 and 3.3 the second defendant bound herself to
the plaintiff in the event of a default. The parties
also
agreed that the plaintiff under mandate will institute a recovery of
the debt due. The relevant clauses read as follows:-
“
3.1
The Operator hereby binds himself as surety and co-principle debtor
with the Dealership in favour of
Garagesure for the due and punctual
fulfilment and performance by the Dealership of all its obligations
arising out of or in connection
with the Guarantee, including,
without limitation, all variations of the Guarantee entered into in
the future.”
and
“
3.3
The suretyship shall only terminate once the Dealership has fulfilled
all of its obligations in terms
of the Guarantee and there are no
amounts of any nature whatsoever owing or due by the Dealership to
the Supplier in terms of the
Guarantee.”
[11]
The plaintiff did receive a letter of demand from Total South Africa
and duly settled the claim. Payment was made on
the strength of
certificate of balance as well as documentation showing when numerous
deliveries of products were made to the defendants.
The payment
was effected from the account of Compass Insurance where the
plaintiff had a mandate to pay the claims and receive
the recoveries.
[12]
According to him the defendants could have obtained security from any
financier. Perhaps they were the easy option because
they did
not require any collateral. The Schedule of Insurance was
concluded between the parties as stated on page 41 of
the Index of
Documents bundle.
[13]
Under cross-examination he confirmed that the plaintiff was mandated
by Compass Insurance to do certain things and that the
plaintiff was
an underwriting agent. Further in the event of success in this
litigation, money will be paid to the bank account
of Compass
Insurance to which they have rights.
[14]
In terms of the suretyship agreement the second defendant bound
herself to pay in the event of the failure to pay by the first
defendant. He denied that the first defendant was a primary
debtor and a surety at the same time. According to him
the
plaintiff was entitled to claim payment from the defendants in the
event of failure by the latter to make payment to the Oil
Company.
[15]
At the conclusion of his oral evidence, the case for the plaintiff
was closed. Counsel for the defendants applied for
absolution
from the instance. The parties agreed to submit the Heads of
Argument and that the matter should be decided on
the papers without
oral argument. The application was refused and I now turn to
deal with this aspect.
[16]
The correct approach to an application for absolution at the end of
the plaintiff’s case was succinctly stated in
Claude
Neon Lights (SA) Ltd v Daniel.
Milner
AJA said:-
''It is so that the
question that I now turn,
bearing
in mind that, when absolution from the instance is sought at the
close of plaintiff's case, the test to be applied is not
whether the
evidence led by plaintiff establishes what would finally be required
to be established, but whether there is evidence
upon which a Court,
applying its mind reasonably to such evidence, could or might (not
should, nor ought to) find for the plaintiff.”
[1]
(Footnote
omitted).
This
approach has been confirmed and applied consistently by the courts
throughout the country.
[2]
[17]
In order to survive a application of this nature, the plaintiff has
to make out a
prima
facie
case. There must be evidence relating to all elements of the
claim. Importantly without such evidence the court will
not
find for the plaintiff. In applying this test the court should
not be concerned with what someone else might think but
with its own
judgement and not that of another “reasonable” person or
court.
[18]
In this matter the second defendant operated a filing station with
Total South Africa as the fuel supplier. It would
appear that
before the latter could supply fuel products to both the first and
second defendant, there had to be a fuel guarantee
in place.
The first defendant applied for such a guarantee from the plaintiff
which was duly issued and premiums paid for
from their coffers.
In addition and in the course of doing business with each other, the
second defendant signed a Suretyship
Agreement binding herself as
surety and co-principal debtor with the first defendant. This
is common cause from the parties
and it is not a point of contention
as it is clearly admitted in the pleadings.
[19]
According to the second defendant the issuing of the guarantee was
not a condition before Total South Africa could supply then
with fuel
products. Further denies any breach of the agreement between
the latter and themselves. In fact it is pleaded
that it is
Total South Africa that breached the agreement although the details
of the breach are not sufficiently stated in the
plea. However
this matter does not turn on this peripheral issues.
[20]
The uncontested evidence is that Total South Africa delivered fuel
products to the defendants in the amount of R2 193 176.36
as at 2 September 2014. The Debtor’s Account and
Certificate of Balance dated 31 August 2014 are part of the record.
Total South Africa issued a letter of demand addressed to the second
defendant demanding payment of the aforesaid amount.
The first
and/or second defendant did not comply.
[21]
Further, on 29 September 2014 Total South Africa demanded payment of
R500 000.00 from the plaintiff in terms of the signed
guarantee
which payment was made on 29 September 2014. This was made on
the basis of the certificate of balance and debtors
reconciliation
account from Total South Africa. The issue of payment is denied
by the defendants and there is overwhelming
evidence that indeed it
was made.
[22]
The alternative argument is that if payment was made, such was made
on the basis of the terms and conditions prevailing between
the
plaintiff’s principal and Total South Africa. It is
unclear what those terms are as alleged by the defendants.
The
relevant parts of the contractual relationship between the plaintiff
and the defendants are clauses 3.1 and 3.3 referred to
in paragraph
10.
[23]
This agreement is not disputed at all. In terms of the surety
agreement it states that any damages or other compensation
to which
the plaintiff may be entitled out of the Guarantee, then the surety
agreement will be applicable. This is clear
that it was the
intention of the parties as at all relevant thus they dealt with each
other. On this basis I concluded that
a
prima
facie
case been made out requiring the defendant to rebut the evidence of
the plaintiff.
[24]
As mentioned in the preceding paragraphs no evidence in rebuttal was
led. The parties filed supplementary heads of argument
and I am
indebted to them for the assistance.
[25]
I have already made a finding that a
prima
facie
case has been made out by the plaintiff with all the elements to
sustain a claim in this regard. In the circumstances, there
has
been no rebuttal and as such the plaintiff has conclusively proved
his case and discharged the necessary onus of proof.
[3]
It was contended that the plaintiff does not have
locus
standi
in this matter. The parties to the Surety Agreement are clearly
identified with rights and duties
vis-a-vis
each other. As a result there can be no talk of lack of
locus
standi
and this argument cannot be upheld.
[26]
As far as the costs are concerned, the successful party must be
awarded the costs. I see no reason to deviate from the
principle.
[27]
Accordingly
the following order is made:-
27.1
Judgement is granted in favour of the plaintiff against the
defendants, the one paying the other to be absolved
in the sum of
R500 000.00 plus interest at the rate of 10% per annum
calculated from 2 October 2014 to date of final payment.
27.2
The defendants are ordered to pay the plaintiff’s costs.
___________________
M. A. MATHEBULA, J
On
behalf of the Plaintiff:
Adv. D de
Kock
Instructed
by:
Webbers Attorneys
BLOEMFONTEIN
On
behalf of the Defendant :
Adv. S Grobler
Instructed
by:
Honey Attorneys
BLOEMFONTEIN
/roosthuizen
[1]
1976 (4) SA 403
(A)
at 409
G-H
[2]
Gordon Lloyd Page & Associates v Rivera and another
2001 (1)
SA 88
(SCA) at 92 E – 93 A; De Klerk v Absa Bank Ltd and
others
2003 (4) SA 315
(SCA) at 323 C-G.
[3]
Ex parte The Minister of Justice; In re Rex v Jacobson –
Levy
1931 AD 466
at 479