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[2018] ZAFSHC 197
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Nedbank Limited v CBR Engineering CC and Others (A56/18) [2018] ZAFSHC 197 (6 December 2018)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case
number: A56/18
In
the matter between:
NEDBANK
LIMITED
Appellant
and
CBR ENGINEERING
CC
1
st
Respondent
C.A MINNIE
SNR
2
nd
Respondent
C.A MINNIE
JNR
3
rd
Respondent
HESTER CORNELIA
HENDRIKA SLABERT
4
th
Respondent
MINIROCK
CC
5
th
Respondent
VIRARNIE
CC
6
th
Respondent
CORAM:
MBHELE, J
et
MHLAMBI, J
et
DANISO, AJ
JUDGMENT BY:
MHLAMBI, J
HEARD ON:
26 NOVEMBER 2018
DELIVERED
ON:
06 DECEMBER 2018
[1]
This an appeal against the whole judgment of Pike, AJ handed down on
20 December 2017. It is the appellant’s contention
that the
court a quo erred in:
1.1 Finding that the
defendants to pay interest on the remainder of their liability to
plaintiff only as from 15 June 2016 to date
of payment at a rate of
10.25 % per annum;
1.2 Not finding that the
interest on the defendants’ liability should have run since
date of service of summons in 2013;
1.3 In ordering the
defendants, jointly and severally, the one paying, the others to be
absolved, to pay the plaintiff’s costs
only from 15 June 2016
to date of the payment of the outstanding balance;
1.4 Not finding that the
defendants were liable for the entire costs of the plaintiff’s
action;
1.5 Not finding that the
enrichment took place on the day that that the money was granted to
the defendants on 06 January 2012;
1.6 Not finding that
plaintiff’s claim was a liquidated debt but found the claim to
be unliquidated;
1.7 In applying
section
2A
of the
Prescribed Rate of Interest Act, 55 of 1975
, instead of
applying
section 1
of the said Act to the matter at hand;
1.8 In its interpretation
and application of the case law cited in
Kudu
Granite Operation (Pty) Ltd v Caterna Ltd
[1]
;
1.9 In finding that the
initial liquidated claim became an unliquidated claim once the
particulars of claim were amended to include
a claim for enrichment;
1.10 In finding that the
interest on the debt could only run as from the date of the amendment
of the particulars of claim, even
where
section 2A
of the Act is
applicable.
Background
[2]
The court
a quo
was called upon to decide, as a stated case in
terms of Uniform Rule of court 33 (1) and (2), when interest began to
run on an enrichment
claim against the respondents.
[3]
In the court a quo the appellant was the plaintiff and the
respondents were defendants. The plaintiff had instituted summons
against the defendants during October 2013 based on a written loan
agreement signed on 06 January 2012 in terms whereof the
plaintiff loaned an amount of R 3 235 000 to the
defendants. The defendants fell into arrears in respect of the loan.
The defendants defended the matter and pleaded that no contract came
into being. The matter was set down for hearing on 08, 09
and 11
March 2016.
[4]
On the first day of the trial the plaintiff informed the defendants
that it intended to amend its particulars of claim and as
a result
the matter was postponed
sine die.
The plaintiff amended its
particulars of claim on 15 June 2016 to incorporate an alternative
claim for enrichment. On 15 November
2016, by agreement between the
parties, Naidoo, J made the following order:
“
It is ordered
that: (by agreement)
1.
The
quantum and the merits of the action are separated.
2.
The
defendants concede their liability on enrichment as claimed in the
alternative by the plaintiff.
3.
The
defendants shall effect a payment of R 1 200 000.00 to the
plaintiff before 30 December 2016. Should the defendants
not comply,
plaintiff will be entitled to issue a warrant of execution with
immediate effect.
4.
The
parties shall either agree on the remainder of the defendants’
liability before 30 December 2016. Should this not be accomplished,
plaintiff shall be entitled to place the matter on the court roll
again, or place the issue before court as a stated case as soon
as
possible.
5.
All
issues of costs are reserved.”
[5]
The statement of facts was couched as follows:
“
The dispute
:
9.1
The plaintiff concedes that as the order granted in its favour is
based upon an enrichment, it can no longer claim interest
on the term
loan in terms of the written agreement.
9.2
Plaintiff submits therefore that it is entitled to moratory interest
on the outstanding balance as from the date of the loan,
namely 06
January 2012, alternatively as from the date of service of summons,
until redemption thereof. Plaintiff will present
before court during
the hearing calculations reflecting the latest balance owed by the
defendants based upon moratory interest.
9.3
It is defendants’ contention that that (sic) interest can only
begin to run as from the date of the amendment effected
in terms of
Rule 28
during 2016, to base a claim on enrichment. According to
defendants, plaintiff’s causa against them only arose once the
amendment
was effected.”
Issues
to be determined
[6]
The issue to be determined is when interest began to run on the
enrichment claim against the respondents.
The
Parties’ submissions
[7]
Mr Lubbe, on behalf of the appellant, submitted that the crisp issue
in this appeal is the date on which the appellant was entitled
to
levy moratory interest on the amount of money by which the first
respondent was unjustifiably enriched. It was argued in the
court a
quo on behalf of the appellant that the date should be the date of
the initial loan, namely 06 January 2012, alternatively,
as from the
date of service of the summons until the redemption thereof. The
court erred in finding that the amount of the debt
was an
unliquidated debt and, as such, subject to the provisions of
section
2A
of the
Prescribed Rate of Interest Act, 55 of 1975
, instead of
section 1
of the same Act. The court
a
quo
erred
furthermore in finding that the respondents were only placed in
mora
on the
date of the amendment of the particulars of claim on 15 June 2016 as
the respondents were already placed in
mora
when
the original summons was served upon them several years prior to the
amendment. The finding was therefore untenable as it had
the effect
that the initial liquidated claim became an unliquidated claim once
the particulars of claim were amended. The amendment
did not
constitute a new cause of action as the outstanding amount on 15 June
2016 was exactly the same amount as had been sued
for initially. The
court
a
quo
also
erred in its application of the law cited in
Kudu
Granite Operation (Pty) Ltd v Caterna Ltd
[2]
.
The appeal should therefore succeed with costs.
[8]
Mr Grobler, on behalf of the respondents countered that the appeal
was without merit. The court
a quo
had applied the law
correctly. He pointed out that the appellant was not entitled to
claim interest on what it had advanced to the
respondents in terms of
the contract as there was no agreement between the parties as to the
levying of interest at any specific
rate, the date of commencement
and so on because the respondents’ liability arose out of an
agreed enrichment claim. The
claim was not quantified and therefore
unliquidated. He referred to a number of decided cases and submitted
that in the absence
of an agreement as to the interest rate payable
and the date of calculation (and because the claim is unliquidated)
rendered
section 2A
of the
Prescribed Rate of Interest Act
applicable
. The legislature created an entitlement to claim interest
on an unliquidated debt on condition that the debt itself must be
determined
by means of a binding nexus such as a court order,
arbitrator’s award or agreement. Without such an order, award
or an agreement,
interest is not yet payable and may not be claimed.
For purposes of interest there must not only be a debt but the debt
must also
be enforceable. The debt becomes enforceable upon a court
order being granted. An enrichment action is distinctly different
from
a claim in contract as the
facta probanda
are
significantly different.
Discussion
[9]
In support of his submissions, Mr Grobler referred to
Kudu,
supra,
and the following quotation:
“
[15]
Kudu's first contention is well-founded. There is a material
difference between suing on a contract for damages following upon
cancellation for breach by the other party (as in Baker v
Probert
1985
(3) SA 429
(A)
,
a judgment relied on by the Court a quo) and having to concede
that a contract in which the claim had its foundation, which
has not
been breached by either party, is of no force and effect. The
first-mentioned scenario gives rise to a distinct contractual
remedy: Baker at 439A and restitution may provide a proper
measure or substitute for the innocent party's damages. The
second
situation has been recognised since Roman times as one in which the
contract gives rise to no rights of action and such
remedy as exists
is to be sought in unjust enrichment, an equitable remedy in which
the contractual provisions are largely irrelevant.”
[10]
Even though it was conceded in paragraph 10 of the appellants’
heads of argument that the position enunciated in paragraph
28 of the
Kudu
decision
[3]
could not be
faulted, it was stated that the facts of the matter were totally
different from the one at hand. The matter in that
case revolved
around the value of some 179 blocks of granite delivered pursuant to
an agreement whereas
in
casu,
a fixed amount of money was loaned, the terms of the contractual
agreement having been amended to a claim of unjust enrichment.
The
court expressed itself as follows in paragraph 18
[4]
:
“
[18]
Before turning to a consideration of whether Caterna established a
case in these regards, it is necessary to advert to a further
misconception which affected both counsel and the Court a quo.
This was to treat the granite blocks as if they were a subject-matter
of the agreement of sale when it came to the question of what
the defendant was liable to restore. Clause 4.1 of the agreement,
understood in its proper perspective, meant that the blocks were no
more than the coinage by which part of the obligation to pay
the
price for the shares and loan account was discharged. Each block was
by agreement between the parties accorded a specific
monetary
value. On failure of the agreement Caterna was no more entitled to
return of the individual blocks than it would have
been to the actual
notes in the denominations used to discharge a liability to pay in
cash. Nor, if the value attributed by the
parties to the blocks had
been less or more than their market value, would either party have
been entitled to insist on repayment
of the difference, but only a
return of the purchase price as agreed between them, i.e. that
portion of the price of R4 million
represented by blocks and
quantified by reference to the Ruenya B price list. One is not
thereby giving effect to contractual provisions
of a contract which
has failed; one is simply identifying the true substance of the
prestation in terms of the transaction, which
in this case was the
payment of a monetary price and not the sale of blocks. The
misconception led to at least half the trial being
devoted to a
determination of the market value of the granite blocks, a wholly
irrelevant exercise.”
It
would appear that this submission is misplaced.
[11]
We were referred to the following passage in
Commissioner
for Inland Revenue vs. First National Industrial Bank Ltd
[5]
which reads as follows:
“
I
have to disagree. To be in mora there must be a debt and
the debt must be enforceable. (Steyn Mora Debitoris volgens
die
Hedendaagse Romeins-Hollandse Reg at 40; De Wet and
Yeats Kontraktereg en Handelsreg 4th ed at 147;
Joubert
(ed) Law of South Africa vol 5 para 203.) The
Commissioner could not be in mora as regards repayment
until such
time as it was decided that a duty to repay existed. That
was the very point of their understanding: that the money would only
be refundable once it has been established (by a tribunal or by
compromise) that the Commissioner misconstrued the statute and was
obliged to repay the money. Any claim
by the Bank for repayment to be made
prior to the determination of the dispute could be met by the
Commissioner with the defence
that such a claim would be premature
and might yet prove to be idle.
That,
in my view, is the short and simple answer to the Bank's contention:
the Commissioner was not in mora and so cannot
be liable
for interest at tempore morae.”
[12]
The above sums up the issues before us and confirm that the
respondents were not in
mora
until such time that it was
decided that a duty to repay existed. In the circumstances this
appeal stands to be dismissed.
[13]
In the result the successful party is entitled to the costs.
[14]
In the light of the above I propose the following order:
Order
1.
The appeal is dismissed with costs.
____________
J.
MHLAMBI, J
I
concur
____________
M.
MBHELE, J
I
concur
____________
NS.
DANISO, AJ
Counsel
for Appellant: Adv. J Lubbe S.C
Instructed
by: Kramer Weihmann & Joubert Inc.
24
Barnes Street
Westdene
BLOEMFONTEIN
Counsel
for Appellant: Adv S Grobler
Instructed
by : Peyper Sesele Attorneys
Dynarc
House
200
Nelson Mandela Avenue
BLOEMFONTEIN
[1]
2003 (5) SA 193 (SCA).
[2]
2003 (5) SA 193
(SCA).
[3]
Supra.
[4]
Kudu,
supra.
[5]
[1990] ZASCA 49
;
1990 (3) SA 641
(A) at page 652