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[2017] ZAGPPHC 56
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First Rand Bank Limited t/a RMB Private Bank v Bedeker and Others (79372/2014) [2017] ZAGPPHC 56 (22 February 2017)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
CASE
NO: 79372/2014
22/2/2017
Reportable:
No
Of
interest to other judges: No
Revised.
In
the matter between:
FIRST
RAND BANK LIMITED
t/a
RMB PRIVATE
BANK
Applicant
And
ETIENNE-
PIERRE
BEDEKER
1
st
Respondent
ETIENNE
BEDEKER
INC
2
nd
Respondent
THE
PROPERTY BRIDGING FINANCE
COMPANY
3
rd
Respondent
JUDGMENT
RAJAB-BUDLENDER
AJ
1
The Applicant seeks payment of R864 351, 67
in consequence of a suretyship agreement concluded by the 1
st
-3
rd
Respondents in terms of which they bound themselves jointly and
severally for any liabilities which may arise on behalf of Thornbrook
Tuscan Villas (Pty) Ltd (“the principal debtor”), towards
the Applicant. The principal debtor entered into a loan agreement
with the Applicant to finance the development of a sectional title
scheme known as “Villa Thornbrook” which consisted
of 12
sectional title units numbered sequentially 13 to 24.
2
The loan was provided by the Applicant in
terms of a “Single Credit Facility” to which a specific
account number was
allocated. Each of the 12 sectional title
units served as security for the loan by way of a mortgage bond over
it being registered
in favour of the Applicant.
3
The principle debtor has since been
liquidated. The Applicant therefore alleges that it is entitled
to recover the full amount
owing to the Applicant by the principal
debtor, from the Respondents. The Respondents oppose the
application on various
grounds which I deal with below.
The
Applicant’s case
4
The Applicant’s case is as follows:
4.1
The Applicant concluded a credit agreement
with the principal debtor which was secured by the 12 sectional title
units in Thornbrook
Tuscan Villas.
4.2
Whenever one of the sectional title units
was sold, it was released from the mortgage bond and a portion of its
realised profit
would then be used to settle a portion of the
outstanding amount of the loan. The Applicant would then issue
a document which
reflected the revised unit numbers which had not yet
been sold, and on which the remaining amount of the debt owed was
reflected.
4.3
The first agreement, which preceded the
credit agreement from which the debt at issue in this case arose, was
concluded on 26 September
2007.
4.4
This was substituted on 15 January 2009 and
9 units served as security for the indebtedness which may arise from
the agreements
(3 units having been sold and redeemed in the
interim.)
4.5
The agreement was extended twice, on 23
March 2009 and 13 July 2010.
4.6
In the premises, the final agreement
governing the relationship between the applicant and principal debtor
was concluded on 15 January
2009, amended on 23 March 2009 and again
amended on 13 July 2010. Consequently, the document dated 23
July 2010 is the most
recent terms of the agreement between the
Applicant and the principal debtor.
4.7
The principal debtor was subsequently
liquidated and the liquidation process was initiated. In terms
of the administration
of the estate of the principal debtor, the
Applicant received a provisional dividend in the amount of R1 230
000. 00
4.8
After receipt of this amount, the principal
debtor’s account with the Applicant was closed on 28 August
2014 reflecting an
outstanding amount of R864 351.67 – which is
now sought from the 1
st
to 3
rd
Respondents. From the liquidation process, the Applicant is
entitled to receive a further dividend of R185 057.88. At the
date of
the hearing of this matter, no further dividend had been received by
the Applicant.
5
The Applicant contends that the Respondents
are liable for the indebtedness by virtue of suretyship agreements,
concluded as follows:
5.1
On 15 January 2009, the Respondents
concluded a suretyship agreement for any indebtedness which may arise
from the 15 January 2009
agreement.
5.2
The 23 March 2009 amendment contained an
acknowledgment on the part of the sureties that their indebtedness
extended to the 23 March
2009 agreement; and
5.3
The July 2009 amendment contained an
acknowledgment on the part of the sureties that their indebtedness
extended to the July 2009
agreement.
The
Respondents’ case
6
The Respondent opposes the relief sought on
the basis that the certificates of indebtedness are contended to be
replete with errors
and do not constitute proof of the amount owed,
and that the Applicants are therefore unable to correctly prove their
claim.
7
The Respondent claims that when a sectional
title unit was sold, the Applicant would open a new single credit
facility with a new
outstanding capital balance, for which only the
remaining sectional title units would then serve as security in terms
of the mortgage
bond.
8
In short, the Respondents’ argument
is that the original loan agreement dated 15 January 2009 was not
amended on 23 March
2009 and 23 July 2010 but instead each later
single credit facility agreement constituted a completely new
agreement that replaced
and novated the preceding agreement.
They therefore deny that the Applicant can now rely on a certificate
of balance in terms
of the single credit facility dated 15 January
2009 as that agreement has been novated and no rights or obligations
arising therefrom
continue to exist. This state of affairs,
according to the Respondents continued after 23 July 2010 as the
principal debtor
sold off units which were then released from the
mortgage bond and resulted in new SCF’s being concluded from
time to time.
The Respondents also appear to contend that the surety
agreements that they signed on 15 January 2009 do not extend to the
present
indebtedness because they were not concluded in terms of the
currently existing agreement.
9
In addition, the Respondents challenged the
authority of the deponent to the founding affidavit.
The
agreements in dispute
10
The core of the dispute between the parties
turns on the status of the agreements between the parties. I
therefore turn to
examine the relevant agreements.
11
The earliest document recording the
relationship between the parties is dated 11 December 2008. It
is on the face of it, an
offer of a credit facility in the amount of
R5 million, for sectional title units 15, 17 and 18- 24 of Villa
Thornbrook.
The document records that the Respondents are the
sureties and are liable for “
all
sums due or to become due to the Bank arising out of the facility
.”
Under “Special Conditions” the document records that the
first advance under this facility will be used to
repay the
outstanding balance under a different and pre-existing facility
accepted by Thornbrook Villas on 26 September 2007 where
after that
facility would be cancelled and replaced with this facility.
12
The document is signed by Thornbrook
Villas, represented by the 1
st
Respondent, on 15 January 2009. This is the same date on which the
suretyship agreements attached to the papers, are signed.
13
There are three suretyship agreements.
These are signed by all three of the Respondents, and dated 15
January 2009.
Each of the agreements contain the following
relevant clauses:
13.1
Clause 12 provides that the sureties bind
themselves for the due and punctual payment by the debtor of all sums
of money, which
may now be or which may hereafter become owing by the
debtor to the Bank in terms of the single credit facility loan
agreement/s
entered into.
13.2
Clause 4 provides that this suretyship
shall be
a continuing covering security
for all amounts now owing by the debtor to the Bank in terms of the
agreements and shall remain of full force and effect notwithstanding
any fluctuation or reduction in, or extinction for any period
whatever, of the indebtedness of the debtor to the Bank in terms
of
the agreements;
13.3
Clause 6 provides that no alteration or
variation of the agreements or any increase in the facility sum
forming the subject matter
of the agreements which may arise as a
result of an agreement between the Bank and the debtor shall in any
way release the sureties
from liability in terms of the agreement.
13.4
Clause 14 provides that a certificate
signed by any authorised employee of the Bank (whose authority it
shall not be necessary to
prove) shall constitute prima facie
evidence of the outstanding balance owning and due and payable by the
sureties to the Bank
and/or the rate of interest. This
certificate shall be prima facie proof of the contents thereof for
the purpose of provisional
sentence, motion proceedings, default
judgment or any other legal proceedings by the Bank against the
sureties.
13.5
Finally, clause 24 of the suretyship
agreement provides that the surety’s liability shall be limited
to the payment of all
sums due or to become due to the Bank by the
debtor “in terms of or arising out of the RMB Private Bank
Single Credit Facility
dated 11 December 2008 notwithstanding
anything to contrary.”
The
extension agreements
14
Notably, each of the subsequent amendments
(namely that of 23 March 2009 and 23 July 2010 contain under the
section titled “Surety
Consent” an acknowledgment that in
signing the agreement, the sureties acknowledge and agree that their
obligations in terms
of the suretyship agreement dated 15 January
2009 shall extend to this single credit facility. It goes on to
state that “
this acknowledgment
shall not be construed as substituting, varying or novating any of
our existing obligations in terms of the
suretyship agreement save as
provided in this letter
.” Both
the 23 March 2009 and 23 July 2010 agreements are signed by the
Respondents.
15
Having considered the clear language of the
single credit facility agreements, as well as the signed surety
agreements, I am of
the view that it was at all times perfectly clear
that the nature of the agreement between the parties was one of a
continuing
covering security agreement and that accordingly, the
amount of the indebtedness would fluctuate over time as the debt was
paid.
Moreover, the extension agreements of 23 March 2009 and 23 July
2010 were not novations but were valid extensions of the main
agreement
between the parties. Therefore, the SCF
agreement relied on by the Applicant was not a new SCF only entered
into on
23 July 2010. The suretyship agreements signed by each
Respondent accordingly remain valid and enforceable.
The
Certificates of Indebtedness
16
There is some dispute about the validity of
the certificates of indebtedness attached to the papers. There are
three certificates
of balance attached to the papers. The
Respondents dispute the accuracy of those certificates.
17
The Applicants concede that the original
certificate of balance contained an error in that the dates of the
relevant agreements
referred to were incorrect. Pursuant to the
Respondents issuing notices in terms of Rule 30A, Rule 18 and Rule
35(12), the
Applicant filed a supplementary affidavit to which a new
certificate of balance was attached. Neither the account number
nor the amount of indebtedness differed in this corrected
certificate- only the dates of the agreements referred to changed.
18
The Applicant refers to the purpose of the
certificate as evidenced by clause 15.6 of the single credit facility
itself (the terms
and conditions). This provides that the certificate
is intended to be
prima facie
evidence of:
18.1
The outstanding balance owing to the Bank;
and
18.2
The rate of interest payable.
19
The Applicant contends that despite an
error in the dates of the agreements, the critical information
remained unchanged and the
certificate remains prima facie proof of
the amount owed. Therefore, the Applicant submits that nothing
turns on the error
in dates. In this regard, the Applicant
correctly relies on
Senekal v Trust Bank
of Africa Ltd
1978 (3) SA 375
(A) at
382F-383A in which (also in the context of a suretyship agreement,)
the Appellate Division held that an error in the certificate
of
indebtedness does not require that the entire certificate is to be
disregarded by the Court.
20
The Respondents’ objection to the
certificates appear to be that they incorrectly refer to the various
agreement dates and
that they constitute amendments to the agreement
rather than new agreements. I am of the view that as indicated
by clause
15.6 of the Loan Agreement, the certificate is intended to
constitute prima facie proof of the amount due and rate of interest.
I am further of the view that the minor errors in the
certificates are not material and have been sufficiently correctly.
The
amount owed
21
The Respondents themselves appear somewhat
confused in their argument. Although the Respondents appeared
during the hearing
of this matter, and in their heads of argument, to
have contested whether they owed anything to the Applicant at all, in
a letter
dated 8 August 2014, Mr Bedeker, acknowledged liability for
an amount to be determined. He asked for a breakdown of how the
amount claimed was calculated and offered to open a new amount in his
personal capacity for the remaining amount, to be paid in
monthly
instalments by him.
22
The Applicant declined to do so.
23
The Applicant explains the calculation of
the amount claimed as follows:
23.1
The Applicant proved a claim against the
insolvent estate of the principal debtor. In this claim, unit
16 was incorrectly
included in the security referred to. The
Applicant alleges that the incorrect reference to unit 16 is of no
consequence
as the estate was administered to only reflect units 19,
20 and 21. This is clear from the Reconciliation Statement of
the
Liquidation and Distribution Account of the principal debtor.
23.2
In terms of the administration of the
estate the Applicant received a provisional dividend in the amount of
R1.230 000.00 made up
as follows:
23.2.1
On 2 April 2014, a payment of 750 000.00
was made to the Applicant in respect of units 19 and 20 and on 25
June 2014, a further
payment of 480 000.00 was made in respect of
unit 21.
23.2.2
On 28 August 2014, the account of the
principal debtor with the Applicant was closed reflecting a closing
balance of R864 351.67.
This is the amount reflected on the
certificates of balance. The Applicant further attaches
statements of the principal debtor’s
account in proof of this
amount.
23.2.3
From the liquidation process, the Applicant
is still entitled to a further dividend of R185.057.88. At the
date of the hearing,
no further divided was received by the
Applicant. In anticipation of this dividend, the Applicant’s
letter to the Respondents
dated 27 August 2014 calculated the amount
owed as R622 723.94. However, in the absence of that dividend
being paid to the
Applicant, it remains entitled to claim that amount
from the Respondents as sureties, in terms of the suretyship
agreement.
24
The Respondents have not provided any
evidence to persuade me that the amount claimed on the certificate of
indebtedness and in
this application, is incorrect. The
Applicant has, in contrast, provided a full and substantiated
explanation of how the
amount claimed was calculated and why it is
correct.
25
Moreover, at the hearing of this matter, it
was argued on behalf of the Respondents that the Applicant had placed
multiple versions
before this Court and that accordingly the matter
could not be decided on the papers. I am not persuaded of this
argument.
The Applicant’s version has remained that the
Respondents signed surety for the entire amount owed, notwithstanding
fluctuations
over time. The Applicant also contended throughout
that the loan was secured by various sectional title units, which
itself
changed over time, as each unit was sold and the overall
amount due to the Applicant was reduced.
26
The Applicant has conceded to inaccuracies
in the dates on the certificates of indebtedness. As I have
found above, such inaccuracies
did not alter the critical information
contained there, namely the amount owed, the account number and the
rate of interest.
27
Finally, the Respondents allude to the fact
that this matter is incapable of being resolved on the papers. I do
not agree.
All relevant documents are contained in the papers.
The Respondents do not dispute this, nor do they allege that there
are other
documents with which they have not been provided. All
documents requested by the Respondents in terms of the Rules, were
provided and form part of the papers before me. The Respondents do
not contend that they did not sign the suretyship agreements,
or the
single credit facility agreement or subsequent extensions. The
documents speak for themselves. It is trite that
the
interpretation of a contract is a matter of law and not of fact.
(
KPMG Chartered Accountants (SA) v
Securifin Ltd and Another
2009 (4) SA
399
(SCA))
28
This court is accordingly in a position to
interpret the contract without the need for a referral to oral
evidence as to its nature
or terms.
Challenge
to the authority of the Applicant’s deponent
29
Finally, the Respondents have challenged Mr
Verster and Mr Botha’s authority to depose to the affidavits on
behalf of the
Applicant
30
The authority of both Mr Verster and Mr
Botha, to depose to the affidavits on behalf of the Applicant is
clear from a delegation
of authority document attached to the
papers. This document is attached to a Resolution of the Board
of Directors of the
Applicant dated 24 November 2008. The
Resolution states
inter alia
that the Chief Executive Officer of the Applicant is authorised to
delegate any his powers to any official of the Bank and that
sub-delegations of such powers are authorised. The Applicant
accordingly attaches a sub-delegation of authority document
which
makes clear that the CEO of the Applicant delegates the power
inter
alia
to institute legal action and sign
any documents required for purposes of legal proceedings, to Mr
Verster, who in turn delegates
such power to Mr Botha.
31
Mr Botha deposed to the founding affidavit
and supplementary affidavit while Mr Verster deposed to the
supplementary founding affidavit
and the Replying Affidavit. Counsel
for the Respondents contended at the hearing that there was no proof
of delegation to Mr Verster
by the CEO.
32
Counsel for the Applicant correctly
contended that it is irrelevant whether the deponent to the affidavit
is authorised to depose
to the affidavit. The real question is
whether the party instituting the action had the authority to do so.
As held
by the Supreme Court of Appeal in
Ganes
and Another v Telecom Namibia Ltd
2004
(3) SA 615
(SCA) at para 19:
“
In my
view, it is irrelevant whether Hanke had been authorised to depose to
the founding affidavit. The deponent to an affidavit
in motion
proceedings need not be authorised by the party concerned to depose
to the affidavit. It is the institution of the proceedings
and the
prosecution thereof which must be authorised. In the present case the
proceedings were instituted and prosecuted by a firm
of attorneys
purporting to act on behalf of the respondent. In an affidavit filed
together with the notice of motion a Mr Kurz
stated that he was a
director in the firm of attorneys acting on behalf of the respondent
and that such firm of attorneys was duly
appointed to represent the
respondent. That statement has not been challenged by the appellants.
It must, therefore, be accepted
that the institution of the
proceedings was duly authorised. In any event, Rule 7 provides a
procedure to be followed by a respondent
who wishes to challenge the
authority of an attorney who instituted motion proceedings on behalf
of an applicant.
The appellants
did not avail themselves of the procedure so provided. (See Eskom v
Soweto City Council
1992 (2) SA 703
(W) at 705C - J.)”
See
also: Unlawful Occupiers, School Site v City of Johannesburg
2005
(4) SA 199
(SCA)at para 14.
33
In the present case, the Respondents do not
challenge the authority of the Applicant’s attorneys to
institute these proceedings.
In the circumstances, the
challenge to Mr Verster’s authority must fail.
Costs
34
In its notice of motion, the Applicant
sought punitive costs against the Respondent. Neither party
addressed me at the hearing
or in their heads of argument on the
issue of why punitive costs were called for in this case. In
the circumstances, I am
of the view that an ordinary order of costs
is appropriate.
35
I therefore make the following order
:
35.1
The Respondents are ordered (jointly
and severally, the one paying the other to be absolved) to make
payment to the Applicant of
the following:
35.1.1
The amount of R864.351.67
35.1.2
Interest on the amount of
R864.351.67, calculated daily and compounded monthly at a rate of
8,25% per annum, calculated from 10
September 2014 to the date of
this order.
35.2
The Respondents are directed
(jointly and severally, the one paying the other to be absolved) to
pay the costs of this application.
_______________________
N.
RAJAB-BUDLENDER
ACTING
JUDGE OF THE HIGH COURT OF SOUTH AFRICA
GAUTENG
PROVINCIAL DIVISION, PRETORIA
Date
of Judgment:
22 February 2017
Counsel
for the Applicant:
Adv J. Roux
Instructed
by:
Delport Van Den Berg Inc
Counsel
for the Respondents:
Adv S.D. Wagener SC
Instructed
by:
Gerhard Wagener Attorneys