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[2017] ZAGPPHC 181
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BMW Financial Services (SA) (Pty) Ltd v Finlay and Others (55858/10; 55860/10; 56219/10) [2017] ZAGPPHC 181 (24 February 2017)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
24/02/2017
CASE
NO: 55858/2010; 55860/2010; 56219/2010
Reportable:
No
Of
interest to other judges: No
In
the matter between:
BMW
FINANCIAL SERVICES (SA) (PTY)
LTD PLAINTIFF
and
FINLAY,
SEAN
ALISTER 1
st
DEFENDANT
TABATA,DUMI
SANI
DUMEKHAYA 2
nd
DEFENDANT
PASCOE,JOHN
LEVALLON 3
rd
DEFENDANT
TWO
SHIPS TRADING 148 (PTY)
LTD 4
th
DEFENDANT
AMABUBESI
MOTOR TRADING GROUP (PTY)
LTD 5
th
DEFENDANT
Coram:
HUGHES J
JUDGMENT
HUGHES
J
INTRODUCTION
[1]
The Amabubesi Motor Trading Group (Pty) Ltd (the Motor Group) is made
up of three companies carrying on the business of motor
vehicle
dealerships which shareholding composition consisted of the second
defendant, Mr Dumisani Tabata, holding 6%, the fifth
defendant,
Amabubesi Investment (Pty) Ltd holding 49% and Padix 4 (Pty) Ltd with
a 45% shareholding.
[2]
The third defendant, Mr John Pascoe (Pascoe), and a Mr Roger Dixon
(Dixon) were shareholders of Padix 4 (Pty) Ltd. Mr Dixon
practised as
an attorney since as far back as 1978. Both he and Mr Pascoe had
gained experience as motor vehicle dealers having
traded as such at
BMW Umhlanga dealership for many years. The second defendant, also an
attorney by profession, joined the Motor
Group in 2006 by way of his
motor dealership, Amanzimtoti Ford and Mazda.
[3]
The plaintiff, BMW Financial Services (SA) (Pty) Ltd (BMW), provided
credit to the Motor Group to buy and sell motor vehicles.
The credit
facility agreements are referred to as floorplan agreements.
According to these agreements BMW will retain ownership
on the
vehicle on the dealers trading floor until paid and the dealer would
be responsible to pay interest and finance charges
on the credit
facility provided by BMW. The first, second and third respondents
signed suretyship agreements for the credit facility
provided to the
Motor Group.
[4]
Mr Clive Steyn (Steyn), the then Commercial Finance Manager of BMW,
was the facilitator of the floorplan credit facility of
R26 million
offered to the Motor Group. The terms of the floorplan agreements
included, but not limited to, BMW obtaining personal
sureties from
the shareholders of the Motor Group and a cross company guarantee
from the then Amabubesi Motor Trading Group (Pty)
Ltd, now known as
the Motor Group. Though the personal sureties were obtained the
guarantee was never obtained.
[5]
By agreement between the parties, the case before me only involves
the suretyship agreements signed by the second respondent,
Mr
Dumisani Dumekhaya Tabata (Tabata). The matters involving the other
two respondents, Mr Sean Alistair Finlay (Finlay) and Pascoe,
will be
dealt with separately and not in the current case.
[6]
Both Dixon and the second respondent testified in the case of the
second respondent. Mr Dixon testified that Amabubesi Motor
Group
sought to sell its shares to Vuwa Investments (Pty) Ltd (Vuwa). The
deal was structure in such a way that the second respondent,
Dixon
and Pascoe purchased interest in Amabubesi Investments (the majority
shareholders in the Motor Group) and sold these share
onward to Vuwa.
In doing so release figures were required from creditors who held
suretyships in Amabubesi Investments. According
to the sales
agreement of the shares the Dixon and Pascoe were the responsible
persons tasked to obtain release figures for the
surety's held by
Amabubesi Investments.
[7]
Dixon testified that in order to obtain the release figures for these
suretyships he wrote to Wesbank, Standard Bank and BMW
attaching the
sales agreement and requested the release figures. He attached the
agreement as one of the suspensive conditions
was that the release
figures be obtained. In response, and after an addendum was made to
the sales agreement, to grant an extension
of time, he obtained
figures from Wesbank and Standard bank. However, none was forth
coming from BMW.
[8]
The request of 9 May 2007 was along the following line:
"RE:
SALE BY VUWA INVESTMENTS (PTY) LTD & DUMISANI TABATA TO PADIX
INNVESTMENT 4 (PTY) LTD & ALISON BECK OF 55% OF
VUWA MOTOR GROUP
Herewith
a copy of the signed agreement relating to the abovementioned
transaction.
You
will note that your consent to the release of Vuwa Investments (Pfy)
Ltd and/or Dumisani Tabata by not later than 28th May 2007
is a
precondition.
We
would appreciate it if you would advise us of your requirements with
a view to securing the necessary releases by not later than
the 28th
May 2007 deadline."
[9]
Dixon's evidence is that he did not anticipate any difficulties in
obtaining the releases from the creditor, the aforesaid sale
was to
the advantage of the creditors as the dealership was
"struggling"
and
"its cash flows were at times critical".
in
addition it was a material term of the sale agreement that
"Padix
will extend to such creditors its own guarantee/s in substitution for
those executed by Vuwa and/or Tabata if so required
by the
creditors."
thus Dixon states that he was confident that
they had alternative security to settle the creditors is so required.
[10]
He also testified that a term in the sale agreement made mention that
Vuwa and/ Tabata had executed guarantees/deeds of suretyship
in
favour of one or more or all of the following entities being Standard
Bank, Wesbank and BMW. This is found in
paragraph
8.1 of the agreement. He was adamant that he was not aware which
institution did Tabata and or/ Vuwa had executed guarantees/deeds
of
suretyship in favour of.
[11]
Dixon goes further to state that he followed up his written request
with a telephone calls to all whom he had addressed requests.
He
states he is not sure of the date as it took place nine years ago,
but this would have been shortly after his written request.
He spoke
to each one of those whom he had written to. At Standard Bank he
spoke to Russell Parkinson, at Wesbank, J C Peters and
at BMW Clive
Steyn.
[12]
The telephone call to Clive Steyn is disputed by the applicant, BMW,
and Steyn. Dixon's testimony is that he had a short conversation
with
Clive Steyn who advised him that no suretyship's existed for Vuwa or
Tabata and he accepted this information as there was
no reason to
disbelieve Steyn. He was at pains to explain that the telephone calls
were made to speak specifically about the request
of the suretyships
or guarantees as he was eager to start the process as quickly as
possible, as the equity capital injection was
coming from another
company being Treacle. Following on the telephone calls made, he
informed Tabata as it was '
a
condition precedent to the
contract that I have him released.'
When asked what did he tell
Tabata, Dixon testified that
'I told him that there were no
suretyships in place for him or Vuwa with BMW Financial Services,
that I'd been so advised by Mr
Steyn and that therefore it was just
one hurdle out of the way.'
[13]
Dixon further stated that two addendums were affected to the
agreement until the releases were obtained as such the last addendum
was para 1.3 which reads as follows:
'The consents and releases
referred to in clause 8 and 9 and the conditions attached to such
consents and releases have been secured
and the sale contract is
consequently unconditional.'
The clause mentioned were those
referred to in respect of obtaining the suretyships and guarantees.
[14]
Dixon concluded that he provided a letter to both Tabata and Mr
Ngcuka who were selling their shares as to the status and progress
of
the transaction on 28 July. In that correspondence no mentioned is
made of BMW and when asked why this is so he responded as
follows:
'...
[It] was not an issue in my life. I'd been informed that
there were no suretyships and I've moved from that moment.'
[15]
Tabata testified that Dixon reported to him that BMW Financial
Services had informed him
'that there were no suretyships for me
and Vuwa Investments'.
This information came to light after 8 May
2007 but before 28 May 2007 and he had no reason to disbelieve it as
'I (he) was uncertain at the time, about whether I (he) had signed
a suretyship and for which of the entities ...finance houses that
were listed. I (he) wasn't certain which one held my suretyship and
which one held Vuwa Investments suretyship.' He goes on further
to
testify that '...from the time I was informed about this
representation, by the plaintiff, the issue of a suretyship with BMW
Finance for either myself or Vuwa investments was not an issue and I
concluded the transaction on the basis that a suretyship did
not
exist, for myself and Vuwa.'
[16]
Tabata stated that on 12 October 2007 he sighed the last addendum to
the contract indicating that the releases had been secured
and that
the sale agreement was now unconditional. Following on this he wrote
to Anthony Crane (Crane), an attorney responsible
to make the pay-out
for the sale of the shares advising into which accounts the deposits
were to be made and that he should
'indicate when the releases
from the securities will be available?'
Crane replied on 16
October 2007 advising that the payment in respective bank accounts
were made and that
'As soon as I
(he)
received word from
Padix Investments, I
(he)
will meet with them in order to
exchange the release documentation for the share certificates and
related documentation.'
[17]
Further, Tabata testified that after the sale was concluded he was
happy that he was no longer involved in the dealership the
financial
institutions, Standard Bank and Wesbank, being satisfied that the new
purchases could take over the sureties in place.
However, this was
short lived as in November 2010 his attorneys sent through a letter
dated 10 November 2010 to the plaintiff’s
attorneys after they
proceeded with an action against him, Dixon and Pascoe in three
separate summons to recover on a suretyship
he had signed. The import
of the letter is set out below:
'I
am instructed that during May 2007 Mr. Dixon, on behalf of the
purchaser of Vuwa Investments' shares in the Company, requested
whether any suretyships had been given on behalf of the Company in
favour of your client by Vuwa Investments (Pty) Limited and/or
Dumisani Tabata. He forwarded a copy of the sale agreement to your
client and in terms of the sale agreement the sale was conditional
on
the release of Vuwa Investments (Pty) Limited and /or Dumisani Tabata
from any suretyships that may have been given including
any
suretyship in favour of your client. Mr Dixon advises that he was
instructed by your client that no suretyships had been given
in
favour of your client by Vuwa Investments (Pty) Limited and/or
Dumisani Tabata. Relying on this representation an addendum to
the
sale agreement was signed confirming that the suspensive conditions
had been fulfilled and the sale agreement in respect of
the shares of
Vuwa Investments to Padix and Mrs. Becks became unconditional and
fully performed.
I
confirm that I have entered an appearance to defend the action
instituted against Dumisani Tabata and based on the above facts,
taking into account your client's full knowledge of all steps of the
transaction in respect of Zimindlela Motor Group (Pty) Limited,
it
appears to me unconscionable for your client to have instituted an
action against Dumisani Tabata and, in any event, that your
client
would be estopped from making this claim.'
[18]
To the aforesaid correspondence the plaintiff’s attorney
replied stating that they had informed their client of the issues
raised and it had instructed them to deny the allegations advanced,
as is set out above, and deny those allegation made in respect
of
their client. Lastly, they stated they were proceeding ahead with the
action.
[19]
Steyn in his testimony confirmed that he had received the request of
Dixon as regard suretyships for Tabata and or/Nuwa. He
then
transmitted this email correspondence to Anne Humphries, who had
taken over his department as from end of February 2007. He
stated in
the forwarding correspondence the following:
'Just when you
thought you had enough work...This fax came today regarding the sale
of shares in the Vuwa Group. Have fun'.
He explained that he said
these states
'facetiously'
as he knew should not have fun as
he stated
'...because I knew that these type of requests are
complex and it would properly be quite the opposite as I knew Anne.'
[20]
He was adamant in his evidence in chief that he received no phone
call from Dixon, in fact he stated that after he transmitted
the
correspondence to Humphries he did not hear anything internally or
externally about it and
'as far as I
(he)
was concerned it
was handled'.
He explained that the original suretyship
agreements were kept in a walk in safe in a filing cabinet which
housed the dealer files
in alphabetical order.
[21]
In cross-examination Steyn was at pains to explain that once he had
passed the correspondence on, as it was no longer his area
he did not
follow up on it and even though he had consulted with Humphries and
he had never asked what she had done with the request.
Steyn
explained that it was quite an extensive task to obtain release from
ones suretyship and it involved interaction with legal
department,
local credit committee and if a decision was taken to release a
letter would be sent out co-signed by the legal department
and his
department which was now headed by Humphries. This could take place
by emails in the form of round robin discussion culminating
in
ad
hoc
meeting to discuss whether to release or not. The process
take from a day if urgent to a week from whence the request was made.
Lastly, when asked whether Dixon was making up the call he replied:
'I don't know. I think the contents of the call is probably more
of an issue because I would not have just said there was no surety.'
[22]
During the course of cross-examination it came to the fore that Steyn
had provided to the defendants the email request from
Dixon, together
with the email of his onward transmission to Humphries, only a week
before the trial. When asked why this was so
he stated:
"M'Lady,
I was actually quite surprised in consultation with my legal team as
to why it wasn't already part of the documents
before this, before
last week. I raised it with my legal team in 2011 already if I'm not
mistaken and it's been part of the documents
and then in consultation
with them on Friday the 6th of May I think it was I. I referenced
this letter because I remember the letter.
I remember the detail of
it and I remember me sending it on. So they didn't have it so that's
when I asked them to please include
it."
Steyn confirmed
when asked by the court that these emails were available to the
plaintiff as far back as 2011.
[23]
Steyn was questioned about the credit facility that was sought by the
group, then known as the Zamindlela Motor Group, in 2008.
In the
credit facility application documents placed before the court, which
were signed by Humphries, the commercial manager, the
brief
motivation to support the grant of the facility review advanced by
Humphries, makes mention of other sureties but not that
of Tabata.
The only sureties which were record to be held by the plaintiff in
these documents were that of Dixon and Pascoe. Steyn
confirmed this,
however, he did state that other sureties were also not mentioned and
he further states that these comment in the
review credit
applications were those of the plaintiff. It was put to Steyn that
the suretyship of Tabata is not mentioned in the
aforesaid review
documents because the plaintiff did not know it had the suretyship of
Tabata. It was further put to Steyn that
as there was no surety for
Vuwa the must have assumed there was none for Tabata, hence the
transmission to Dixon from Steyn that
there was no suretyships for
Vuwa and Tabata. Steyn denied that he advised Dixon that there was no
suretyships and stated that
he could not comment on what Humphries
did as he was not there.
DUTY
TO BEGIN
[24]
The time old saying of 'One who alleges must prove' comes into play
in this matter. Tabata acknowledged, rightly so I might
add, that he
had the duty to begin as he was the one who alleged estoppel and
sought to be released from the suretyship with the
plaintiff on the
basis of the alleged representation made by Steyn.
THE
SURETYSHIP AGREEMENT BETWEEN TABATA AND BMW
[25]
It was argued by the plaintiff's counsel, Adv. Beckers SC, that the
suretyship agreement between BMW and Tabata, precluded
reliance on
oral cancellation, revocation or withdrawal from the suretyship. He
pointed out that this is clear from clauses 3.6
and 3.12 of the
suretyship agreement. Adv. Beckers SC stated that as the
representation made by Steyn is alleged by both Dixon
and Tabata to
have been made orally the second defendant could not rely on this
representation in order to attain a release from
the suretyship, as
this is precluded from the suretyship agreement.
[26]
For easy reference clause 3.6 and 3.12 are set out below:
"3.6
This suretyship is a
continuing suretyship that shall remain
of full force and effect, notwithstanding the fluctuation in, or
temporary extinction of,
the Customer's obligations to BMW Financial
Services. This suretyship may not be withdrawn, revoked or cancelled
without BMW Financial
Services prior written consent.
3.
12 This document was fully completed prior to signature by the
Surety. The suretyship may only be amended or cancelled where
such
amendment or cancellation is reduced to writing and signed by the
Surety and BMW Financial Services. BMW Financial Services
shall not
be bound by any undertakings, representations or warranties not
expressly recorded in this document."
[27]
I think it is also prudent to set out that pleaded by Tabata as
regards the release:
"22.16
Between 8 and 28 May 2007, the plaintiff, represented by Mr Steyn,
orally advised Dixon, that the plaintiff did not
have a suretyship or
guarantee executed by Vuwa or the second defendant (hereinafter
referred to as "the representation”).
22.18
Dixon informed the second defendant thereof, as the plaintiff must
have contemplated would occur, and Dixon caused to be drawn
up and
signed, am
addendum
to annexure "H" which recorded inter alia that the second
defendant had
been released from all the suretyships, and
which the sellers and the purchasers accepted. A copy of the addendum
is annexed ...marked
"I".
RELEASE
22.19
In the circumstances, the plaintiff released the second defendant
from the operation of the suretyship, alternatively, terminated
it,
alternatively is deemed to have done so.
[28]
In addressing this line of argument advanced by the plaintiff I am
guided by the dicta in the case of
Morgan and Another v Brittan
Boustred Ltd
1992 (2) SA
77
(A).
In this case the clause
which was under consideration was identical to clause 3.6 in the
suretyship agreement between BMW and Tabata.
See
Morgan at 782F-G.
In essences, Nestadt JA held, that this clause read with the
provisions of section 6 of the General Law Amendment Act 50 of 1956,
provides for a suretyship agreement to be in writing, but does not
preclude an oral cancellation. See
Morgan at 782H-I.
Thus on a
reading and interpretation of clause 4, the suretyship agreement
would require the written consent of the creditor (BMW)
if the surety
(Tabata) wished to withdraw, revoke or cancel the suretyship
agreement. In the case of a cancellation where the terms
of the
suretyship were not in dispute an oral cancellation was permitted. In
the case of a cancellation of consensual or bilateral
cancellation in
terms of clause 3.6 no written consent is necessary. This is so as it
does not amount to a variation or waiver
of the suretyship agreement
itself, but it rather brings to an end the entire suretyship
agreement. In my view, this is what is
encompassed in the request for
the release sought by the surety from the creditor. See
Morgan at
784C-I.
[29]
In this matter Adv. Beckers SC refers to the cases of
Tsaperas and
Others Boland Bank Ltd
[1995] ZASCA 150
;
1996 (1) SA 719
(A) and that of HNR Properties
CC
and Another v Standard Bank of SA Ltd
2004 (4) SA 471
(SCA)
in support of his argument. I am of the view that these two cases
are distinguishable from
Morgan,
as the relevant clauses in
those two case indicated that the termination and the release,
respectively, be in writing.
[30]
In my view, the argument advanced by the plaintiff, that the oral
representation could never have amount to a cancellation,
as written
consent or cancellation could only take place in writing, must fail,
as according to
Morgan
the interpretation of the exact clause
in this current matter does not preclude cancellation orally.
[31]
The enquiry though does not end there and I now turn to the two
defences, of estoppel and that of a tacit term advanced by
the second
respondent.
ESTOPPEL
[32]
In the introduction above Dixon alleges that he informed Tabata that
Steyn represented to him telephonically that the plaintiff
had no
suretyship agreements in respect of both Tabata and Vuwa. On the
other hand we have Steyn alleging that he did not inform
Dixon that
the plaintiff had no suretyship agreements for Vuwa and Tabata. In
these circumstances I acknowledge that I am guided
by the dicta in by
Wessels JA
National Employers Mutual General Insurance Association
v Gany
1931 AD 187
at 199.
[33]
The crux of Tabata's pleadings with regards to estoppel is that the
representation caused him to be advised that the plaintiff
held no
suretyship and even if it had, plaintiff would not rely on it.
Further, that the representation was made negligently and
relying on
the representation Tabata acted to his prejudice with the
implementation of the sales agreement.
[34]
It is trite that the onus lies with the person who raises the
estoppel to prove that the representation upon which the estoppel
was
founded was in fact made. Zulman JA in
Absa Bank Ltd v I W
Blumberg and Wilkinson
[1997] ZASCA 15
;
1997 (3) SA 669
at 677H
states the
following:
"Plainly,
a party wishing to rely on estoppel must plead it and prove its
essentials (see, for example, Blackie Swart Argitekte
v Van Heerden
1986 (1) SA 249
(A) at 260I)"
[35]
The objective evidence before me is that found in the documents on
file. Tabata signed a suretyship with the plaintiff on 20
April 2006
and he also concluded the 'Contract for the sale of shares' on behalf
Vuwa and himself on 26 April 2007. An addendum
to this contract was
concluded and signed by Tabata on 12 October 2007 which stated that
the contract was no longer conditional
as the conditions in clauses 8
and 9 of the contract of sale of shares had been fulfilled. On 8 May
2007 Dixon wrote requests to
Standard Bank, Wesbank and BMW for
consents to be released from suretyships if any. On the very same day
Steyn transmitted this
request to Humphries by email. Yet another
addendum to the contract was signed by Tabata on 11 June 2007 to
accommodate an extension
of time to obtain the releases by 6 August
2007. On 15 May 2007 a written release was provided by Wesbank to
Tabata and Vuwa. The
release from Standard Bank to Vuwa is dated 2
November 2007.
[36]
The delivery date for the releases of Standard Bank, Wesbank and BMW,
in the initial contract, was 28 May 2007. Dixons testimony
is that
between the 8 May 2007 and the 28 May 2007 he telephoned all three
institutions following up on his correspondence for
the releases.
Did
the call to Steyn take place?
[37]
The case made out by the plaintiff is that Steyn did not receive a
telephone call from Dixon as Dixon alleges. The objective
evidence as
stated above indicates to me that the party that sought the releases
moved the deadline dates in order to accommodate
the institutions and
thus it probable that Dixon was liaising with the institutions to
obtain these releases prior to the deadline
dates. Why else would he
cause the addendums which catered for the extension to obtain the
releases? Having said so it stands to
reason, to me that he would not
have excluded BMW from follow up exercise and liaisons as regards an
extension to obtain releases
if there was a release to be obtained
from BMW.
[38]
A further indicator that it more likely and probable that the call
did indeed take place is the fact that the BMW transcriptions
of the
three telephone calls during the period of 8 to 28 May 2007. The
first is a telephone call from BMW to Dixon where BMW via
Dixon's
voicemail is told to leave a message. The second one is also from BMW
and yet again to Dixon's voicemail but this time
Diane from BMW
Finance lets Dixons know that she is sorry she missed his call and
she was going to try again later. The last call
from BMW is to
Dixon's voicemail. Though there is no evidence from the plaintiff of
the exact dates that the calls were made it
is telling that BMW had
missed a call from Dixon during that specific period. What also ties
up with this is the fact that Dixon
was to expect a call as Diane had
advised she would try him again.
[39]
In addition to the above is his testimony in cross-examination when
he was asked if Dixon was lying about the call, his response
was:
'I
don't know. I think the contents of the call is probably more of an
issue because I would not have just said there was no surety.'
[40]
The probabilities taking into account the objective facts together
with the evidence and Steyn's testimony above, in my view,
point to
Dixon having made that call to Steyn as Dixon testified.
Was
the misrepresentation such that it mislead Tabata?
[41]
Adv. Beckers argued that Tabata's evidence that one year after he
signed the suretyship he did not know or was uncertain as
to whether
he had signed cannot be accepted as being true.
[42]
Let us examine the testimony of Tabata. He was asked if he recalled
signing the suretyship when summons was served upon him
in 2010. His
reply was when this document was signed it was at the time Vuwa was
being established, he was busy and a lot was going
on so he does not
have an independent recollection of having signed the document. Now
in 2007 when he signed the contract for the
sale of his shares, he
was asked if at that signing whether he knew he had signed a
suretyship for BMW. He replied that he did
not and explained that the
reason was the wording is
'Vuwa and/ or Tabata'
in the
contract of sale of shares is because he was uncertain for which
financial institutions he had signed suretyship agreements
on his
behalf and/or on Vuwa's. He further stated that the contract
delegated a specific person (Dixon) to establish as a matter
of fact
to whom suretyships were assigned to.
[43]
One of the essentials for estoppel to be successful is that the party
that claims that they were misled must show that they
were all the
while not aware of the correct position. See
Simpson v Selfmed
Medical Scheme
1992 (1) SA 855
(C) at 860H- 866F,
where estoppel
was not successful as the assertor knew the true facts all alone that
she could not comply with the explicit requirements
of her previous
membership of a medical scheme.
[44]
In the current situation the testimony of the Tabata, to my mind, is
clear, when the summons was served in 2010 he could not
recall the
signing of the suretyship document and when he signed the contract
for the sale of share in 2007 he was not certain
for which entities
he had signed suretyship agreements for and on behalf of himself and
Vuwa. There is nothing untoward about the
response that he has
advanced that points to him being untruthful about this aspect. In
addition, he testified further, stating
that he would have attained
clarity as the contract tasked the Dixon to establish exactly that,
who held suretyships and for whom.
[45]
Another essential of estoppel is that Tabata had to show that he
relied on the misrepresentation and acted on it to his detriment.
In
this instance he testified that he had no reason to doubt Dixon when
Dixon told him what Steyn had advised, that there was no
suretyships
for him or Vuwa. Dixon was assigned to establish just that in terms
of the contract of sale of shares. Dixon had issued
out written
requests to all the relevant institutions including BMW. He had
obtained feedback from the other two institutions as
regards what
they required for the release to be granted, and eventually the
releases where granted.
[46]
Besides what is stated above I cannot understand why the only
institution that did not respond to the written request, which
the
plaintiff confirms it received, was BMW. Even in the face of their
suretyship requirements, as set out in their suretyship
document,
they would have had the knowledge of the suretyship agreements as
they had the originals in safe keeping. It would be
strange for BMW
not to respond to the request when they had a duty to do so and had
done so on previous occasions when requested
by the very same
parties. To me this conduct is clearly not consistent with their past
conduct in these circumstances.
[47]
I agree with Adv. Morisons SC, for the second defendant, that at the
time of the request BMW did nothing because there was
nothing to be
done. Unlike the other two institutions who engaged with Dixon after
receipt of his request.
[48]
I also take into account the testimony of the witness's for the
defendant as regards the conduct of BMW in prior dealings with
the
defendants when BMW was supposed to ensure that there was suretyship
for Amabubesi Motor Group financial transactions and it
came to light
that they had failed to pursue this avenue even though it was a
requirement for the grant of the financial assistance
to Amabubesi
Motor Group.
[49]
Ultimately, the last addendum is drafted and signed in October 2007
stating that the conditions had been fulfilled and Tabata,
to my
mind, had nothing to fear as both Standard Bank and Wesbank were on
board and there were no suretyships with BMW as per Steyn
of BMW. He
was thus, in my view, entitled to conclude the sale of his shares as
there had been compliance with the contract.
[50]
What is also evident from the documents on file is that the company
and parties who bought the shares of Tabata and Vuwa had
to undergo
credit verification checks through BMW as they were providing
finance. Throughout those checks mention is made of other
suretyship
agreements that BMW held of the directors and the new entity. Nothing
what so ever is mentioned of the suretyship that
BMW had with Tabata.
One would have expected this information to emerge from the
electronic records that are generated when the
credit check is being
conducted.
Conduct
of the plaintiff
[51]
The plaintiff argues that this court cannot on the probabilities find
that the telephone call did in fact transpire between
Dixon and
Steyn, if one looks at Steyn's previous conduct in handling a release
all but a year before this alleged incident. In
addition, Steyn had
on the very same day transmitted the request to the manager who was
in charge of that specific department as
he had been moved from that
specific department some three months prior. Plaintiff also argued
that the process of establishing
whether one held a suretyship was an
easy task.
[52]
From the outset, according to Steyn's testimony the process referred
to above was not a simple one that is obtaining the suretyship
and
attaining the release. He confessed that it was not an easy task and
explained it at length. In my view, the fact that Steyn
was no longer
in that specific department was a fact not known to the second
defendant, as they sent the request to the person
at BMW whom they
knew was the responsible for their account. Turning to Steyn's work
ethos and his effectiveness of handling a
release, as he had already
conducted one for the defendant prior, no reliance can be placed on
this as the plaintiff seeks to do,
for he was no longer in that
specific department. Thus what he would have done, in my view, is of
no consequence, as it lies with
what Humphries would have done in the
circumstances.
[53]
Turning to Humphries, to me the plaintiff had to show what she did
with the request when she received same, in order to suppress
the
contention by the second defendant that they did nothing. However,
the plaintiff saw fit not to call Humphries to testify.
In the light
of Steyn's testimony that he and Humphries were consulted with way
back in 2011, the plaintiff was the only one who
knew the import of
her evidence in relation to the case they had to meet. Coupled with
the fact that Steyn testified that he did
not at any stage, then or
now, enquire from Humphries what she had done with the instruction he
had passed on to her. Clearly the
plaintiff had the onus to bring
this evidence to the fore, as it tried to do by way of Steyn's
testimony.
[54]
The assertion of the plaintiff, that the defendant could have called
Humphries if they so wished, is in my mind, in these circumstances,
preposterous, as according to the second defendant they only became
aware of Humphries a week before the trial commenced. Bearing
in mind
that Humphries now resides in Germany.
[55]
The question needs to be asked, why the plaintiff has not advanced
Humphries' explanation as regards what she in fact did after
she
obtained the request from Steyn. In my view, the plaintiff is the
only one who is able to furnish the chain of evidence demonstrating
that they had or had not complied with their obligation to act on the
query made. The duty to call Humphries in these circumstances
fell in
BMW's lap and having failed to demonstrate what transpired after the
query was received only leads me to drawing a negative
inference. See
Brand v Minister of Justice
1959 (4) SA 712
(A) 715F-716F;
Raliphaswa v Mugivhi and others
[2008] ZASCA 17
;
2008 (4) SA 154
(SCA) at para[15]
on 157I-158A
Snyders AJA states the following:
"When
a witness is equally available to both parties, but not called to
give evidence, it is logically possible to draw an
adverse inference
against both.
1
The party on whom the onus rests has
no greater obligation to call a witness, but may find that a failure
to call a witness creates
the risk of the onus proving decisive.
2
In the present matter the appellant did not have an opportunity equal
to the respondents to call this witness. The adverse inference
drawn
by the trial court against the appellant was unjustified in the
circumstances. An adverse inference in any event does not
operate to
destroy a case otherwise proved, which is what the appellant managed
to do.
3
.
[56]
Therefore in my view the second defendant clearly did not have an
equal opportunity as opposed to the plaintiff to call Humphries
to
testify in this instances. I am fortified in my view that the adverse
inference I have drawn against the plaintiff for failing
to do so is
justified.
Conclusion
of estoppel
[57]
In conclusion, the objective evidence, documentary evidence and the
testimony of the witness's reinforces my view that in weighing
up the
evidence before me these point to the probabilities favouring the
second defendant.
[58]
That the telephone conversation did take place, the representation
was made by Steyn, Dixon conveyed this representation to
Tabata who
had no reason to disbelieve it as he was not certain which
suretyships he had signed and he was misled by the representation
which he acted upon to his detriment.
[59]
I do not view it necessary to deal with the alternative arguments
raised by the second defendant.
TACIT
TERM
[60]
The second defendant amended its prayer to its plea to read as
follows:
"Wherefore
the Second Defendant prays that the Plaintiff's claim against him be
dismissed with costs, alternatively, that the
Plaintiff be directed
to furnish the second defendant with a written release from the
suretyship relied upon by the Plaintiff herein,
such release to be
effective from the 31st May 2007."
[61]
Adv. Morison SC argued that the testimony of Steyn, the fact that the
releases were granted by Standard Bank and Wesbank and
the conduct of
the parties, inclusive of the plaintiffs, after the grant of these
releases demonstrates that the release would
have inevitably been
granted by BMW. Thus the tacit term contended for by Tabata would be
fulfilled as it is necessary to give
business efficiency to the
suretyship and must be found to be in the suretyship.
[62]
Adv. Beckers on the other hand argues that the tacit term contended
for by Tabata was not pleaded and does not and cannot arise
from the
language of the suretyship. The argument goes further; that what was
in fact pleaded by Tabata does not give rise to that
pleaded. In
addition, in Tabata's testimony, he conceded that
'The
requirements may be far more than just an additional deed of
suretyship, the creator will determine that. And you've said so
long
as it's reasonable,'
[63]
In determining whether the tacit term contended for should be imputed
in the suretyship I am mindful of the dicta in
City of Cape Town
(CMG Administration) v Bourbon-Leftley
&
another NNO 2006
(3) 488 (SCA) at para [19] &[20].
The circumstances in this
matter on an examination of the suretyship, the conduct of both BMW
and Tabata in concluding the suretyship
and their conduct thereafter
leaves me with no doubt that BMW would have made demands for other
requirements to be fulfilled before
the grant of the release sought
by Tabata, which he rightly, in my view, acknowledged in his
testimony. This would not have been
peculiar, as this is exactly what
both Standard Bank and Wesbank, did prior to granting their releases.
[64]
Another factor is that Tabata signed the suretyship with the terms it
encompassed and did not adduce any evidence that he was
not happy to
do so or there had been any attempt to change and or add other terms
to the plaintiff's so called
'standard form of contract which were
not subject to negotiations' .
[65]
I also have a problem with Tabata's submission as to when the tacit
term would have come into existence. The case of Tabata
is that as
there was no suretyship with BMW he and Dixon continued with the
finalisation of the contract for the sale of the share.
This,
according to the testimony of both Dixon and Tabata, was done with
the exclusion of BMW. BMW was only aware of a conditional
contract
and not aware of the various addendums which ultimately culminated in
the conclusion of the contract. For all intensive
purpose BMW knew
the contract could or could not have materialised taken into account
the conditional clauses in the contract.
[66]
In my view the tacit term sought to be relied upon in this case is
one where BMW would have had to first go to its various
departments
to discuss and consider before acceding to importation of the term.
[67]
I am therefore not convinced that the tacit term sought to be
imported is justified in these circumstances.
[68]
The second defendant succeeds on a balance of probabilities with the
requirements of his reliance on the estoppel defence raised
and
therefore would be entitle to his costs as the victor. The parties
agreed that the case of the third defendant be postponed
and an order
was duly granted by consent.
[69]
Consequently the following order is made:
[1]
The plaintiff’s, BMW, claim against the second defendant,
Dumisani Tabata, is dismissed with costs, such costs to include
the
employment of senior counsel.
_____________________________
W.
Hughes Judge of the High Court,
Gauteng Pretoria
Appearances:
For
the Plaintiff: Adv Beckers
Instructed
by: Smit Jones & Pratt
For
the Defendant: Adv Morison SC
: E Ferreira
Instructed
by: Ramsay Webber
Date
heard: 11 May 2016
Date
delivered: 24 February 2017