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[2015] ZAGPPHC 332
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Mega Freight Services (Pty) Ltd v Lombard Insurance Company Ltd and Another (82743/2014) [2015] ZAGPPHC 332 (23 March 2015)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
CASE
NUMBER: 82743/2014
DATE:
23 March 2015
Not
reportable
Not
of interest to other judges
In
the matter between:
MEGA
FREIGHT SERVICES (PTY)
LTD
.....................................................................
APPLICANT
and
LOMBARD
INSURANCE COMPANY
LTD
.................................................
FIRST
RESPONDENT
TRANSNET
PORT
TERMINALS
..............................................................
SECOND
RESPONDENT
JUDGMENT
TLHAPI
J
[1]
This application was brought by way of urgency for the following
relief:
“
THAT
a
rule nisi
be
issued calling upon the respondents to show cause, if any, on or
before the 9
th
day of December 2014 at 10h00 or so soon as counsel may be heard why
an order should not be granted in the following terms:
(a)
That the first respondent be interdicted and restrained from making
payment to the second respondent under Guarantee No. S48924;
(b)
That in the event of the matter being opposed by either of the
respondents those respondents opposing the application are directed
to pay costs of the applicant jointly and severally;
(c)
Further and/or alternative relief;
3.
That
paragraph 2(a) shall operate as an interim interdict with immediate
effect; “
The
application was opposed by the second respondent. After hearing
argument on behalf of both parties an order as formulated
on
behalf of the applicant was made on 5 December 2014:
“
1.
First Respondent is
interdicted and restrained in making payments to the second
respondents under guarantee number S48924 in respect
of any claim
arising from tariff annexure agreement concluded on 2 December 2013
and 3 December 2013 between Megafreight Services
(Pty) Ltd as agent
for Anelin-Bay Enterprises (Pty) Limited trading as African Star
Mineral and Transnet Port Terminals, a division
of Transnet SOC
Limited”,
and
I
ordered further,
2.
That second Respondent is ordered to pay costs of the applicant
including costs of senior counsel.
The
order given was such that it protected the interests of the parties
to the Deed of Suretyship and only interdicted the first
respondent
from honouring payment in respect of indebtedness arising out of the
Tariff Annexure Agreement.
My
reasons now follow:
BACKGROUND
[2]
The applicant conducts business as an ‘international freight
forwarder’ and the second respondent conducts business
nationally from all sea ports in South Africa. The applicant operates
a number of credit facilities with the second respondent,
which
facilities enable ‘
applicant
to conduct its business and vary depending on the requirement of the
transaction’
.
Account 12554 was in respect of ‘ applicant’s operation
at the Richards Bay Port’ which was secured with
the first
respondent to a maximum of R590 000.00. The said account had
prior to July 2013 enjoyed a credit limit with the
second respondent
of R920 000.00.
[3]
The applicant secured as agent, a bulk coal export contract for its
principal Anelin-Bay Enterprises (Pty) Limited, trading
as African
Star Minerals (‘Applicant’s Principal). The exports were
to be effected through the Richards Bay Port Terminal.
The
second respondent required that:
(a)
The applicant increase
its credit facility with the second respondent which had to be
secured by way of suretyship, which was provided
by the first
respondent. The guarantee called for to secure the credit facility
was in the amount of R8 862 000.00. A
guarantee was
consequently issued by the first respondent in favour of the second
respondent in that amount.
(b)
A Tariff Annexure
Agreement ( the ‘TAA’) had to be concluded between
the second respondent and applicant’s
principal.
[4]
On 16 July 2013 the applicant sent a letter to the second respondent
seeking an increase in its credit limit for account 12554.
The
suretyship for the account though headed “Guarantee No.S48924”
was issued on 6 November 2013. The Tariff Annexure
Agreement in
respect of (b) between the second respondent and applicant’s
principal was concluded December 2013.
[5]
The applicant also annexed the first draft of the TAA which had a
clause 11.4asking for a guarantee equivalent to the same amount
as
stated in the guarantee issued on 6 November 2013 headed No.S48924.
Clause 11.4 was excluded from the TAA finally concluded
on 2 and 3
December 2013. The applicant averred that suretyship was for the
applicants credit facility on account 12554 and not
meant to secure
the indebtedness of the applicant’s principal out of the TAA.
[6]
Applicant’s Principal had been in breach of its agreement with
the second respondent in relation to the minimum quantities
of coal
to be exported per annum and, on 15 May 2014 the second respondent
contended that applicant was indebted to it in the amount
of
R14 520 000 in respect of the penalties as per the TAA. The
applicant contended that in the TAA it was described
as an
agent for a disclosed principal/customer and that it was not the
customer. Negotiations to resolve the problem failed and
the second
respondent, having frozen applicant’s credit facilities and in
order to reactivate such credit facility, the applicant
was
forced to pay the sum of R7 782 007.84, which it intends
reclaiming from the second respondent.
[7]
On 12 November 2014 the second respondent indicated its intention to
call up the guarantee with the first respondent. The applicant
contended that the second respondent was not entitled to call up the
guarantee.
[8]
The second respondent first raised certain points
in
limine
to the
application;
(a)
That the application
was not urgent;
(b)
That the North Gauteng
High Court lacked jurisdiction to hear the matter;
(c)
That the North Gauteng
High Court lacked jurisdiction to entertain a maritime claim;
(d)
That there had been a
material Non-Joinder of applicant’s principal.
[9]
The second respondent averred that the guarantee of the 6 November
2013 was specifically provided to secure the shortfalls under
the TAA
concluded on 2 December 2013 and that the applicant had failed to
make out a case in its founding affidavit that the guarantee
served
to give security for other business of the applicant.
[10]
Correspondence exchanged between Paul Munn, deponent to the founding
affidavit and one Amanda Mfeke of the second respondent
were annexed
to the answering affidavit and, second respondent contended that it
was clear from these exchanges that the applicant
had put up the
guarantee in terms of the first draft TAA and that it was for this
reason that clause 11.4 was excluded from the
TAA signed on on 2 and
3 December 2013. It contended further that the applicant had put up
the guarantee for this purpose and,
the second respondent was
caused to contract with applicant’s principal based on such
guarantee. The applicant was
consequently estopped from denying
liability under the suretyship. The second respondent contended that
it was recognized practice
for the agent to put up security for the
customer and the applicant had acknowledged its indebtedness in this
regard and had made
payment.
THE
ISSUES
[11]
The issues here are whether the guarantee issued by the first
respondent wasmeant to secure only the increased credit facility
of
the business of the applicant at the Richards Bay Port or
whether it was mainly put up to secure the indebtedness of
applicant’s principal, under the TAA signed on 4 December 2014
or both.
THE
POINTS
IN LIMINE
[12]
I have considered both counsels submissions and argument and thus
find:
Urgency
:
The urgency arose when the second respondent persisted in seeking
payment under the suretyship for the indebtedness of the applicant’s
principal, despite protestations by the applicant, and according to
it, there being no other remedy available to it and being at
risk of
shouldering a liability that was not attributable to it, I was
satisfied that a case had been made out for urgency
Lack
of jurisdiction
:
I am in agreement with Mr Maritz that there was no
‘
factual
allegation in the affidavits on the basis on which the court could
find that
there
Deed of Suretyship was given as a guarantee for ‘maritime
services’
Is
it a maritime claim
:
This also ties in with above point on lack of jurisdiction. The
determining factor is whether the guarantee was given in respect
of
the TAA, and I shall touch on this issue below.
Non-joinder
:
The determining factor is whether the Deed of Suretyship not only
covered the applicants increased credit facility but was
also meant
to secure the indebtedness of the applicant’s principal under
the TAA. If answered in the negative then it is
not necessary to join
the principal and this shall be dealt with below
THE
SURETYSHIP
[13]
Mr Maritz for the applicant submitted that a valid contract of
suretyship had to comply with section 6 of the General
Law
Amendment Act of 1956, which required that it be in writing and
‘
signed by or on behalf of the surety’
and that in
addition to the identification of
the ‘surety ( first
respondent) , creditor (second respondent) and debtor ( the
principal debtor), there had to
exist a valid principal
debt
between the debtor and the creditor’.
The
suretyship did not incorporate the TAA as an annexure or it did not
form part of the suretyship. Introduction of any evidence
relating to
‘
negotiations
and consensus between the parties which seeks either to add to or
contradict the express terms of the Deed of Suretyship’
was inadmissible,
Sapirsten
vs Anglo African Shipping Co (SA) Limited
1978
(4) SA 1(A).
He went on to submit that the principal debt identified
in the suretyship was one
“
arising
out of a credit account agreement entered into between the debtor and
Transnet and to which this guarantee becomes an annexure”
.
[14]
Mr Pillay for the second respondent submitted that it had always been
thestance of the second respondent that the guarantee
was put up to
secure
‘
indebtedness
for volume shortfalls’’
.
There was no dispute of fact, the second respondent had not only
confirmed that the guarantee related to the credit facility,
it
also contended that the guarantee requested under clause 11.4 of the
draft TAA was intended to secure the indebtedness
of the principal
agent and, that this position was evidenced in emails from the
applicant dated 20 November 2014 and 27 November
2013 (‘RA1’
and ‘RA2’). Furthermore, in this instance the applicant
did not deny that the guarantee was
put up to secure the principal
debt under the TAA and, that it was common trade practice for the
agent to put up such security,
Easigas
(Pty) Ltd v Solgas (Pty) Ltd,
2009
(4) SA 37
(W).
[15]
The facts in Easigas
supra
were
distinguishable in that there the issue was about unlawful trade and
competition, where the court had to determine the meaning
of trade
usage in the gas and gas cylinder trade. In Sapirsten
supra
the court had to determine what extrinsic evidence could be used to
prove terms of a suretyship.Trengove AJA at 12 C-D said:
“
.....there
can be no objection to extrinsic evidence of identification being
given, either by the parties themselves, or by anyone
else, unless
the leading of such evidence can be said to amount to an attempt to
supplement the terms of the written contract”
In
light of the above, I am in agreement with the submission by Mr
Maritz that the guarantee can only serve as security for the
TAA if
it has been incorporated in the Deed of Suretyship. The credit
account agreement was therefore in respect of account number
12554
for which an increased credit facility was applied for by the
applicant.
[16]
While the second respondents conceded that the agent was not liable
for the indebtedness of a disclosed principal, it cannot
be that it
again wants to say that in this instance, and in as far as the TAA
was concerned, the applicant was also
the customer. In my
view in order to claim entitlement in the guarantee the second
respondent had to prove that the guarantee itself
related to the TAA
and to the applicant as principal debtor under the TAA and
suretyship and that the TAA was an annexure
to the guarantee or
incorporated therein.
[17]
Mr Maritz argued that unless the second respondent sought to rectify
the Deed of Suretyship on grounds that there was a common
error
between ‘
the
applicant, the first respondent, the second respondent as to the
principal debt and the identity of the principal debtor....any
evidence at variance with the express terms of the Deed of Suretyship
is inadmissible’,
I
agree. In my view there is therefore nomerit in the points
in
limine
relating to the claim as being a maritime one and on the non-joinder
issue.
[18]
I gathered from the answering affidavit and from the argument by Mr
Pillay that the second respondent persists to hold applicant
liable
under the guarantee despite the legal position advanced. I am
therefore satisfied that there was no other remedy available
the
applicant and that it had made out a case interdicting and
restraining the first respondent from making payment to the second
respondent in respect of indebtedness arising out of the TAA.
____________
TLHAPI
V V
(JUDGE
OF THE HIGH COURT)
MATTER
HEARD ON : 5 DECEMBER 2014
JUDGMENT
RESERVED ON : 5 DECEMBER 2014
ATTORNEYS
FOR THE APPLICANT : SHEPSTONE & WYLIE ATT
c/o
MARITS SMITH VAN EEDEN