About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: North Gauteng High Court, Pretoria
SAFLII
>>
Databases
>>
South Africa: North Gauteng High Court, Pretoria
>>
2015
>>
[2015] ZAGPPHC 375
|
|
Forest Sales (Pty) Ltd v Belgium Import And Export CC t/a Dakke and Others (7988/2009) [2015] ZAGPPHC 375 (22 May 2015)
IN THE GAUTENG DIVISION HIGH COURT, PRETORIA
(REPUBLIC OF SOUTH AFRICA)
Case Number: 7988/2009
DATE: 22 MAY 2015
In the
matter between:
FOREST SALES (PTY)
LTD
..............................................................................................
PLAINTIFF
A
nd
BELGIUM IMPORT AND EXPORT CC t/a
MAKATI DAKKE
...................
FIRST
DEFENDANT
DANNY LAMBERTUS
NIJS
.........................................................................
SECOND
DEFENDANT
CORNELIUS ANDRIES
BURGER
..................................................................
THIRD
DEFENDANT
JUDGMENT
MOLEFE
J
[1]
The plaintiff claimed from the
defendants, jointly and severally, the one paying the other to be
absolved:
1.1
Payment in the sum of R578 036, 80;
1.2
Interest on the aforesaid sum at the
rate of 15,5% a temporae morae to date of final payment;
1.3
Costs on party and party scale;
1.4
Further and/or alternative relief.
[2]
The claim is based on a credit facility
agreement between the plaintiff and the first defendant and the
suretyship agreement (“guarantee”)
between the plaintiff
and the second and third defendants as sureties and co-principal
debtors to the first defendant’s indebtedness
to the plaintiff.
The first defendant was liquidated during December 2008 and the third
defendant was sequestrated. The claim is
now only against the second
defendant.
Background and common cause facts
[3]
On 10 April 2008, the plaintiff and
first defendant duly represented by the second and third defendants
entered into a credit facilities
agreement (Annexure ‘A’).
The second and third defendants bound themselves as sureties and
co-principal debtors in
solidium to the plaintiff for the payment on
demand of all sums of money which the first defendant may from time
to time owe or
be indebted to the plaintiff in a deed of suretyship
titled “Guarantee” (Annexure ‘B’).
[4]
Pursuant to the aforesaid agreements,
the plaintiff sold and delivered goods to the first defendant at the
first defendant’s
special instance and request during the
period April 2008 to November 2008 for the sum of R578 036, 80. The
plaintiff alleges that
the amount is due, owing and payable by the
second defendant as surety.
[5]
The defence raised by the second
defendant in his plea is that he was not aware that he was signing a
suretyship and had he been
aware, he would not have signed same. The
second defendant contends that Annexure “B” does not
constitute a deed of
surety.
It
is also denied by the second defendant that plaintiff is a registered
credit provider.
[6]
The duty to begin was imposed upon the
plaintiff by agreement between the parties and the plaintiff reduced
the capital amount claimed
by R205 548, 60 to R326 671, 69.
The
plaintiff called two witnesses and the second defendant called one
witness.
[7]
Mr Richard Bruce Todd testified that he
is a member of the plaintiff and have personal knowledge of this
claim as his job is in
sales and accounts. The plaintiff is a timber
agent, sourcing timber and selling it. On 10 April 2008 he went to
see the third
defendant, Mr Cornelius Burger in Brits for the signing
of the credit facility and suretyship agreement. They both went to
second
defendant’s farm where he had an office adjoining the
house. Although he knew Mr Burger, it was the first time he met the
second defendant. Both Mr Burger and the second defendant signed the
documents in his presence. The credit facility was approved.
[8]
The process followed for a consignment
to be delivered to the first defendant was that a request was made by
the third defendant
and Mr Todd would source the supply, and give the
prices of the required timber to the third defendant. He would then
place an
order and the timber would be delivered to the first
defendant with a delivery note and an invoice would then be send to
the first
defendant for payment.
[9]
Under cross-examination, Mr Todd
testified that he was not involved in the physical delivery of the
timber and had no personal knowledge
of the signatories of the
delivery notes.
[10]
Mr Neil Grant Todd testified that he was
a co-member of the plaintiff and was in charge of the administration
and acted as the plaintiff’s
secretary and public officer.
After the issue of summons, the parties entered into a settlement
agreement and the defendant undertook
to make monthly payments of
R100 000, 00 towards the debt
[1]
.
The
defendants never contested the outstanding amount nor that the goods
were delivered. The initial credit limit was set at R200
000,00 but
the credit was extended to almost R600 000, 00 at the 1
st
defendant’s request, duly represented by the third defendant as
they required more timber.
Mr
Neil Todd confirmed that he signed the certificate of indebtedness
dated 15 April 201 5
[2]
and certified that the outstanding balance due is R326 671, 69, made
up of the capital amount of R205 548, 00 and interest charges
up to
and including February 2015 in the amount of R121 123, 09.
[11]
The second defendant, Mr Danny Lambertus
Nijs, in his evidence, conceded that he signed both the credit
application forms and the
guarantee on 10 April 2008. The documents
were given to him by Mr Burger who only informed him that they were
applying for credit.
He never read the documents and the guarantee
was not presented to him as a single document. He was not aware that
he was signing
a suretyship agreement and contended that a suretyship
agreement is normally signed after the credit application has been
approved.
He testified that had he known that the guarantee was a
suretyship he would not have signed it or would have considered
signing
a limited suretyship. He denied that Mr Todd came to his farm
nor that he (Mr Todd) was present when the documents were signed.
[12]
Under cross-examination, Mr Nijs
admitted that he made a mistake by not reading the documents before
signing. He conceded that although
the suretyship agreement is titled
“guarantee”, it is a suretyship agreement. He denied that
a reasonable person in
his position as a director of a number of
companies should have read the documents before signing.
[13]
I would first like to deal with the
issue of the registration of the plaintiff as a credit provider in
terms of the National Credit
act No 34 of 2005 (“the Act”).
Section
40(1) of the Act provides that:
“(a)
A person must apply to be registered as a credit provider if-
a)
that person, alone or in conjunction
with any associated person, is the credit provider under at least 100
credit agreements, other
than incidental credit agreements; or
b)
the total principal debt owed to that
credit provider under all outstanding credit agreements, other than
incidental credit agreements,
exceeds the threshold prescribed in
terms of section 42(1)”.
A
credit agreement entered into by a credit provider who is required to
be registered, but who is not so registered, must not offer,
make
available or extend credit, or enter into a credit agreement,
otherwise the credit agreement is unlawful and void.
[14]
In casu, the credit application
reflected the estimated monthly purchases by the first defendant as
R500 000 and the maximum credit
limit required at R1 000 000. There
was no other evidence before the court that the principal debts owed
to the plaintiff exceeded
the prescribed threshold. In my view
therefore, a case has not been made out that the plaintiff was
required to register as a credit
provider in terms of the Act.
[15]
Plaintiff’s counsel
[3]
submitted that although the Annexure “B” is titled
“guarantee”, the second defendant in his evidence
confirmed
that it was a suretyship agreement and that the signatures
on the document are his and the second defendant is therefore bound
by the suretyship agreement. In this regard counsel for the plaintiff
relied on Slipman 777 (Pty) Ltd v Du Toit
2011 (4) SA p72
SCA (par 9-
12) wherein Malan JA held:
“A
person who is induced to sign a suretyship agreement by the fraud or
misrepresentation of a third party and who is unaware
of the nature
of the document he is signing, will nevertheless be bound by the
agreement if the lender is innocent and unaware
of the mistake. The
lender would in such a case be entitled to rely on the appearance of
liability created by the surety’s
signature, and the surety
would not be entitled to set up his unilateral mistake to escape
liability under the agreement”.
Plaintiff’s
counsel referred the court to Brink v Humphries Jewell
2005 (2) SA
419
SCA
wherein the court held at 424 E-F that “the appellant’s
error appeared to have been justus in that the form itself
was a trap
for the unwary and the appellant was justifiably misled by it”.
[16]
Counsel for the second
defendant
[4]
submitted
that the second defendant’s version that there was a justified
error on his part should be accepted. It was contended
on the second
defendant’s behalf that he was not alerted that he was signing
a suretyship agreement and should therefore
be excused. Counsel
relied on Tesoriero v Bhyjo Investments Share Block (Pty) Ltd
2000
(1) SA 167
(W) 175 (F) - wherein it was held that it is a justified
error if it is shown that where a person who signed as surety was
misled
as to the nature or contents of the document by the other
contracting party.
[17]
At common law no formalities were
required for the formation of a valid contract of suretyship, but
with the enactment of the General
Law Amendment Act of 1956
s
,
no contract of suretyship entered into after 22 June 1956 is valid
unless the terms thereof are embodied in a written document
signed
by, or on behalf of the surety. The ‘terms’ referred to
include the terms that identify the creditor, the surety
and the
principal debtor, and those that establish the nature and amount of
the principal debt, and probably also the incidentalia,
or additional
terms agreed by the parties
[5]
.
It
is my view that Annexure ‘B’ does not fall foul of
section 6 of the General Law Amendment Act. The second defendant
confirmed that he signed the suretyship agreement. The only conflict
in the evidence of the plaintiff and the second defendant
is whether
the plaintiff was present or not when the documents were signed,
which is not a relevant nor material contradiction
as it is not
disputed that the second defendant signed the documents.
In
fact, the defendant’s version confirms that if there was any
misrepresentation, it was not by the lender/plaintiff.
[18]
It is common cause that the onus is on
the second defendant to prove that there was a justus error in his
part. Annexure “B"
is headed “GUARANTEE” and
the suretyship obligation is to be found in clause 1 thereof:
“1.1/We,
the undersigned, DANNY LAMBERT NIJS ID No: 671014 5081 087, CORNELIUS
ANDRIES BURGER ID No: 711011 5243 081 of BELGIUM
IMPORT AND EXPORT CC
t\a MAKATI DAKKE Company Registration No: 2003/018/36/23 do hereby
bind myself/ourselves jointly and severally
as surety/ies and
co-principal debtors ‘in solidium’ to FOREST SALES CLOSE
CORPORATION (hereinafter referred to as
“the Creditor”)
for the payment on demand of all sums of money which BELGIUM IMPORT
AND EXPORT CC Reg No: 2003/018136/23
(hereinafter referred to as “the
Debtor/s”) may now and from, time to time hereafter owe or be
indebted to the creditor
and its successors and assigns from
whatsoever cause arising, whether such indebtedness be incurred by
the Debtor/s solely or jointly
or in partnership with any other
person or persons, company or companies”.
[19]
In my view, this surety clause was not
hidden in fine print. A number of reported cases have dealt with
problems which arise when
a credit application form has embodied a
personal suretyship by individuals who signed the form on behalf of
the applicant. That
is not what happened in the present case.
Requirement of personal surety when granting credit to small
companies is a prevalent
practice. A
reasonable
businessman, like the second defendant in casu, could not have
expected credit to be granted to his company without some
form of
security.
[20]
I am of the view that in casu, the
plaintiff effectively guarded against the possibility that the
suretyship would be overlooked
amongst the other clauses of the
credit application by heading the front page of Annexure “B”
“GUARANTEE”
in bold, so as to draw the attention of the
signatory to it before he signed. The suretyship section hardly
skulks away furtively.
It is not hidden in fine print. The Annexure
“B” document cannot be said to give rise to an obligation
on the part
of the plaintiff to take further steps to guard against
the signatories overlooking the presence of the suretyship clause in
it.
[21]
In
Langeveld v Union Finance
Holdings (Pty) Ltd
2007 (4) SA 572
W 576
A-C
it was held that:
“there
was a strong praesumptio hominis that anyone who had signed a
document, had the animus to enter into the transaction,
and this
person was burdened with the onus of convincing the court that he or
she had not in fact entered the transaction by virtue
of the maxim
caveat subscriptor. This applied to suretyships”.
[22]
While courts should come to the rescue
of parties who have been misled, they should be mindful of what was
stated in National and
Overseas Distributors Corporation (Pty) Ltd v
Potato Board
1958 (2) SA 473
A at 479 G-H.
“Our
law allows a party to set up his own mistake in certain circumstances
in order to escape liability under a contract into
which he has
entered. But where the other party has not made any misrepresentation
and has not
appreciated at the time of the acceptance that
his offer was being accepted under a misapprehension, the scope for a
defence of
unilateral mistake is very narrow, if it exists at all. At
least the mistake (error) would have to be reasonable (justus) and it
would have to be pleaded”.
The
second defendant’s version is that he was misled by his own
partner (comember) to sign a suretyship agreement and
certainly
not by the plaintiff. There is therefore no basis in the evidence for
a contention that the mistake was reasonable nor
that the
misrepresentation, if any, was made by the plaintiff.
[23]
I am satisfied that the second defendant
has failed to discharge the onus of proving that he was unaware that
he was signing an
undertaking as a surety and may not escape
liability. The second defendant cannot escape liability on the ground
of a justified
error, as he was not misled by some act or omission of
the other contracting party.
Costs
[24]
The plaintiff’s counsel submitted
that a punitive costs order on an attorney- and-client scale should
be imposed on the second
defendant as it was evident from the
cross-examination of plaintiffs first witness that the second
defendant had no defence. An
award of attorney-and-client costs will
not be granted lightly as the court looks upon such orders with
disfavor and is loath to
penalize a person who has exercised a right
to obtain a judicial decision on any complaint. I have considered the
circumstances
in this case and I am of the view that the defendant
exercised his right to obtain a judicial decision on his defence and
a punitive
costs order would be inappropriate.
[25]
In the circumstances, the following
order is made against the second defendant:
24.1
Payment of R326 671, 69;
24.2
Interest thereon at the rate of 15,5%
per annum a temporae morae to date of payment;
24.3
Costs on a party and party scale.
D S MOLEFE JUDGE OF THE HIGH COURT
APPEARANCES:
Counsel on behalf of Plaintiff Adv. B
Hitchings
Instructed by Breytenbach Mostert
Skosana Inc.
Counsel on behalf of Defendant Adv. J
Moller
Instructed by Van Rensburg Attorneys
Date Heard 29 April 2015
Date Delivered 22 May
2015
5
Act 50
of 1956 as amended by Act 80 of 1964 Section 34
[1]
Bundle page 46, letter dated 24 February 2009
[2]
Bundle page 47, letter dated 15 April 2008
[3]
Advocate B Hitchings
[4]
Advocate J Moller
[5]
Lotz (Henning) 'Suretyship' LAWSA First Re-issue vol 26 at 195