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[2013] ZAKZDHC 64
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Tradequick 74 CC t/a East Coast Mvelo Air v Gearwise Properties CC and Another (2614/2013) [2013] ZAKZDHC 64 (14 November 2013)
IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
LOCAL DIVISION, DURBAN
CASE NO: 2614/2013
In the matter between:
TRADEQUICK 74 CC t/a
EAST COAST MVELO AIR
....................................
Applicant
and
GEARWISE PROPERTIES CC
...........................................................
First
Respondent
HARESH OUDERAJH
...................................................................
Second
Respondent
----------------------------------------------------------------------------------------------------------------
Order:
(a) Judgment is granted
against the first and second respondents, jointly and severally,for
payment of the sum of R1 379 034
together with interest thereon
at the rate of 15,5% per annum from 10November 2012 to the date of
payment.
(b) The respondents are
ordered,jointly and severally, to pay the costs of the application.
___________________________________________________________________
JUDGMENT
Delivered
on:14 November 2013
PLOOS VAN AMSTEL J
[1] This is an
application for judgment pursuant to a written settlement
agreementand a suretyship. The settlement agreement records
that the
applicant had launched an application for the winding up of the first
respondent, that the parties had agreed to settle
the dispute between
them and that the debt owing by the first respondent to the applicant
in the agreed sum of R5 224034.94
would be settled as recorded
therein.
[2] The agreement
provides for the transfer to the applicant of six sectional title
units, which would reduce the debt by an amount
of R2 799500,
payment to the applicant of the sum of R500 000 from the proceeds of
the sale of a property owned by the first
respondent, and 19 monthly
instalments of R100 000 each. Clause 8.1provides that in the
event of any one payment not being
made on due date the balance then
outstanding would become due and payable immediately.
[3] The second
respondent, who signed the settlement agreement on behalf of the
first respondent, bound himself in terms of the
agreement as surety
and co-principal debtor
in solidum
with the first respondent
for the due and proper fulfilment by it of all the terms and
conditions of the agreement.
[4] The sectional title
units were transferred to the applicant and the sum of R500 000
was paid to it. The first four post-dated
cheques where duly honoured
but a cheque dated 10 November 2012 was dishonoured, as was the next
one, dated 10 December 2012. Thereafter,
during December 2012, the
second respondent made a cash payment of R100 000 into the
applicant’s bank account, which
left the first respondent in
arrears by R100 000.In early January 2013the second
respondentcontacted Mr Mallet, who deposed
to the applicant’s
founding affidavit, and asked him not to deposit the cheque which was
dated 10 January 2013. He said he
would make a cash payment of
R50 000, which he did.
[5] It is the applicant’s
case that in consequence of the failure to pay the November
instalment when it was due the full
outstanding balance became dueand
payable immediately. The balance claimed by the applicant is the sum
of R1 379 034.
It contends that
mora
interest should
run from 10 November 2012, which was the date on which the first
cheque was dishonoured.
[6] The respondents
raised a number of defences. The first was a challenge to Mr Mallet’s
authority to represent the applicant
in the bringing of the
application and to depose to the founding affidavit.
[7] Mr Mallet said in the
founding affidavit that he is the sole member of the applicant and
duly authorised to depose to the affidavit
on its behalf. This is
disputed in the respondents’ answering affidavit on the basis
that the deponent had no knowledge of
this. At the commencement of
the hearing Mr Potgieter SC, for the respondents, made an application
for a supplementary affidavit
by the second respondent to be handed
in. This was opposed by Ms Mills for the applicant, on the basis that
the affidavit was tendered
at a late stage and that the contents
thereof were in any event irrelevant. In the supplementary affidavit
the second respondent
says that it came to his knowledge `during or
about 23 October 2013’ that Mr Mallet is not a member of the
applicant close
corporation. He sayshe caused a close corporation
search to be done on 24 October 2013(which was the day before the
hearing) and
established that the sole member of the applicant is the
Mallet Family Trust, of which Mr Mallet and Yvonne Mallet are
co-trustees.
[8] There was no
explanation as to why the close corporation search was only done on
the day before the hearing. There is also no
evidence in the
affidavit to suggest that the applicant’s attorneys did not
have the required authority to launch the application.
It mayof
course be said that it could not be expected of the respondents to
put up such evidence as it is not within their knowledge.
Uniform
Rule 7(1) however provides the remedy. In terms of the rule the
authority of anyone acting on behalf of a party may be
disputed,
whereafter such person may no longer act unless he satisfies the
court that he is authorised so to act.
In Ganes and Another v
Telecom Namibia Ltd
2004(3) SA 615 (SCA) Streicher JA said at
624:
`
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 on behalf of the respondent.’
In Eskom v Soweto City
Council
1992(2) SA 703 (WLD) Flemming DJP
said at 705:
`The
developed view, adopted in Court Rule 7(1), is that the risk is
adequately managed on a different level. If an attorney is
authorised
to bring the application on behalf of the applicant, the application
necessarily is that of the applicant. There is
no need that any other
person, whether he be a witness or someone who becomes involved,
especially in the context of authority,
should additionally be
authorised. It is therefore sufficient to know whether or not the
attorney acts with authority. As to when
and how the attorney’s
authority should be proved, the rule-maker made a policy decision.
Perhaps because the risk is minimal
that an attorney will act for a
person without authority to do so, proof is dispensed with except
only if the other party challenges
the authority. See Rule 7(1).
Courts should honour that approach. Properly applied, that should
lead to the elimination of the
many pages of resolutions, delegations
and substitutions still attached to applications by some litigants,
especially certain financial
institutions’.
[9] As appears from the
notice of motion the application was brought by a firm of attorneys
in Durban, purporting to act on behalf
of the applicant. The
respondents did not challenge the attorneys’ authority in terms
of rule7(1), with the result that their
authority to bring the
application is not in issue. The deponent to the founding affidavit
is a witness, who does not need to be
authorised to give evidence. I
accordingly refused leave for the supplementary affidavit to be
received, firstly because it was
tendered so late, without any
explanation, and secondlybecause its contents appeared to me to be
irrelevant. If the respondents
wanted to challenge the authority of
the attorneys they should have employed the provisions of rule7(1).
[10] Mr Potgieter’snext
point was that the applicant is precluded from recovering the balance
owing in terms of the settlement
agreement as a result of its failure
to pay the levies in respect of the sectional title units referred to
in clause 2 of the agreement.
This point is without substance. The
sectional title units were transferred to the applicant by Hixton
Investments and the levies
were payable to the body corporate. There
is nothing in the agreement to suggest that payment by the first
respondent to the applicant
in terms of the settlement agreement and
payment by the applicant of the levies were reciprocal obligations.
The parties are not
the same, and there is no link between these
different obligations. In any event, the outstanding levies to which
the second respondent
refers related to a period before the units
were transferred to the applicant. The basis on which the second
respondent says that
the applicant should have paid the levies is
that the applicant was in occupation of the units during the relevant
time. That is
not a basis for importing a tacit term into the
settlement agreement. Payment of the levies maybe regulated by
agreement in more
than one way. The parties may eg agree that the
purchaser will pay occupational interest and the levies, or they may
agree that
he will pay occupational interest in an amount which will
enable the seller to pay the levies. There is no evidence before me
on
which I can find that there was a tacit term in terms of which the
applicant was obliged to pay the levies during the time it was
in
occupation before transfer of the units to it. I should add that Mr
Mallett says there was never any agreement or suggestion
that the
applicant would have to pay for its occupation of the units. He says
he was given to understand that the applicant was
given occupation in
order to demonstrate that the offer of the units was a genuine one,
and also as a goodwill gesture because
the applicant had had to wait
so long for payment of what was due to it by the first respondent,
which is a close corporation related
to Hixton Investments. He points
out that no levy statements were issued to the applicant by either
the body corporate or Hixton
Investments.
[11] The next point
raised by the respondents was that the settlement agreement had been
varied orally and that the applicant is
not entitled to any further
payment. The second respondent says he met with Mr Mallet in January
2013 and they agreed that the
arrear levies be written off and that
the balance of the debt in terms of the settlement agreement would be
paid by way of a cash
payment of R50 000 and the transfer to the
applicant of two sectional title units in the complex Sun & Surf,
one of which
still had to be built. He says this resulted in a net
amount of R50 000 owing to the first respondent by the
applicant, which
the applicant would pay upon occupation or transfer
of the two bedroom unit. He says they expressly agreed that the
non-variation
clause would not be binding on the respondents. Mr
Mallet disputes that such an agreement was reached.He says that given
the history
between him and the second respondent and between the
applicant and the first respondent, there was no trust between them
and he
would not have agreed to anything without having reduced it to
writing.
[12] Ms Mills argued that
any such agreement would in any event be hit by clause 11 of the
agreement which provides that no variation,alteration
oramendment
would be binding upon the parties unless reduced to writing and
signed by both parties. She referred to
SA Sentrale Ko-Op
Graanmaatskappy BPK v Shifren en Andere
1964(4) SA 760 (A) in
which a stipulation in a written contract provided that `any
variations in the terms of this contract as
may be agreed upon
between the parties shall be in writing otherwise the same shall be
of no force or effect’. It was held
that the contract could not
be altered verbally. Mr Potgieter sought to overcome this argument by
submitting that clause 11 itself
could be varied and in support of
this he referred to
Kovacs Investment 724 Pty Ltd v Marais
2009 (6) SA 560
(SCA) where Mpati P said in paragraph 16:
“
The
principle that emerges from these decisions, and others not mentioned
here, including decisions of this court, is that provided
the
obligations under a written agreement are to be complied within full,
performance of one of the obligations in a manner different
from that
stipulated in the written agreement, and accepted by the other party,
would be considered as sufficient, or substantial,
compliance and the
obligation as having been discharged. And where the different manner
of the performance was at the request of
one party, and orally (or
tacitly) agreed to by the other, the fact of such performance, ie
that the obligation has been discharged,
may be proved by extrinsic
evidence. The agreement for a different manner of performance does
not have to be in writing”.
[13] Kovacs
is no
authority for the proposition that the written agreement could be
varied orally so as to alter the obligations of one of
the parties,
which have not yet been performed. The
Shifren
principle
applies and the respondents cannot rely on the alleged oral
variation.
[14] Two further
defences, relating to waiver andestoppel, were raised in the papers,
but Mr Potgieter accepted in argument that
they stand or fall with
the alleged oral variation.
[15] The final arrow in
counsel’s quiver was a submission that the failure to join
Hixton Investments as an interested party
constitutes a material
non-joinder. There is also no substance in this point. Hixton
Investments transferred the units referred
to in clause 2 of the
agreement to the applicant and complied with all its obligations in
this regard. No relief is sought against
it in this application. Its
only interest in the matter relates to clause 6 of the agreement, in
terms of which it undertook to
pledge to the applicant five ervens in
the scheme Sun & Surf as security for the payment of the balance
of R2 429 034.
It was recorded in this clause that for
every sum of R500 000 paid by the first respondent towards the
balance of the debt
one erf would be released from the pledge, and in
the event of Hixton selling any of the ervens before the settlement
of the debt,
it would pay to the applicant a sum of R500 000 from the
sale of each erven towards the reduction of the balance owing.
[16] It is not sufficient
for Hixton to have a financial interest in the outcome of these
proceedings. In order for it to be a necessary
party it must have a
direct and substantial interest. If counsel’s argument were
correct then every surety will have to be
joined as a necessary party
in proceedings against the principal debtor.
[17] It follows that the
respondents do not have a valid defence to the applicant’s
claim. The order which I make is as follows:
(a) Judgment is granted
against the first and second respondents, jointly and severally,for
payment of the sum of R1 379 034
together with interest thereon
at the rate of 15,5 % per annum from 10 November 2012 to the date of
payment.
(b) The respondents are
ordered,jointly and severally, to pay the costs of the application.
_______________
Ploos
van Amstel J
Appearances:
For
the Applicant
:
Adv.L.M. Mills
Instructed
by :
Johnston & Partners
Durban
For
the Respondent
:
Adv. A.E. Potgieter / Adv. M. Manikum
Instructed
by
:
NirvanKuwelsar& Company
c/oBeekan&
Company
Durban
Date
of Hearing :
25 October 2013
Date
of Judgment :
14 November 2013