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2025
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[2025] ZAMPMBHC 27
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Trencon Construction (Pty) Ltd v Blue Cloud Investments 227 (Pty) Ltd and Others (2255/2024) [2025] ZAMPMBHC 27 (14 April 2025)
IN
THE HIGH COURT OF SOUTH AFRICA
MPUMALANGA DIVISION,
MBOMBELA (MAIN SEAT)
CASE NO: 2255/2024
REPORTABLE: NO
OF INTEREST TO OTHER
JUDGES: NO
REVISED: NO
DATE 14 April 2025
SIGNATURE
In
the matter between:
TRENCON
CONSTRUCTION (PTY) LTD
A
pplicant
and
BLUE
CLOUD INVESTMENTS 227 (PTY) LTD
First
Respondent
ALKARA
238 (PTY) LTD
Second
Respondent
BAY
BREEZE TRADING 197 (PTY) LTD
Third
Respondent
FERRIS
WHEEL TRADING 37 (PTY) LTD
Fourth
Respondent
WESLEY
TENDAUPENYU
Fifth
Respondent
RANGEWAVE
TRADE AND INVEST 14 (PTY) LTD
Sixth
Respondent
JUDGMENT
MONTSHO-MOLOISANE AJ
[1.]
This is an
application for a money judgment launched by the Applicant against
the First to Fifth Respondents, arising out of a written
Loan
Agreement concluded by them on 31 May 2018 and 05 June 2018.
[2.]
The Applicant
is a private company duly registered and incorporated in terms of the
company laws of the Republic of South Africa.
[3.]
The First to
Fourth Respondents are private companies, duly registered and
incorporated in terms of the company laws of the Republic
of South
Africa, all of which have the chosen
domicilium
citandi et executandi
at the same address in Nelspruit, Mpumalanga.
[4.]
The Fifth
Respondent is cited in his capacity as the director of the First to
Fourth and Sixth Respondents.
[5.]
The Sixth
Respondent is a private company duly incorporated in terms of the
company laws of the Republic of South Africa. No relief
is sought
against the Sixth Respondent, as it has been cited merely to the
extent that it might have an interest in the subject
matter of the
litigation.
[6.]
The money
judgment sought by the Applicant is for payment of the sum of
R 22 112 336.70c,
together with interest on the said amount, calculated daily and
compounded monthly in arrears, at the rate of prime plus 6% (six
percent) per annum a
tempore
morae
,
from 1 May 2024 to date of final payment and costs of suit on the
scale of attorney and own client.
[7.]
The
Applicant’s Founding affidavit was deposed to by its director,
Garth Warren Robinson, whilst the Fifth Respondent deposed
to the
Answering affidavit on behalf of the First to Fourth Respondents, in
his capacity as the director of each of them, and in
his personal
capacity, opposing the relief sought by the Applicant.
[8.]
For ease of
reference, the Applicant shall be referred to as Trencon, and the
First to Fourth, and Sixth Respondents shall be referred
to
interchangeably as Blue Cloud, Alkara, Bay Breeze, Ferris and
Rangewave respectively.
Factual background
[9.]
The cause of
action in this application arises mainly from two written agreements
concluded between the Applicant, represented by
the afore-mentioned
director and the First Respondent, who was represented by its
director, the Fifth Respondent. The two documents
are:
9.1.
the written
agreement titled “CONTRACT OF LOAN”, signed and concluded
by Mr… as the director of Trencon, on its
behalf and Blue
Cloud, duly represented by the Fifth Respondent, as its director, on
31 May 2018 at Bryanston, and 05 June 2018
at Eastleigh
(“
the
Loan Agreement”), in terms of which Trencon would advance an
amount of R 20 000 000.00 to Blue Cloud as contemplated
in
Clause 3 of the said contract; and
9.2.
the written
agreement titled “CONTRACT OF GUARANTEE, CESSION AND PLEDGE”,
(“the Guarantee Agreement”), signed
and concluded on 31
May 2018 at Bryanston, and on 05 June 2018 at Eastleigh, by Trencon,
duly represented by its director, and
the Second to Fourth
Respondents, duly represented by the Fifth Respondent as the director
thereof, guaranteeing and undertaking
as co-principal sureties
in
solidum
to
pay to Trencon on demand, any amounts which Blue Cloud is obliged to
pay to Trencon in terms of the Loan Agreement, in the event
of
default by Blue Cloud.
[10.]
The third
document is the Deed of Suretyship, (“the Suretyship”),
which was signed by the Fifth Respondent in his “
personal
capacity
”,
on 31 May 2018. In this document, the Fifth Respondent bound
himself “
jointly
and severally and in solidium
”
to Trencon, referred to therein as “
the
Creditor
”,
and “
its
successors in title, as limited surety for and co-principal debtor
”
with the First to Fourth Respondents, for the due and punctual
payment of all amounts owed by these Respondents, limited
to a
maximum of R 40 000 000.00 (Forty Million Rand).
[11.]
The First
Respondent however defaulted with the repayments as stipulated in the
Loan Agreement. The Second to Fourth Respondents
also failed to
honour the terms of the Guarantee Agreement. Likewise, the Fifth
Respondent failed to honour the commitment he made
in the Suretyship,
which necessitated the launching of this application.
The Applicant’s
case
[12.]
The deponent
to the Founding affidavit relies on the terms of the Loan Agreement,
read together with the Guarantee Agreement and
the Suretyship signed
by the Fifth Respondent.
The
Loan Agreement
[13.]
The material
terms of the Loan Agreement as pleaded in the Founding affidavit are
inter alia the following:
13.1.
Trencon
would advance an amount of R 20 000 000.00 (Twenty Million
Rand) to Blue Cloud in terms of Clause 3, read with
Clause
1.1.3.12.1;
13.2.
Trencon
advanced an amount of R 6 000 000.00 (Six Million Rand) of
the Loan Amount to Blue Cloud on 23 April 2018 as stated
in Clause
5.1.1;
13.3.
Trencon
advanced the balance of the Loan Amount to Blue Cloud on 30 May 2018
as stated in Clause 5.1.2, and 1.1.3.1;
13.4.
Interest would
accrue upon the Loan Amount, from 30 May 2018 to date final payment
(both dates inclusive), at the prime rate plus
2% nominal (Applicable
Interest Rate), calculated daily and compounded monthly in arrears as
provided for in Clauses 6.1 and 1.1.3.1;
13.5.
Blue Cloud
would use its best endeavours to repay the amounts due to Trencon
under the agreement as soon as possible after 30 May
2018 in in terms
of Clauses 7.1 and 1.1.3.1;
13.6.
After 30 May
2018 Blue Cloud would, on a monthly basis make payment of at least
the monthly interest which accrued on the Loan Amount,
which payment
was to be received by Trencon on or before the last business day of
each month in terms of Clauses 7.2 and 1.1.3.1;
13.7.
An additional
amount of R 10 000 000.00 (Ten Million Rand), referred to
as the Loan bonus would be payable by Blue Cloud
to Trencon in terms
of Clauses 1.1.3.12.2 and 1.1.3.13;
13.8.
All amounts
due to Trencon under the Loan Agreement, being the Loan Amount, the
Loan Bonus, interest and costs (Loan Outstanding)
would be settled in
full by no later than 30 May 2021 as provided for in Clause 7.3;
13.9.
Interest would
accrue upon the Loan Bonus, from the Final Repayment Date to the date
of repayment in full (both dates inclusive),
nominal, calculated
daily and compounded monthly in arrears in terms of Clause 6.1.2;
13.10.
In terms of
Clause 7.7, the nature and amount of Blue Cloud’s indebtedness
under the Loan Agreement, would at any time be
deemed to be
adequately proven by a written Certificate by any director of
Trencon, whose appointment and designation it would
not be necessary
to prove, and which would, in the absence of manifest error, be
binding on Blue Cloud, and still constitute
prima
facie
proof in any legal proceedings against Blue Cloud, and constitute
prima facie
proof, of the indebtedness of the Borrower, Blue Cloud, and would
constitute a liquid document for the purpose of any litigation
by the
Lender, which is Trencon;
13.11.
If Blue Cloud
failed to settle any amount owing to Trencon in terms of the Loan
Agreement on the due date for settlement thereof,
then interest would
accrue upon the Loan Agreement from 30 May 2018 to the date of final
payment (both dates inclusive), at the
prime rate plus 2% nominal,
calculated daily and compounded monthly in arrears in terms of 7.8
read with Clauses 1.1.3.3 and 1.1.3.5
of the Loan Agreement;
13.12.
All payments
made by Blue Cloud to Trencon in settlement of the amounts due to
Trencon, would be applied first towards costs, then
towards interest,
and finally towards the capital of the Loan Amount, as contemplated
in Clause 7.11;
13.13.
In terms of
Clause 19.3, the persons signing the Loan Agreement in a
representative capacity warranted their authority to do so;
and
13.14.
Each of the
Parties to the Agreement acknowledged and agreed that all of the
provisions of the Loan Agreement and the restrictions
are fair and
reasonable in all the circumstances and are in accordance with the
Parties’ intentions in terms of Clause 20.1.2
of the Loan
Agreement.
The Guarantee
Agreement
[14.]
The
Applicant’s Founding affidavit further relies on the terms of
the Guarantee Agreement, the material terms of which are
inter
alia
as
follows:
14.1.
Clause 2.1.4
refers to Blue Cloud as the Borrower, and the ‘Guarantors’
as the Second, Third and Fourth Respondents,
jointly and severally,
Clause 2.19 specifies that Trencon is the “Lender” and
the “Loan Agreement” is the
Contract of Loan concluded
between Trencon and Blue Cloud;
14.2.
With
effect from 05 June 2018, until the date that all of Blue Cloud’s
obligations under the Loan Agreement are discharged,
Blue Cloud
pledged in
securitatem
debiti
,
all of its rights, title and interest in and to 27 ordinary shares in
Rangewave, representing 27% of all of the issued ordinary
shares in
it, in terms of Clause 2.1.12 read with Clause 2.1.13;
14.3.
In terms of
Clause 3.1, Trencon agreed to enter into the Loan Agreement with Blue
Cloud, subject to each of the Guarantors undertaking
(as principal
and primary obligation), to pay to Trencon all amounts which Blue
Cloud is obliged to pay under the Loan Agreement.
14.4.
Clause 4.1 of
the Guarantee Agreement provides that each of the Guarantors (that is
the Second, Third and Fourth Respondents), guarantees
and stands as
co-principal surety
in
solidium
to pay to Trencon, on demand, any amounts which Blue Cloud has agreed
to pay to Trencon under, and in terms of the Loan Agreement,
and
which Blue Cloud fails to pay timeously to Trencon;
14.5.
Clause 4.2
unequivocally stipulates that the Guarantee Agreement constitutes a
separate primary obligation enforceable against each
Guarantors
jointly and severally, on the terms and conditions contained in the
Agreement, and the terms of surety (the Deed of
Suretyship);
14.6.
In terms of
Clause 5.1, Blue Cloud pledged and ceded in
securitatem
debiti
with effect from the signature date and terminating on the Final
Discharge date all of its rights, title and interest in, and to
the
Pledged and Ceded Rights to Trencon, as continuing general covering
security for the due, proper and timeous performance and
discharge of
the Secured Obligations;
14.7.
In terms of
Clause 5.6, Trencon shall accept the benefit of the Pledge and
Cession contemplated in Clause 5.1, and the cession in
securitatem
debiti
operates in respect of all rights, powers and privileges attaching to
the Pledged and Ceded Rights;
14.8.
An event of
default would occur under the Guarantee Agreement if:
14.8.1.
an event of
default occurred under the provisions of the Loan Agreement, and such
event of default was not remedied within the time
period specified
under the Loan Agreement;
14.8.2.
if any of the
First to Fourth Respondents breached a provision of the Guarantee
Agreement and, if such breach was capable of remedy,
failed to remedy
such breach within seven days of written notice, from Trencon to do
so, as provided for in Clause 5.7.2 of the
Guarantee Agreement; and
14.8.3.
save as
contemplated under the Loan Agreement, the Second to Fourth
Respondents waived any rights that they may have to first require
Trencon to make any demand of Blue Cloud to proceed against or claim
payment from Blue Cloud or any third party to take action
or obtain
judgment in any Court against Blue Cloud, to make, file or prove any
claim in the business rescue, liquidation or winding-up
of Blue
Cloud, or to enforce any security granted by Blue Cloud or any third
party, before making payment under the Guarantee Agreement,
in terms
of Clause 9.1.
14.9.
The First to
Fourth Respondents further acknowledged and agreed that their
obligations under the Guarantee Agreement, are absolute,
and that
upon the date of signature of the Guarantee Agreement, they remain
bound to the full extent thereof, in terms of Clause
13.1 thereof.
The Deed of
Suretyship
[15.]
The
Applicant’s affidavit further relies on the contents of the
Suretyship signed by the Fifth Respondent the material terms
of which
are that:
15.1.
the Fifth
Respondent unequivocally bound himself “
jointly
and severally and
in
solidium”
to Trencon and its successors in title, as limited surety for, and
co-principal debtor with the First, Second, Third and Fourth
Respondents, for the due and punctual payment by them to Trencon,
limited to a maximum of R 40 000 000.00 to (Forty Million
Rand), for all amounts owing to Trencon, in terms of the Loan
Agreement and the Guarantee Agreement;
15.2.
the amount of
the indebtedness of the First to Fourth Respondents to Trencon, shall
at any time be determined and proven by a Certificate
signed by a
director or the attorneys of the Creditor, as provided fro in Clause
5; and
15.3.
in terms of
Clause 3, the Suretyship remains in force until the indebtedness of
the Respondents to Trencon has been paid in
full.
The admitted
indebtedness of Blue Cloud
[16.]
The Applicant,
in its Founding affidavit, further relies on the Respondent’s
letter to Trencon dated 26 March 2021, wherein
the Fifth Respondent
acknowledges the indebtedness of Blue Cloud, to Trencon. The gist of
the indebtedness of Blue Cloud as pleaded,
appears from the said
letter, where the following appears:
“
The
above loan agreement dated 30 May 2018 has reference. According to
the agreement, full repayment of the loan of R20 million
(plus
interest) and a loan bonus of R10 million are due on 30 May 2021.
Blue Cloud has
maintained the interest payments which are currently up to date.
However, due to the following factors, Blue Cloud
will not be in a
position to repay the loan and bonus by the agreed date...”
[17.]
The ensuing paragraph further states:
“
It
is proposed that capital repayments be made as follows:
1.
R10 million by 31 August 2021
2.
R10 million by 31 January 2022, and
3.
R10 million by 30 May 2022
4.
Interest payments to be maintained
until the loan has been fully repaid.
Trencon
currently holds security in the form of 27% shares in Rangewave Trade
and Invest 14 (Pty) Ltd, the company that owns Mbombela
Square,
personal securities from the director of Blue Cloud (myself) and from
associated companies
”
.
[18.]
Blue Cloud’s
letter was responded to by the Applicant’s attorney, on 18 May
2021 wherein it is stated that Trencon was
amenable to the proposed
payment plan and some documents were requested from Blue Cloud to
compile a legal audit, so as to be able
to exercise due diligence by
Trencon.
[19.]
It is further
averred that:
19.1.
Blue Cloud
failed to repay the Loan Amount due on 30 May 2021, as proposed in
the letter of the Fifth Respondent, dated 26 March
2021;
19.2.
On 03 March
2022, Trencon’s attorney dispatched a Letter of demand to Blue
Cloud, demanding payment. In the Letter of demand,
Trencon demanded
that the Second, Third and Fourth Respondents make payment in the sum
of R 32 350 527.70 to it, failing
which Trencon would
pursue litigation;
19.3.
On 14 March
2022, the parties held a “without prejudice” meeting at
the offices of the attorneys of record of the First
to Fifth
Respondents in Saxonwold, Johannesburg, where it was agreed that
Trencon would hold over further action against the Respondents;
19.4.
On 19 March
2022, Trencon’s attorneys of record dispatched a further letter
to the First to Fifth Respondents’ attorneys
of record, drawing
their attention to the fact that the amount owing was incorrectly
stated previously, and that the correct amount
of the debt was
actually R
32 635 917.37;
19.5.
That the above
stated amount was never paid by Blue Cloud;
19.6.
That between
March 2022 and March 2024, the parties continued to engage with one
another with a view of reaching an agreement regarding
the payment of
the debt due by Blue Cloud to Trencon;
19.7.
The parties
were however unable to come to a suitable arrangement, this despite
the fact that Blue Cloud made various payments towards
the reduction
of its indebtedness to Trencon during the period of the negotiations.
19.8.
That on 02 May
2024, the Applicant’s attorneys dispatched a Letter of demand,
wherein it was recorded that as at 30 April
2024, Blue Cloud was
indebted to Trencon in the sum of R 22 512 236.70c, and
that it remained in default of the Loan
Agreement;
19.9.
That on 03 May
2024, after the Letter of demand dated 02 May 2024 was dispatched to
its attorneys of record, Blue Cloud paid an
amount of R 400 000.00
to Trencon;
19.10.
On 08 May
2024, Trencon’s attorneys dispatched a letter to the Second to
Fourth Respondents’ attorneys, indicating that
of
the
amount
R 22 512.70c, Blue Cloud had only paid R 400 000.00,
with the amount of R 22 112 236.70c still owing under the
Loan Agreement; and
19.11.
Certificates
of balance were issued on 15 May 2014, reflecting the amounts owing
by the Respondents to Trencon
ex
facie
the
Loan Agreement.
Respondents’
case
[20.]
The responses
in the Answering affidavit are generally sparse, as the material
allegations made by the Applicant regarding the indebtedness
of Blue
Cloud to Trencon have been left unchallenged.
[21.]
The Fifth
Respondent admitted that it is his signature that appears on each of
the three documents relied on in the Applicant’s
Founding
affidavit but contends that the Loan Agreement is unenforceable.
[22.]
The Answering
affidavit however fails to furnish facts or place evidence that
challenges the enforceability of the Loan Agreement.
All that is
pleaded by the deponent is that he “
puts
the Applicant to the proof thereof
”.
[23.]
In addition to
the bare denials pleaded, the Fifth Respondent avers that the letter
he wrote to the Applicant on behalf of Blue
Cloud on 26 March 2021,
constitutes a Settlement negotiation, which cannot be used in civil
proceedings as it is privileged.
[24.]
It is further
pleaded that Blue Cloud is not indebted to Trencon, and on that
ground, the application ought to be dismissed with
costs.
Issues for
determination
[25.]
Having regard
to the facts pleaded in the affidavits before Court, what needs to be
considered is whether the Loan and Guarantee
Agreements, read with
the Deed of Suretyship, are enforceable, thus imputing liability for
payment of the debt owed, on the First
to Fifth Respondents.
Evaluation
[26.]
It is common
cause that the Applicant’s cause of action is premised on the
Loan Agreement, the Guarantee Agreement and the
Suretyship, the
material terms of which are referred to above.
[27.]
It is trite
that in evaluating the Applicant’s application, it is incumbent
on me to assess the evidence, as appears from
the facts pleaded in
the Founding and Answering affidavits. From the papers filed in this
case, it appears that the Answering affidavit
does not respond to
every fact pleaded in the Applicant’s Founding affidavit.
[28.]
In
the premises, this Court aligns itself with the
obiter
dictum
in
Stellenbosch
Farmers’ Winery Ltd v Stellenvale Winery (Pty) Ltd
[1]
,
where it was held that:
“…
Where
it is clear that facts, though not formally admitted, cannot be
denied, they must be regarded as admitted
”.
[29.]
It is
important in this regard to point out that the Fifth Respondent,
being the director of all the corporate Respondents, admitted
in the
Answering affidavit that it is his signature that appears on all
three documents and does not challenge the validity of
the Loan
Agreement. The authenticity thereof is therefore unchallenged and is
deemed to be admitted.
[30.]
The Fifth
Respondent more importantly does not dispute the terms of the Loan
Agreement, in particular, Clause 5.1.1 thereof, where
it is stated
that “
On
23
rd
April 2018, (the Lender) advanced R 6 000 000.00 (Six
Million Rand) of the Loan Amount to the Borrower
”.
All that the Fifth Respondent contends regarding the payment by
Trencon of an amount of R 6 000 000.00 (Six Million
Rand)
on 23 April 2018, and R 14 000 000.00 (Fourteen Million) on
30 May 2017, is that it constitutes hearsay evidence,
despite his
signature.
[31.]
Furthermore,
the Fifth Respondent has not, in his Answering affidavit, disputed
the terms of the Loan Agreement, the applicable
interest rate
payable, the Loan bonus payment of R 10 000 000.00 (Ten
Million Rand), the compounded monthly interest
payable, as well as
the Final Repayment Date, as set out in the Founding affidavit of
Trencon.
[32.]
I also need to
emphasize that there is no doubt whatsoever, that the Fifth
Respondent duly signed the Loan Agreement, the contents
of which are
unambiguous regarding the terms of the agreement, and the Loan
amount.
[33.]
The contents
of the Guarantee Agreement are also unambiguous, and as already
stated herein, the Fifth Respondent duly signed the
said document in
acknowledgement of the contents and terms thereof.
[34.]
More
importantly, the contents of the Deed of Suretyship that the Fifth
Respondent, signed and bound himself therein as a surety
for, and
co-principal debtor with the First to Fourth Respondents for the due
and punctual payment due to Trencon, limited to a
maximum of R
40 000 000.00 (Forty Million Rand), have not been
controverted by any evidence pleaded in the Answering
affidavit.
[35.]
Lastly, it is
quite evident from the letter dated 26 March 2021 sent by the Fifth
Respondent to Trencon, that no dispute had been
declared by the
Applicant at that stage. The dispute only arose after the first
Letter of demand as dispatched by the Applicant’s
attorney of
record to Blue Cloud, on 3 March 2022. The same applies to the
provision for the Certificate of balance in the Laon
Agreement which
is not in issue.
Legal principles
[36.]
It is
appropriate to remark that in considering whether the Applicant has
established the indebtedness of Blue Cloud, regard has
to be had to
the case pleaded by the parties, and the applicable legal principles.
[37.]
Before I
consider the application and the issues raised therein, I find it
appropriate to remark that as a principle, the affidavits
in motion
proceedings serve not only to define the issues between the parties,
but also to place essential evidence before the
Court.
[38.]
In
this regard, the Applicant’s Counsel correctly referred this
Court to the case of
Die
Dros (Pty) Ltd and Another v Telefon Beverages CC and Others
[2]
,
where the import of this legal principle was summarised by the Court.
In that case, the Court emphasised that affidavits in motion
proceedings must contain factual averments that are sufficient to
support the cause of action on which the relief that is being
sought
is based
[3]
.
[39.]
It
is important to mention that the Appeal Court, in the fairly recent
case of
Skog
NO Others v Agullus & Others
[4]
held that:
“
It
is trite that in motion proceedings, the affidavits filed in the
application, constitute evidence. In such proceedings, the norm
is
that affidavits are limited to three sets. For this reason, utmost
care must be taken to fully set out the case of a party on
whose
behalf an affidavit is filed
[5]
”.
[40.]
I am satisfied
that the Applicant’s Founding affidavit fully set out the facts
on which it relies for the relief it is seeking,
as the averments
made therein are fully corroborated by the contents of the Loan
Agreement, the Guarantee Agreement, and the Deed
of Suretyship signed
by the Fifth Respondent. In addition, thereto, the Applicant’s
affidavit detail steps embarked upon
by the parties, at the instance
of its attorneys to resolve the dispute, by holding settlement
negotiations.
[41.]
Regarding the
Fifth Respondent’s contention that the letter of 26 March 2021
that he sent to the Applicant on behalf of Blue
Cloud, constitutes a
privileged settlement negotiation, which was aimed at resolving the
dispute, I find that:
41.1.
it is clearly
evident that as at 26 March 2021, no dispute had been declared by the
Applicant, nor was any Letter of demand sent
to the Applicant’s
attorney, regarding the default by Blue Cloud in honouring the terms
of the Loan Agreement;
41.2.
the Fifth
Respondent, in his capacity as the director of the First to Fourth
Respondents, wrote the said letter in acknowledgement
of the
indebtedness of Blue Cloud to Trencon, highlighting the payments of
interest already made in terms of the Loan Agreement,
and proposing
new payment plans, due to what the letter refers to as “
the
depressed demand for office space occasioned by the COVID 19
Pandemic
”,
and that “
The
Pandemic had forced tenants to request reduced rentals and rent
holidays, putting further pressure on Blue Cloud’s cashflow
”;
and
41.3.
the parties
commenced their “
without
prejudice
”
negotiations only on 14 March 2022, nearly one year later, pursuant
to the Letter of demand sent by Trencon’s attorneys
to Blue
Cloud’s attorneys.
[42.]
In
this regard, the principle upheld in the case of
ABSA
Bank Ltd v Hammerle Group
[6]
is applicable. In that case, it was held that:
“
...
As a general rule, negotiations between parties which are undertaken
with a view to settlement of their disputes are privileged
from
disclosure. This is regardless of the fact whether or not the
negotiations have been stipulated to be on a “without
prejudice” basis. However, there are exceptions to this rule.
One of these is that an offer made, even on a without prejudice
basis, is admissible in evidence as an act of insolvency
”.
[43.]
In the
circumstances, I find that the letter of 26 March 2021, written by
the Fifth Respondent on behalf of Blue Cloud, does not
constitute
privileged settlement negotiations. It is evident from the contents
thereof, that this was not a settlement negotiation,
but a proposal
for a new payment plan, which was initiated by Blue Cloud, through
the Fifth Respondent.
[44.]
I
cannot be oblivious to the fact that, these being motion proceedings,
this Court is bound by the legal principle laid down in
Plascon
Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd
[7]
.
In
terms of that principle, the Appellate Division held that: “…
where
in proceedings on notice of motion, disputes of facts have arisen on
the affidavits, a final order, whether it be an interdict
or some
other form of relief, may be granted if those facts averred in the
Applicant’s affidavits which have been admitted
by the
Respondent, together with the facts alleged by the Respondent,
justify such an order… In certain instances, the denial
by the
Respondent of a fact alleged by the Applicant may not be such as to
raise a real genuine or bona fide dispute of fact
”
[8]
.
Certificates
of balance
[45.]
Regarding the
Certificates of balance issued in accordance with Clause 7.7 of the
Loan Agreement, it is averred in the Answering
affidavit that “
Given
the failure to prove any indebtedness as aforesaid, the Certificates
of indebtedness have no evidential value”
.
I find this averment to be replete and lacking any factual basis in
that the validity of the Loan Agreement, which is co-signed
by the
Fifth Respondent, and three witnesses, and which stipulates the
requirement for the Certificate of balance to be furnished
by a
director of the Applicant, has never been disputed. In fact, it
is not disputed that Blue Cloud made payments to defray
the debt, as
averred in the Founding affidavit and in the Fifth Respondent’s
letter of 21 March 2021 that proposed a new
payment plan.
[46.]
It
is an established legal principle that facts in the Applicant’s
affidavit which are not formally admitted in the Answering
affidavit,
cannot be denied but must be regarded as admitted. The case of
Senekal
v Trust Bank of Africa Ltd
[9]
to which I was referred by the Applicant’s Counsel, is more
relevant herein. In that case, the Appellate Division held as
follows
in that regard:
“
The
inquiry, then, in the light of what I have just said, is whether at
the end of the case, the prima facie evidence afforded by
the
Certificate had been so disturbed as to prevent its becoming
sufficient proof
”
[10]
.
[47.]
The
law regarding Certificates of indebtedness has been settled, and
remains as summarised by the Appellate Division in the case
of
Bank
of Lisbon International Ltd v Venter en ‘n Ander
[11]
as follows:
47.1.
Certificates
of indebtedness constitute
prima
facie
proof of the amount owing by the debtor;
47.2.
A creditor who
relies upon a Certificate of indebtedness is not required to present
evidence in support of the Certificate; and
47.3.
The debtor is
thus required to put up evidence in order to rebut the
prima
facie
probative value of the Certificate. If he does not, the Certificate
alone is sufficient proof of the creditor.
[48.]
In this case,
no evidence was pleaded in the Answering affidavit, rebutting the
prima facie
probative value of the Certificate of balance relied on by the
Applicant, as quantified. I therefore cannot find any rationale
for
deviating from the aforegoing
Bank
of Lisbon
principle, and the terms of the Loan Agreement as stipulated, in
Clause 7.7, read with Clause 7.8, and Clauses 1.1.3.3, 1.1.3.5
and
1.1.3.17 thereof.
[49.]
In my view
therefore, the Respondents’ contention challenging the
admissibility of the Certificates of balance relied on by
the
Applicant, ought to be dismissed. The probative value of the said
Certificates appears in Clause 7.7 of the Loan Agreement,
the
validity of which remains unscathed.
[50.]
In the
circumstances, this Court is therefore left with no option but to
invoke the
Plascon-Evans
rule, by accepting the version of the Applicant as pleaded in the
Founding affidavit, and which is not expressly denied in the
Answering affidavit.
[51.]
I am satisfied
that the First to Fifth Respondents have failed to aver facts in
rebuttal of the Applicant’s claim. The Applicant
has therefore
succeeded in establishing the indebtedness of the First to Fifth
Respondents in the amount of R 22 112 236.70c.
[52.]
I am of the
view that the applicable rate of interest payable in respect of the
debt should be as stipulated and agreed to in Clauses
6.1.2,
7.8,1.1.3.3 and 1.1.3.5 of the Loan Agreement.
Costs
[53.]
The Applicant
seeks an order for costs on the scale as between attorney and own
client.
[54.]
The
Constitutional Court, in the case of
Baloyi
v Public Protector and Others
[12]
held that:
“
It
is trite law that costs are awarded to the successful party, subject
to certain limited exceptions. The purpose underlying this
principle
is to indemnify the successful litigant against the expenditure
incurred as a result of having been unjustly compelled
to either
initiate or to defend litigation as the case may be
”.
[55.]
In this case,
Clause 18 of the Loan Agreement concluded by the Applicant,
represented by its director, and the First to Fourth Respondents
represented by the Fifth Respondent who also signed the Suretyship in
his personal capacity, provides for Blue Cloud to reimburse
Trencon
on demand, for the charges and expenses, including value-added-tax
and the fees and expenses on the scale as between attorney
and its
own client, incurred by Trencon in connection with the successful
enforcement of its rights.
[56.]
In lieu of the
fact that the scale prayed for by the Applicant accords with the
parties’ Loan Agreement, there is no legal
basis for this Court
to deviate therefrom.
ORDER
[57.]
In the result,
I make the following order:
57.1.
The First to Fifth Respondents are
jointly and severally liable for:
57.1.1.
Payment of an amount of R
22 112 236.70c;
57.1.2.
Interest on the aforesaid amount,
calculated daily and compounded monthly in arrears, at the rate of
prime plus 6% per annum a
tempore morae
from 01 May 2024 to the date of final
payment;
57.1.3.
Costs of suit, including the costs
for employment of two counsel, on the scale as between attorney and
own client.
L.M.
MONTSHO-MOLOISANE
ACTING
JUDGE OF THE HIGH COURT
MPUMALANGA
DIVISION, MBOMBELA
Date
heard
: 13 February 2025
Judgment
delivered
:
14 April 2025
By
electronic circulation to all parties
Appearances
Counsel
for the Applicant
:
A
Bester SC
R
Bosman
Sandton
Instructed
by
:
Andrew
Garratt Incorporated
Rosebank,
Johannesburg
Email:
andrew@garrattinc.com
and
magda@garrattinc.com
;
andybester@andybester.co.za
C/O:
Markus Saayman Incorporated
NELSPRUIT
Counsel
for the first Respondent
:
C.
Van der Spuy
Sandton
Lanham-Love
Galbraith
instructed
by
:
Van
Reenen Incorporated
Saxonwold,
Johannesburg
Email:
darrenA@llgy.co.za
;
EwaldD@iigv.co.za
C/O
WDT Attorneys
Mbombela
charne@wdatt.co.za
;
charner@wdtatt.co.za
and
amahle@wdtatt.co.za
NELSPRUIT
[1]
Stellenbosch
Farmers’ Winery Ltd v Stellenvale Winery (Pty) Ltd
1957 (4) SA
234
(C) at p 235 E-G
[2]
Die Dros (Pty) Ltd and Another v Telefon Beverages CC and Others
2003 (4) SA 207 (CPD)
[3]
See also: Quartermark Investments (Pty) Ltd v Mkhwanazi and Another
2014 (3) SA 96
, at para 13
[4]
Skog N.O & Others v Agullus & Others 2024 (1) SA 72 (SCA)
[5]
At paragraphs 18 of the judgment
[6]
ABSA Bank Ltd v Hammerle Group
2015 (5) SA 215
(SCA); See also:
Lynee and Main Incorporated v Naidoo, 2005 JDR 0972 N
[7]
Plascon -Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3)
SA 623 (A)
[8]
At 634 E-635C; See also Wightman t/a JW Construction v Headfour and
Others
[2008] ZASCA 6
;
2008 (3) SA 371
(SCA), at para 12
[9]
Senekal
v Trust Bank of Africa Ltd
1978 (3) SA 375
(A) p382 H-383C
[10]
At p383 B
[11]
Bank
of Lisbon International Ltd v Venter en’ Ander
1990 (4) SA 463
(A) at p481F-H – 483B
[12]
Baloyi v Public Protector and Others
2022 (3) SA 321
(CC) at para 51