REPORTABLE JUDGMENT
IN THE HIGH COURT OF SOUTH AFRICA
WESTERN CAPE DIVISION, CAPE TOWN
CASE NO: 16399/2023
In the application between
MERCHANT COMMERCIAL FINANCE 1 (PTY) LTD APPLICANT
TRADING AS MERCHANT FACTORS
(REGISTRATION NUMBER: 2014/075671/07)
And
VALOWORX 33 CC FIRST RESPONDENT
ARCHAR COLYER HEAD N.O. SECOND RESPONDENT
ARCHAR ALEXANDER BROWNLEE N.O. THIRD RESPONDENT
ANDREW GRANT KIRKMAN N.O. FOURTH RESPONDENT
ACTING IN THEIR CAPACITIES AS THE
JOINT TRUSTEES OF THE CAPE LEOPARD
TRUST (IT 1382/2002)
ARCHAR COLYER HEAD FIFTH RESPONDENT
Date of hearing (application for
REPORTABLE JUDGMENT
leave to appeal) : 17 February 2025
Date of judgment: Judgment was handed down electronically by circulation to
the parties’ representatives by email and released to SAFLII. The date for hand
down is deemed to be 21 February 2025
JUDGMENT : APPLICATION FOR LEAVE TO APPEAL
VAN DEN BERG, AJ
[1] The applicants (cited as the respondents in the main application) apply for
leave to appeal against the judgment handed down on 19 November 2024.
The parties are referred to herein as cited in the opposed application (i.e. the
applicants in the application for leave to appeal are referred to as the
respondents) . The respondents were ordered to pay, jointly and severally , the
amount of R944,919.85 with interest and the applicant ’s party and party costs.
THE LEGAL POSITION IN DECIDING IF LEAVE TO APPEAL SHOULD BE
GRANTED
[2] Section 17(1) of the Superior Courts Act provides that leave to appeal may
only be given where the Judge is of the opinion that:
[2.1] The appeal would have reasonable prospects of success; or
[2.2] There is some other compelling reason why the appeal should be
heard, including conflicting judgments on the matter under
consideration.
REPORTABLE JUDGMENT
[3] The prospect of success required in terms of Section 17(1)(a)(i) is to be
decide d without reference to the parties’ wishes.1 Inn Mont Chevaux Trust v
Goosen2 the Court held that:
“It is clear that the threshold for granting leave to appeal against a judgment of
a High Court has been raised in the new Act. The former test whether leave to
appeal should be granted was a reasonable prospect that another court might
come to a different conclusion, ...The use of the word "would" in the new
statute indicates a measure of certainty that another court will differ from the
court wh ose judgment is sought to be appealed against. ...”3
[4] The test of reasonable prospects of success postulates a dispassionate
decision based on the facts and the law, that a Court of Appeal could
reasonably arrive at a conclusion different to that of the t rial Court. In order to
succeed, the applicant must convince the Court on proper grounds that he
has prospects of success on appeal and that those prospects are not remote
but have a realistic chance of succeeding. There must be a sound, rational
basis f or the conclusion that there are prospects of success.4
[5] Leave to appeal is further granted not in respect of the reasons for the
judgment but in respect of the order itself. Therefore, the success of the
application for leave to appeal must be related to the outcome of the case and
not an argument that fails to dispose of the case in the Appellant's favour.5
[6] In the matter of Tecmed Africa v Minister of Health6 the Supreme Court of
Appeal held:
“[17] First, appeals do not lie against the reasons for judgment but against
the substantive order of a lower court. Thus, whether or not a court of appeal
1 Rail Commuter Action Group v Transnet Limited trading as Metrorail (Number 2) 2003 (5) SA
593 (C)
2 2014 JDR 2325 (LCC)
3 At para 6
4 S v Smith 2012 (1) SACR 567 at 570, para 7
5 Goodwin Stable Trust v Duohex (Pty) Ltd (2) [1996] 3 All SA 119 (C)
6 [2012] 4 All SA 149 (SCA)
REPORTABLE JUDGMENT
agrees with a lower court’s reasoning would be of no consequence if the
result would remain the same (Western Johannesburg Rent Board v Ursula
Mansions (Pty) Ltd 1948 (3) SA 353 (A) at 354).”
GROUNDS UPON WHIC H TO LEAVE TO APPEAL IS SOUGHT
[7] The respondents base their notice of leave to appeal on the following
grounds:
[7.1] That the settlement agreement concluded at Cape Town on 14
December 2020 between the applicant, the first respondent, the
Cape Leopard Trust and the fifth respondent is not valid because :
[7.1.1] the fifth respondent only signed the settlement agreement as
“Member for Valoworx CC” and not in his personal capacity ;
[7.1.2] that no resolution was placed before the Court authorising Valoworx
33 CC and/or the Cape Leopard Trust to enter into this settlement
agreement ;
[7.1.3] that the fifth respondent only became a member of the first
respondent on 18 March 2022 ;
[7.2] That the Court erred in finding that the fifth respondent was liable
based upon the suretyship dated 24 December 2012 because the
suretyship was signed between the fifth respondent and Merchant
Commercial Finance (Pty) Ltd, registration number 1998/018914/ 07
and not the applicant,
[7.3] that the finding that monies were and/or are due by the first to fifth
respondents was incorrect becasue it is not possible to cede an
obligation or debt that does not exist.
VALIDITY OF SETTLEMENT AGREEMENT
REPORTABLE JUDGMENT
[8] The applicant alleges in paragraphs 29 and 30 of the founding affidavit that
the parties entered into the settlement agreement and the terms thereof . The
respondent admitted, as per paragraph 82 of the answering affidavit, the
conclusion of the settlement agre ement but denied its validity and binding
nature, arguing that the term loan agreements are not valid and binding due to
non-compliance with the National Credit Act (Act 34 of 2015), and that
Valoworx could never have breached an invalid and unenforceable
agreement .7
[9] The respondents did not dispute or allege in their answering affidavit that the
fifth respondent signed the settlement agreement solely in his capacity as a
member of Valoworx, nor do they deny the authority of Valoworx or the Cape
Leopard Trust to have concluded the settlement agreement . Most importantly
no evidence was presented by the respondents that the fifth respondent only
became a member of the first respondent on 18 March 2022. In this regard
the respondents , for the first time, alleged in paragraph 1.4 of the application
for leave to appeal that:
“…even if the resolutions in respect of the first respondent were signed –
which they were not – as per annexure “ACH1” attached hereto it is self -
evident that the fifth respondent only became the member of the first
respondent on 18 March 2022, some 16 months after the settlement
agreement was signed and as such t he fifth respondent was not authorised on
behalf of the first respondent to enter into the said agreement.”
[10] In motion proceedings , the affidavits constitute the evidence and pleadings. It
is trite that the parties must allege the required facts and adduc e the
admissible evidence in support thereof in their affidavits. Moreover , the
respondents admitted the conclusion of the settlement agreement, although
they denied its validity on grounds different from those contended for now in
the application for leave to appeal . It is trite that an admission may not merely
7 Answering Affidavit [81], pp 126
REPORTABLE JUDGMENT
be withdrawn, and the Court cannot go behind the admission , especially in the
absence of any allegation that it was made in error.
FIFTH RESPONDENT’S SURETYSHIP
[11] The respondents in the application for leave to appeal referred to the
signature of the fifth respondent on paginated page 94, wh ere he signed on
behalf of Valoworx CC. It is contended in the application for leave to appeal
that he did not sign the settlement agreement in his personal capacity.
However, n o explanation is offered regarding the two signatures on paginated
page 95 , wher e the fifth respondent apparently signed as trustee of the Cape
Leopard Trust and, second, in his personal capacity.
CASE NOT MADE OUT IN FOUNDING AFFIDAVIT
[12] Mr Wilkin , who appears for the first to fifth respondents correctly, did not
persist in argument with the aforementioned grounds of leave to appeal. He
limited his argument to seeking leave to appeal on behalf of the fifth
respondent only and not all the respondents . He submitted that the suretyship
by the fifth responde nt is invalid and unenforceable and that the Court erred in
finding differently. Mr Wilkin argues that the applicant does not make out a
case in its founding affidavit regarding the validity of the fifth respondent’s
suretyship.
[13] The argument goes that the applicant alleges in paragraph 26 of the founding
affidavit , that the fifth respondent ‘in writing, jointly and severally, irrevocably
as surety for and co -principal debtor in solidum with the first respondent
[bound himself ] for the due and punct ual payment of all and any monies which
now is or may hereinafter being owing for which the first respondent may or
from time to time owe to the ‘applicant ’ from whatsoever cause and
howsoever arising …’. Mr Wikin’s argument turns on the meaning of the word
‘applicant’ as used in paragraph 26. He submits that no amount was owed to
the ‘applicant’ when the suretyship was concluding in 2012 since the applicant
was only registered in 2014.
REPORTABLE JUDGMENT
[14] It is common cause that the fifth respondent executed his suretyship in favour
of the applicant’s predecessor in title, Merchant Commercial Finance (Pty)
Limited (Registration Number 1998/018914/07). In terms of clause 27 of the
suretyship executed by the fifth respondent, the applicant’s predecessor was
entitled to cede the suretyship to the applicant at any time , without reference
to the fifth respondent , who acknowledged that he would , upon such cession,
be liable to the applicant in terms thereof. Mr Wilkin submits now that the fifth
respondent signed the sett lement agreement in “error” . This error relates only
to the fact that his suretyship was granted in favour of the applicant’s
predecessor and not the applicant with whom the settlement agreement was
concluded.
[15] The fifth respondent disputes the validity o f his suretyship in the answering
affidavit but on grounds different from the alleged error that he now seeks to
rely upon. In the answering affidavit , the fifth respondent confined his
opposition to alleging that the term loan agreements, suretyships and
settlement agreement are void based upon the NCA defences referred to in
the judgment. On a conspectus of the evidence, there was never any doubt
conc erning the identity of the parties involved in the settlement agreement or
the applicant’s predecessor's rights and title. I cannot see how any other court
could conclude that the first respondent was under any misapprehension of
the facts .
[16] In Shabangu v Land and Agricultural Development Bank of South Africa8 the
Constitutional Court also dealt with the validity of a settlement agreement and
suretyship. In the Shabangu matter , the suretyship's wording clearly showed
that the surety intended to be bound only for the “indebtedness” arising out of
a specific agreement . However, the facts in Shabangu are distinguishable
from the Supreme Court of Appeal’s judgment in Panamo Properties 103 (Pty)
Ltd v Land and Agricultural Development Bank of Sout h Africa9 in which case
the wording of a bond that secured the claim was wider and provided for
8 2020 (1) SA 305 (CC) at [32] to [36]
9 2016 (1) SA 202 (SCA)
REPORTABLE JUDGMENT
payment by the debtor of “all amounts whatsoever already owed or may be
owed hereafter in terms of advances, cash, credit accounts, fixed loans,
credit, promis sory notes, loan agreements, instalment sale agreements, lease
agreements, other agreements, any facilities granted to the mortgagor.”10
[17] The wording of the fifth respondent’s suretyship is similarly broad in nature,
akin to working in Panamo. I cannot see how another court could conclude
that the explicit wording of the fifth respondent’s suretyship does not provide
for such a situation , where the claim is ceded and transferred from the original
creditor to its successor title.
[18] The settlemen t agreement in this matter relates directly to an issue or lis
between the parties and is not objectionable from a legal or practical point of
view. The settlement agreement is not at odds with public policy and
achieved a practical and legitimate advanta ge.
[19] The applicant indeed presented only in its replying affidavit the evidence of
having entered into a sale agreement with its predecessor, under which it
acquired the predecessor’s business as a going concern, including all its
assets, liabilities, and securities, which encompass the sur etyship executed by
the fifth respondent. This was, however, in response to the respondents
highlighting the discrepancy between the description of the applicant and that
of its predecessor as a basis for opposition. The fact remains that the
applicant (not its predecessor) and the respondents concluded the settlement
agreement. This settlement agreement forms the foundation of the applicant’s
claim and serves as a valid cause of liability, encapsulated in the express
wording of the fifth respo ndent’s suretyship.
[20] In the premises , there is no reasonable prospect of another Court coming to a
different conclusion on the totality of the evidence before the Court or as a
matter of law.
10 Panamo at [41]
REPORTABLE JUDGMENT
[21] The Court cannot enquire into details that fall outside the sco pe of the
pleadings or the admitted facts. The grounds of appeal and the argument
presented do not demonstrate that the legal issues raised are of substantial
importance or of public importance. There is no compelling reason why an
appeal should be heard or that it is necessary to attain legal certainty
regarding these issues.
COSTS
[22] At the commencement of the proceedings , both Counsels requested me by
agreement to correct a patent error in the judgment handed down on 19
November 2024 and the order issued consequently by the registrar on 21
November 2024 regarding the Scale of costs recorded in paragraph 4 to
provide for costs on Scale A instead of Scale B. I will grant an order
accordingly.
[23] The following order is granted:
[23.1] The Court corrects the patent error in paragraph 4 of the order at the
end of the judgment handed down on 19 November 2024 and the
subsequently issued order, dated 21 November 2024 , to provide for
costs on Scale A instead of Scale B .
[23.2] The application for leave to appeal is dismissed.
[23.3] The respondents are ordered to pay the costs of the application for
leave to appeal on Scale A.
VAN DEN BERG, AJ
For applicant : Adv A Newton
REPORTABLE JUDGMENT
BPD Inc
For respondents : Adv L Wilkin
R Allom Attorneys