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[2020] ZASCA 182
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Wilke NO and Others v Griekwaland Wes Korporatief Ltd (1327/2019) [2020] ZASCA 182 (23 December 2020)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Not Reportable
Case
no: 1327/2019
In
the matter between:
CHARL
DANIEL WILKE
NO FIRST
APPELLANT
THERESA
WILKE
NO SECOND
APPELLANT
T
ROOS INDEPENDENT TRUSTEE (EDMS)
BPK THIRD
APPELLANT
and
GRIEKWALAND
WES KORPORATIEF
LTD RESPONDENT
Neutral
citation:
Wilke NO & Others v
Griekwaland Wes Korporatief Ltd
(1327/2019)
[2020] ZASCA 182
(23 December 2020)
Coram:
NAVSA, MOCUMIE, SCHIPPERS and DLODLO JJA and
LEDWABA AJA
Heard
:
11 November 2020
Delivered
:
This judgment was handed down electronically by circulation
to the parties’ legal
representatives by email. It has been published on the website
of the Supreme Court of Appeal and
released to SAFLII. The date and time for
hand-down
is deemed to be 10h00 on 23 December 2020.
Summary:
Civil
procedure – action by creditor based on acknowledgement of debt
which related only to arrears – judgment in favour
of debtor on
basis that amount of indebtedness not established – subsequent
claim by debtor and surety for cancellation of
surety bond –
given as security for debt – creditor claiming entitlement to
security on basis of underlying original
causes of debt –
acknowledgment of debt reserving creditor’s rights in relation
to original causes or finance
agreements – whether
creditor precluded by
res
judicata
or issue estoppel – not same relief on same ground ––
appeal dismissed.
ORDER
On
appeal from:
Free State Division of the
High Court, Bloemfontein (Daffue J sitting as court of first
instance):
The appeal is dismissed with costs
including costs consequent upon the employment of two counsel.
JUDGMENT
Dlodlo JA (Navsa, Mocumie and
Schippers JJA and Ledwaba AJA
concurring):
[1]
The appellants
are the trustees of Wilke Boerdery
Trust (the Trust). In February 2019 they launched an application in
the Free State Division of
the High Court, Bloemfontein (the high
court), for an order directing the respondent, Griekwaland Wes
Korporatief Bpk (GWK), to
cancel a surety bond registered in its
favour in 2003, over two farms in Jacobsdal in the Free State
Province (the surety bond).
The surety bond was registered by Mr
Charl Daniel Wilke (Wilke), and Henque 4335 CC (Henque) as security
for goods sold and delivered,
production credit granted and monies
lent and advanced by GWK to them in the amounts of R 4 million
(Wilke) and R 1 million (Henque),
in respect of their farming
operations. The Trust had bound itself to GWK as surety and
co-principal debtor in a total amount of
R 5 million, for the due
fulfilment of the obligations by the principal debtors, Wilke and
Henque.
The high
court (Daffue J) dismissed the application with costs and held that
the Trust remained bound as surety to GWK under the
surety bond. The
appeal is with its leave.
[2]
Since August 2004, GWK extended
credit to Henque and Karob Boerdery (Pty) Ltd (Karob), formerly known
as CD Wilke Boerderye, pursuant
to numerous credit agreements (the
principal agreements). In March 2005, Wilke applied to GWK together
with Henque and Karob to
have the debts owing to GWK consolidated in
a single account in the name of Karob. GWK approved the request on
the express condition
that notwithstanding the consolidation of the
subject debts, all securities granted by Wilke and Henque would
remain in place in
securitisation of the liability to be assumed by
Karob. It is common cause that Wilke, Henque and Karob were amenable
to such request
and condition being imposed.
[3]
With effect from March 2005, the
debt owed to GWK by Wilke and Henque at the time were consolidated
with the debt of Karob, which
assumed liability for those debts to
GWK. Payments thereof by Karob to GWK remained secured by special
notarial bonds registered
in favour of GWK by Wilke in 2000 and
Henque in 2003, to secure their indebtedness to GWK, ‘pursuant
to any cause whatsoever’.
Thereafter, only Karob contracted
with GWK.
[4]
In breach of numerous credit
agreements and the debt consolidation, Karob failed to make payment
to GWK. As at January 2006 it was
in arrears in an amount of R4 831
873.05, and its total contractual indebtedness to GWK was
R12, 787, 871.82. These
amounts were recorded in an
acknowledgement of debt (AOD) which Wilke executed on behalf of Karob
on 26 January 2006. In terms
of the AOD, Karob undertook to pay the
arrears of R4 831 873.05 to GWK as follows: equal monthly
instalments of R300, 000.00
from January to December 2006, and a
payment of R1, 500, 000.00 on or before 31 August 2006 from the
proceeds of Karob’s
summer crop harvest. Wilke bound himself as
surety and co-principal debtor for the due and punctual performance
of Karob’s
obligations under the AOD. An appendix to the AOD
recorded the manner of calculation of the aggregate amount alleged to
be outstanding,
with reference to 21 underlying credit agreements
that were extant at the time of the signing thereof.
[5]
The AOD did not novate GWK’s
prior principal claim against Karob. Clause 11.1 reads (my
translation):
‘
The
parties record that this acknowledgement of debt is not a novation of
the creditor’s original claim against the debtor,
that it does
not constitute a waiver of any of the rights of the creditor,
including its right, without notice, upon the original
failure to
comply with the terms and conditions of this acknowledgement of debt,
in its sole discretion to institute legal proceedings
in terms of the
acknowledgement of debt or the original cause of action.’
[1]
The AOD also contained an acceleration
clause:
‘
If
the debtor fails to make any payment in terms of this acknowledgement
of debt on the payment date, the creditor, in its sole
discretion,
shall be entitled to:
.
. .
recover
the full balance of the principal debt and finance costs outstanding
on the date of the breach or failure, without it being
necessary for
the creditor to inform the debtor of this.’
[2]
[6]
Karob however breached its payment
obligations under the principal agreements, the debt consolidation
and the AOD. By 10 April 2007
it was in arrears in the sum R5 025
458.37. Consequently, in a letter of demand dated 10 April 2007, GWK
invoked the acceleration
clause in the AOD and claimed payment from
Karob in the sum of R11 655 499.84 before 24 April 2007. Of this
amount, R4 226 302.45
constituted the debt owed to GWK by
Henque, which Karob had assumed in terms of the debt consolidation.
Thereafter, Karob made
payments and credits were passed on its
outstanding indebtedness, so that by 1 July 2009 it owed GWK an
amount of R 7 001 793.90.
[7]
On 11 September 2009 GWK issued a
provisional sentence summons in the high court against Karob and
Wilke for payment of the sum
of R 7 001 793.90, based
entirely on the AOD. On 19 September 2009 the court granted judgment
against Karob and
Wilke, jointly and severally, in an amount of
R1 917 165.80, together with interest. The order provided, inter
alia (my translation):
‘
2.
This order is without prejudice to any rights which the plaintiff
might have to recover further amounts in terms of the present
acknowledgement of debt in these proceedings and in accordance with
paragraph 3 hereof.
3.
Regarding the remainder of the plaintiff’s claim in terms of
the acknowledgement of debt, it is ordered that the provisional
sentence summons shall remain as a simple summons, it is deemed that
an appearance by the defendants has been entered and that
the
proceedings will take place in accordance with the rules of
Court.’
[3]
[8]
On 5 July 2010 GWK delivered its
declaration in respect of the action. Where appropriate, I refer to
this claim as ‘the 2009
action’. Karob was finally
deregistered on 16 July 2010 for want of filing its annual returns.
On 8 September 2010, Wilke
and Karob (despite the deregistered status
of Karob), delivered their plea. Further payments were received by
GWK in the amount
of R3 million and R435, 690.77 on September 2010
and 21 April 2011, respectively. The matter proceeded to trial. On 13
August 2015,
the high court (Kruger J) handed down judgment and
dismissed GWK’s action, essentially on the basis that GWK had
failed to
prove the arrear amounts owed in terms of the AOD.
[9]
Kruger J’s findings were as follows.
The form and content of the AOD established that it dealt only with
payment of the arrears.
The AOD did not refer to payment in
instalments (‘afbetalingspaaiemente’) for the full
principal debt and did
not contain an interest rate and was therefore
unusual. It referred to the different interest rates in the various
(underlying)
contracts. Failure to pay in terms of the AOD meant that
GWK was entitled to claim the full outstanding amounts owed to it in
terms
of the underlying contracts referred to in clause 11 of the
AOD. (1/96/22). Ultimately, GWK failed to establish the applicable
rate of interest and the amount owed by the Trust in terms of the
AOD.
[10]
GWK was granted leave to appeal to a full
court of the high court. The full court (Moloi and Reinders JJ and
Zietsman AJ) held that
GWK had decided to institute legal proceedings
in terms of the AOD and not the original causes of action or accounts
referred to
in annexure A to the AOD. Had it instituted action in
terms of the latter causes of action, the full court found, there
could have
been no doubt about what interest could be charged, on
what account from what date, and whether or not interest could be
capitalised.
The full court however, concluded that Kruger J was
correct to hold that the amount of indebtedness in terms of the AOD
had not
been established. The full court noted that although Kruger J
had dismissed GWK’s claim with costs, the proper order ought
to
have been one of absolution from the instance. It did not consider
that to be a sufficient basis to interfere with the order
made by
Kruger J. Subsequently, this Court refused an application by
GWK for special leave to appeal against the judgment
of the full
court.
[11]
In his judgment,
Daffue
J emphasised that the AOD was not a novation of the original debts or
underlying credit agreements and that GWK had expressly
retained the
right to sue the respective debtors on the original and underlying
credit agreements. Daffue J had regard to
the finding of Kruger
J that the parties to the AOD intended to deal only with the arrears.
[12]
Daffue J held that there was no
indication that GWK, in pursuing an action based on the AOD,
abandoned its other remedies. Dealing
with res judicata and issue
estoppel, the judge noted that neither the Trust nor Henque had been
cited as a party in the 2009 action
and that the same relief on the
same ground had not been finally adjudicated by Kruger J. The court
found that GWK was not asserting
the same subject matter as a basis
for holding onto its security, under the guise of a different cause
of action.
[13]
The deregistration of Karob meant that the proceedings before Kruger
J and his dismissal of GWK’s claim and the outcome
of the
appeal are null and void as against Karob. Daffue J, on the authority
of
Traub v Barclays National Bank; Kalk v Barclays National Bank
1983 (3) SA 619
(A) held that the deregistration of Karob however,
did not prevent GWK, as creditor, from proceeding with an action
against the
Trust, on the underlying credit agreements. As is evident
from the surety bond, the Trust remains bound as surety to GWK in
respect
of Wilke and Henque’s indebtedness to it, regardless of
whether Karob’s registration as a company will be restored.
[14] Counsel for
the Trust argued that the high court was incorrect to hold that GWK
could proceed against the debtors based on
the original and
underlying credit agreements. GWK could sue for the total debt based
either on the AOD, or the underlying credit
agreements. It was
submitted that GWK chose the former to the exclusion of the latter to
its detriment, as shown by clauses 5 and
11.1 of the AOD. Absent an
amendment, whilst the 2009 action was pending, to incorporate a claim
based on the underlying credit
agreements, so it was argued, it was
not open to GWK to rely on a different ground to claim the same
thing. In terms of the ‘once
and for all’ rule, all
claims generated by the same cause of action had to be instituted in
one action (
National Sorghum Breweries
Ltd t/a Vivo African Breweries v International Liquor Distributors
(Pty) Ltd
[2000] ZASCA 159
;
2001 (2) SA 232
(SCA) at
241D-E).
[15]
It was further
argued on behalf of the Trust that the high court erred in rejecting
their submission that the outcome of the 2009
action rendered any
claim based on the principal agreements
res
judicata
, or that the latter claim was
precluded by issue estoppel, because neither the Trust nor Henque was
a party to the 2009 action
based on the AOD. Although no cause of
action was pleaded against them, nor relief sought from them, a
surety is regarded as the
‘same party’ for purposes of a
res judicata
plea (
Aon South Africa (Pty) Ltd v Van
den Heever NO and Others
2018 (6) SA 38
(SCA) para 27).
[16] This Court
in
Transalloys v Mineral-loy
[2017] ZASCA 95
para 22, with
reference to
Prinsloo NO & others v Goldex
15 (Pty) Ltd
and Another
[2012] ZASCA 28
;
2014 (5) SA 297
(SCA) (para 10),
described
res judicata
and issue estoppel as follows:
‘
The
expression of ‘res judicata’ literally means that
the
matter has already been decided.
The gist of the plea is that the matter or question raised by the
other side had been
finally
adjudicated upon in the proceedings between the parties
and that it therefore cannot be raised again. According to Voet
24.1.1, the exceptio was available at common law if it were shown
that the judgment in the earlier case was given in a
dispute
between the same parties,
for the
same relief
on the
same ground
or on the
same cause
(idem actor, idem res et eadem causa petendi) . . . In time the
requirements were, however, relaxed in situations which gave rise
to
what became known as issue estoppel. This is explained as follows by
Scott JA in
Smith v
Porritt and others
2008 (6) SA 303
(SCA) para 10:
“
Following
the decision in
Boshoff
v Union Government
1932
TPD 345
the ambit of the
exceptio
rei judicata
has over the years been extended by the relaxation in appropriate
cases of the common law requirements that the relief claimed
and the
cause of action be the same (
eadem
res
and
eadem
petendi causa
)
in both the case in question and the earlier judgment. Where the
circumstances justify the relaxation of these requirements those
that
remain are that the
parties
must be the same
(
idem
actor
)
and that the
same
issue
(
eadem
quaestio
)
must arise. Broadly stated, the latter involves an inquiry whether an
issue of
fact
or law was an essential element of the judgment on which reliance is
placed. Where the plea of res judicata is raised in the
absence of a
commonality of cause of action and
relief claimed it has become common place to adopt the terminology of
English law and to speak of issue estoppel. But, as was stressed
by
Botha JA in
Kommissaris
van Binnelandse Inkomste v Absa Bank BPK
1995
(1) SA 653
(A) at 669D, 670J-671B, this is not to be construed as
implying an abandonment of the principles of the common law in favour
of
those of English law; the defence remains one of
res
judicata
.
The
recognition of the defence in such cases will however require careful
scrutiny. Each case will depend on its own facts and any
extension of
the defence will be on a case by ase basis.
(
KBI
v Absa Bank
supra
at
670E-F.) Relevant considerations will include questions of equity and
fairness, not only to the parties themselves but also to
others.”’
(Emphasis
added.)
[17] In the
present case, even if one were to accept generously, in favour of the
appellants, that the parties in the earlier and
subsequent litigation
were essentially the same, in order to raise res judicata
successfully the appellants must still establish
that ‘the same
relief on the same ground or on the same cause’ was claimed by
GWK, to justify holding onto its security.
In
Aon
this court
said the following (at para 22):
‘
As
mentioned earlier the plea of res judicata in this case takes the
attenuated form commonly referred to as issue estoppel. Res
judicata
deals with the situation where the same parties are in dispute over
the same cause of action and the same relief, and
in the form of
issue estoppel arises:
“
Where
the decision set up as a res judicata necessarily involves a judicial
determination of some question of law or issues of fact,
in the sense
that the decision could not have been legitimately or rationally
pronounced by the tribunal without at the same time,
and in the same
breath, so to speak, determining that question or issue in a
particular way, such determination, though not declared
on the face
of the recorded decision, is deemed to constitute an integral part of
it as effectively as if had been made so in express
terms.”
‘
(Citations
omitted).
[18] In
Evins
v Shield Insurance Co Ltd
1980 (2) SA
814
(A) at 825G, Corbett JA stated that ‘cause of action . . .
is ordinarily used to describe the factual basis, the set of material
facts, that begets the plaintiff’s legal right of action’.
In deciding whether the same relief is being sought on the
same
ground, the starting point is ‘to compare the relevant facts of
the two cases upon which reliance is placed for the
contention that
the cause of action (in the extended sense of an essential element)
is the same in both’ (
Janse Van
Rensburg NO v Steenkamp
[2008] ZASCA
para 25).
[19] Applied to the
present case, it is clear that GWK in the 2009 action, did not claim
the same thing on the same ground. As stated
earlier, its claim in
that action was founded on the AOD, and then only for payment of the
arrears. That much is clear from both
the judgments of Kruger J and
the full court. Those judgments themselves distinguish between GWK’s
cause of action based
on the AOD and its causes of action based on
the principal agreements. Indeed, Karob and Wilke defended the 2009
action on the
basis that only the arrears of R 4 831 873.05
were due to GWK; that Wilke had already paid that amount; and that
the difference between the sum of R 12 787 871.82 in the AOD and the
arrears, was not due to GWK under the AOD but by reason of
various
other causes of action (‘uit hoofde van verskeie ander
skuldoorsake’). (2/395/3.3-3.5)
[20] The contention
that GWK elected to sue on the AOD to its detriment, is both
opportunistic and wrong. The execution of the AOD,
the breach of
which created a distinct cause of action, did not extinguish the
principal agreements between the parties. These
agreements retained
their independent existence after the conclusion of the AOD. Even if
the action based on the AOD, which was
restricted to claiming the
arrears, was not successful, nothing precluded GWK from resorting to
the causes of action in terms of
the original principal agreements.
It expressly reserved the right to do so in clause 11.1 of the AOD.
And there is nothing to
suggest that GWK waived this right.
[21] Furthermore, a
party may choose any one of the several legal avenues available to
it. If it chooses to pursue sustainable relief
that would not
necessarily mean that such a party has abandoned the other. Seeking
payment of arrears in terms of the AOD can hardly
be said to exclude
a claim for the amounts outstanding in terms of the underlying credit
agreements. More so, since that right
has been expressly reserved it
must also be borne in mind that in essence Kruger J found that the
amount of the arrears owing at
the time had not been proved.
[22]
For the reasons aforesaid the appeal is dismissed with costs,
including the costs consequent upon employment of two counsel.
______________________________
DV DLODLO
JUDGE
OF APPEAL
Appearances
For
appellants: S Grobler SC
Instructed
by: JA Botha Attorneys, Bethlehem
McIntyre
Van Der Post, Bloemfontein
For
respondent: W Luderitz SC and P Lourens
Instructed
by:
Werksmans
Attorneys
, Sandton
Symington & De
Kok, Bloemfontein.
[1]
Clause 11.1 of the AOD reads:
‘
Die
partye plaas op rekord dat hierdie skuldbewys nie ’n novasie
van die skuldeiser se oorspronklike eis teen die skuldenaar
is nie,
dat dit nie afstandoening van enige van die regte van die skuldeiser
insluitende sy reg om sonder kennisgewing met die
oorspronklike
versuim om die bepaling en voorwaardes van hierdie skuldbewys na te
kom sal die skuldeiser geregtig wees om in
sy uitsluitlike diskresie
geregtelike stappe in te stel kragtens die skuldbewys of die
oorspronklike skuldoorsaak’.
[2]
Clause 5 of the AOD reads:
‘
5.
Indien die skuldenaar nalaat om enige betaling ingevolge hierdie
skuldbewys op betaaldatum te maak, sal die skuldeiser, in
sy
uitsluitlike diskresie, geregtig wees om:
5.1.1
. . .
5.1.2
die volle saldo van die hoofskuld en finansieringskoste uitstaande
op die datum van verbreking of versuim te verhaal sonder
dat dit
nodig is dat die skuldeiser die skuldernaar hieromtrent in kennis
stel;’
[3]
The
order read:
2.
Hierdie bevel is sonder benadeling van enige regte wat die Eiser mag
hê om verdere bedrae ingevolge die onderhawige skuldbewys
te
verhaal in hierdie verrigtinge en wel ooreenkomstig paragraaf 3
hiervan.
3.
Wat
betref
die restant van die Eiser se vordering ingevolge skuldbewys word
beveel dat die
voorlopige
vonnis
dagvaarding bly staan as enkelvoudige dagvaarding dat geag word dat
verskyning deur die Verweerders aangeteken is en dat
die verrigtinge
verder ooreenkomstig die hoofreëls geskied.’