JUDGMENT – WRIGHT J
1. The applicant, Fedgroup lent money to the first respondent, Meade. The second to
eighth respondents bound themselves as sureties to Fedgroup for the
indebtedness of Meade to Fedgroup.
2. Fedgroup, armed with standard form agreements, with lots of small print in its
favour seeks judgment for the unpaid lendings, interest and costs.
3. Meade resists.
4. It says that it did not contract with Fedgroup but with an entity called Prospertec.
The written agreement, headed “ Fedgroup “ shows that the Meade contracted with
“ Prospertec (Pty) Ltd T/A Fedgroup Private Capital “. There is an allegation in the
founding affidavit that Prospertec changed its name to that of the cited applicant.
This defence gains no traction.
5. There is a bald allegation that the suretyships were signed as a result of
misrepresentation. This defence holds no water, particularly when considered with
the gist of the defence as set out below.
6. It is alleged that the National Credit Act 34 of 2005 applies and that Fedgroup has
not complied with its provisions. From the large sums of money alleged by Meade
to be involved, particularly relating to its turnover, it is clear that the Act is not
applicable.
7. The gist of the defence is that Meade is a property developer. It was allegedly
approached by a company, apparently in the Fedgroup stable, with a view to
lending Meade money so that Meade could proceed with the development of
certain land. It is alleged that the loan in question was but one of many between
Fegroup and entities related to Meade. It is alleged that the loan in question must
be considered in context. It is alleged that Fedgroup would provide a large sum or
sums so that all developments in Meade and its related entities could proceed. It
was envisaged that repayment would be once the developments were complete
and all units sold. Alternatively, repayment could be in the form of profit share. If
necessary, repayment would be once alternative funding could be obtained.
necessary, repayment would be once alternative funding could be obtained.
8. The bottom line of the defence is that the context shows, and it was therefore
agreed, notwithstanding the written agreement, that if push came to shove,
Fedgroup could not recover unless all units were sold or “ if and when “ alternative
funding was obtained by Meade.
9. Numerous emails between Fedgroup and Meade reveal that the above ideas were
set out in correspondence before and after the conclusion of the agreement. There
is no email from Fedgroup in which it agreed to the bottom line as suggested by
Meade.
10. It would have been surprising to read that Fedgroup agreed that, at the end of the
day, repayment need only be made if Meade could find alternative funding.