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[2026] ZAGPJHC 437
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Nedbank Limited v Providence Property Investments (Proprietary) Limited and Others (113122/2025) [2026] ZAGPJHC 437 (24 April 2026)
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IN THE HIGH COURT OF
SOUTH AFRICA
(GAUTENG DIVISION,
JOHANNESBURG)
Case
Number: 113122/2025
REPORTABLE:
NO
OF INTREST TO OTHER
JUDGES: NO
REVISED: NO
NEDBANK
LIMITED
APPLICANT
AND
PROVIDENCE PROPERTY
INVESTMENTS
FIRST RESPONDENT
(PROPERIETARY) LIMITED
(Reg No: 2021/495523/07)
MARK VAN
HOUTEN
SECOND RESPONDENT
VERACITY INVESTMENT (PTY)
LTD
THIRD RESPONDENT
(Reg No: 2019/365380/07)
JUDGMENT
MAKUME,
J
:
Introduction
.
1.
In this matter, the
applicant seeks an order against all three respondents for payment of
an amount of money set out in the notice
of motion as well as in the
founding affidavit and the heads of argument.
2.
In particular, that
liability of the second and third respondents be limited to an amount
of R15 million plus costs. The liability
of the first
respondent is fixed at an amount of R36 million in terms of a written
loan agreement.
3.
The liability of the
second and third respondents arises out of written guarantees in
terms of which they each bound themselves
irrevocably and
unconditionally jointly and severally as principal obligors for the
punctual performance by the first respondent
of all its obligations
under the written loan agreement.
Background
facts
.
4.
It is common cause and
not in dispute that on or about the 22
nd
day of September 2023 and in Johannesburg the applicant and the first
respondent concluded a written loan agreement in terms of
which the
applicant advanced an amount of R36 million to the first respondent
for purposes of acquiring certain shares held by
Nedbank in a company
called Manappu Investments.
5.
On the same day, the
second and third respondents executed guarantee agreements binding
themselves as guarantors irrevocably and
unconditionally jointly and
severally as principal obligors and not merely as sureties for the
indebtedness of the first respondent
to the applicant.
6.
In terms of the
agreement, the amount loaned was repayable in monthly instalments.
The first respondent breached the agreement
and as on 16 January 2025
was in arrears, this resulted in the applicant sending a letter of
demand in which it was indicated that
failure to pay the instalments
of R8 million within 7 days, the applicant will institute action to
claim the balance due in the
amount of R36 356 007,58.
7.
The respondent did not
make good on their default.
As
a result, the applicant attorneys addressed a second letter of demand
to the respondents on 19 March 2025 claiming payment of
the balance
stated above.
8.
On 15 July 2025 the
applicant instituted these proceedings and is claiming payment of the
sum of R34 821 309,71 save that
the second and third
respondent's liability is limited to an amount of R15 million.
9.
On 22 October 2025 the
respondents filed an answering affidavit deposed to by the second
respondent, Mr Mark Van Holden duly authorized
and he raised the
following defenses.
9.1.
Firstly, that the
application is premature.
9.2.
Secondly, that the
claim is unenforceable as against the second respondent for want of
compliance with the
National Credit Act 34 of 2005
.
9.3.
That the matter should
be mediated as prescribed by Rule 41(A) of the Uniform Rules.
9.4.
That enforcement of the
agreement by Nedbank is unfair and unreasonable in the given
circumstances and thus offends public policy
and should not be
countenanced.
10.
Clearly the defenses
raised firstly do not dispute the existence of the loan agreement nor
the guarantee. Secondly, the respondents
do not dispute the
quantum of the amount lent and advanced. I now deal hereunder
with the purported defenses.
The
premature defense
.
11.
The respondents
say that the value of the ceded shares in Manappu is approximately
R260 million which amount is more than the loan
agreement, therefore
the applicant should first sell the ceded shares and not proceed with
this action. This defense is negated
by the provisions of
clause 14.5 of the loan agreement which reads as follows:
“Variation, no addition to or variation,
consensual
cancellation or novation of this agreement and no waiver of any right
arising from this agreement or its breach or termination
shall be of
any force or effect unless reduced to writing in paper-based form and
signed by all the parties or their duly authorized
representatives”.
12.
By bringing up this
defense of premature the respondents clearly seek to avoid the
provisions of the loan agreement. The absurdity
of this defense
is exposed for what it is by what Van Houten alleges in paragraphs 5
to 10 of his answering affidavit in which
he says the following:
“
The
property market was however significantly impacted by the Coronavirus
pandemic in 2020. The shareholders including the
applicant thus
agreed to retain the units until the market improved.
This
necessarily meant that repayment to the applicant was deferred or
postponed.”
13.
The anomaly about this
unfounded allegation is that the loan agreement was concluded in the
year 2023 by which time the COVID-19
was history. Therefore it
is surprising why would the applicant agree to defer payment of a
non-existent loan agreement.
14.
Besides what I have
alluded to above this alleged agreement to defer payment is just
thrown in. There are no details as to
when, where or by whom
representing the parties was the alleged deferment agreement
concluded.
Non-compliance
with the
National Credit Act
>.
15.
This is a
defense raised by Van Houten, the second respondent, who maintains
that Nedbank failed to conduct a proper credit assessment
on him in
contravention of Section 81 of the NCA Act and thus entered into a
reckless agreement with Van Houten, besides failing
to comply with
Section 129 of the NCA before issuing the present application.
16.
Once more, there is no
merit in this defense. Firstly because the loan agreement was
concluded with a juristic person whose
net asset value at that time
exceeded the threshold value determined by the minister in terms of
Section 7(1) of the NCA which
makes it a large agreement as described
in Section 9(4) of the NCA.
17.
Secondly the guarantee
signed by Van Houten is not a credit guarantee as defined in Section
1 of the NCA read with Section 18(5)
thereof. In terms of the
loan agreement no loan or credit was granted to Van Houten. His
reliance on letters credit
granting is an afterthought and falls to
be dismissed.
The
mediation defense Rule 41(A)
.
18.
It is indeed correct
that on receipt of the application the respondent requested mediation
which was declined by the applicant.
There
is in the rules nothing that compels Nedbank to subject this claim to
mediation. The respondent failed and breached a commercial
transaction.
The
non-fulfillment of conditions precedent
.
19.
In paragraph 55 of the
answering affidavit the respondent says this is so far as applicant
contends that a condition precedent was
not fulfilled then the sale
agreement in respect of the shares did not come into effect.
The respondent did not set out precisely
which condition precedent
was never fulfilled. Paragraph 30 of the founding affidavit
refers to the sale agreement in which
is set out a number of
conditions precedent. In any case whether any of the
condition’s precedent was fulfilled or
not it is immaterial
because applicants delivered and the respondent accepted the benefits
arising of their loan agreement.
In any case clause 3.4 of the
sale agreement reads that non-fulfillment of any condition precedent
does not cause the sale agreement
to lapse.
The
public policy defense
.
20.
This defense is raised
for the first time in the heads of argument as a result applicant
never had an opportunity to deal with it
in its replying affidavit.
However it seems to be a defense aligned to and piggybacks on the NCA
defense of reckless credit granting.
21.
Van Houten argues that
Nedbank enforcement of payment of fifteen (15) million personal
liability under the circumstances is contrary
to public policy.
22.
There is once more no
merits in this argument. It was not necessary for Nedbank to do
a credit check on a person signing a
guarantee.
It
was sufficient for Nedbank to satisfy itself in respect of the
company Providence. Money was lent to Providence, not to
Van
Houten.
23.
Van Houten's argument
that Nedbank's relief is disproportionate to legitimate commercial
objectives seeks indirectly to attack the
principle of
pacta
sunt servanda
,
which means agreements must be kept.
24.
In the matter of
Beadica 231cc and others versus Trustees Oregon Trust 2020 (5) SA 247
CC the Constitutional Court concluded that
“
the
protection of the sanctity of contracts is thus essential for the
achievement of the constitutional vision of our society.
Indeed, our constitutional project will be imperiled if courts denude
the principle of
pacta
sunt servanda
.”
25.
The applicant has made
out a case and deserves to be granted an order as prayed for.
In the result, I make the following order.
Order
.
1.
Judgment is granted in
favor of the applicant against the first, second and third
respondents jointly and severally, the one paying
the others to be
absolved, subject to the liability of each of the second and third
respondents being limited to the sum of 15
million plus costs in
terms of 1.3 as follows:
2.
Payment of the amount
of R34 821 309,71 cents.
3.
Interest on the amount
referred to in 1.1 above calculated at the rate of 16.75% per annum
from 1 June 2025 to date of
payment calculated daily on the
capital balance outstanding from time to time compounded monthly in
arrears.
4.
Cost of the
application on the attorney and client scale.
MAKUME
J
JUDGE
OF THE HIGH COURT
JOHANNESBURG
Appearance
For
the Applicants:
Adv
PT Rood SC
Instructed
by:
Lowndes
Dlamini Inc
For
the Respondent :
Adv
R Bhima
Instructed
by:
Swanepoel
Van Zyl Inc