REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, JOHANNESBURG
Case Number: 2021/52340
In the matter between: -
ASCOR TRADING CC
Reg Number 2006/067185/23 1
st Applicant / 1st Defendant
GONASAGREE MATHURA
Identity Number 8[…] 2nd Applicant / 2nd Defendant
and
SASFIN BANK LIMITED Respondent/Plaintiff
Reg Number 1951/002280/06
__________________________________________________________________
JUDGMENT
Van Aswegen AJ
INTRODUCTION:
[1] In this matter, the Applicant s are the Defendants in the main action, while
the Respondent is the Plaintiff. For ease of reference, the parties will be
referred to as the Plaintiff and the Defendants, respectively.
(1) REPORTABLE: YES / NO
(2) OF INTEREST TO OTHER JUDGES:
YES/NO
(3) REVISED: YES/NO
__________ _________________________
DATE SIGNATURE
2
[2] The Defendants launched a Rescission application ("the application")1 of a
Default Judgment granted in favour of the Plaintiff on 5 May 2022 ("the
judgment").2
[3] The order granted against the Defendants was in the following terms:
1. Delivery to the Plaintiff of the following vehicle:
1 x new Toshiba E -Studio 2010 AC Colour Copier
with serial number C[…] ;
2 Payment of R181 308.93;
3 Interest on the aforesaid amount at the rate of prime
plus 5% from 16 October 2021
to date of final
payment;
4 Costs of suit as between attorney and client scale.3
CAUSE OF ACTION AND FACTUAL MATRIX:
[4] The cause of action in the main action was based on the breach of a rental
agreement entered into between Kago Finance (Pty) Ltd (reg:
2002/013147/07) (“Kago”) and the First Defendant in terms whereof Kago
rented to the First Defendant, who hired from Kago , for a period of 60
months the following:
• 1 X NEW TOSHIBA E-STUDIO 2010 AC COLOUR COPIER with serial
number C[…] . 4
GUARANTEE
1 Case Lines 12.2.1
2 Case Lines 22-1
3 Case Lines 12.2-23
4 Case Lines 02-28
3
[4] The Second Defendant signed an unlimited written deed of guarantee5 in
terms of which she bound herself as guarantor and co- principal debtor with
the First Defendant, jointly and severally, in favour of Kago or its
cessionary/ies, in the event of a cession of whatsoever nature or
howsoever arising, for the due and proper fulfilment of all the obligations of
the First Defendant arising from or out of the terms of the Master Rental
Agreement between the First Defendant and Kago and all and any other
indebtedness to Kago, whether actual or contingent present or future and
howsoever arising.
CESSION KAGO AND SUNLYN
[5] On or about 21 May 2014 and at Randburg, Kago and Sunlyn (Pty) Ltd
(formerly known as: Sunlyn Rentals (Pty) (Registration Number:
1988/000147/07) ("Sunlyn"), concluded a written Main Cession Agreement
(the Main "K ago" Cession Agreement) in terms whereof Kago, inter alia ,
ceded existing and future rental agreements to Sunlyn.
6
[5.1] Subsequent to the Master Rental Agreement being concluded
Kago's right, title and interest to and in the Master Rental
Agreement were ceded to Sunlyn as per the provisions of the
Main "Kago" Cession Agreement.
CESSION SUNLYN AND SASFIN
[6] On or about 29 March 2006 and at Waverley, Sunlyn and Sasfin Bank
Limited (Registration Number: 1951/002280/06) ("the Plaintiff'), concluded
a written Main Cession Agreement and an Addendum thereto (the Main
Cession Agreement and addendum thereto - hereinafter collectively
5 Case Lines 02-31
6 Annexure SAS3 at 02-36
4
referred to as the Main "Sunlyn" Cession Agreement), in terms whereof
Sunlyn, inter alia, ceded existing and future rental agreements to the
Plaintiff. ("the Main "Sunlyn" Cession Agreement")7.
[7] Sunlyn and the Plaintiff fulfilled all their respective obligations as per the
Main "Sunlyn" Cession Agreement and subsequently Sunlyn's right, title
and interest in the Master Rental Agreement were ceded to the Plaintiff as
per the provisions of the Main "Sunlyn" Cession Agreement.
[8] The Plaintiff acquired the right, title and interest in the Master Rental
Agreement as cessionary.
[9] The National Credit Act, Act 34 of 2005 (“NCA”) was not applicable, as the
agreement was not a lease as defined in section 1 of the NCA as read with
section 8(4)(e) thereof. The First Defendant was furthermore a juristic
person whose asset value or annual turnover, together with the combined
asset value or annual turnover of all related juristic persons, at the time the
agreement was entered into, equalled or exceeded the threshold
determined by the Minister in terms of section 7(1) of the NCA from time to
time.
[10] Kago, performed all of its obligations arising from the Master Rental
Agreement, specifically Kago purchased the Toshiba copier at the special
request of First Defendant and the copier was delivered and made
available for the use of the First Defendant.
[11] The First Defendant, however, breached the Master Rental Agreement by
neglecting and/or failing to pay all rentals due in terms of the agreement.
[12] Based upon the First Defendant’s breach of contract the Plaintiff became
entitled to claim payment of arrear rentals as well as rentals due for the
balance of the rental period, amounting to R181 308.93.
7 Annexure SAS4 at 02-38
5
[13] The claim against the Second Defendant arose as a result of the written
guarantee entered into.8
[14] The Defendants’ indebtedness was proven, as agreed to between the
parties, in clause 9 of the Terms of B usiness, by a Certificate of balance,
electronically prepared (in terms of in terms of the Electronic
Communications and Transactions Act 25 of 2002) by the Plaintiff's
Litigation manager.
9
RESCISSION APPLICATION:
[15] The Defendants’ Rescission application is brought in terms of Rule 42(1) of
the Uniform Rules of Court and the common law.
RULE 42
[16] Turning to Rule 42, rule 42(1)(a) it stipulates as follows:
(1) The court may, in addition to any other powers it may have, mero
motu or upon the application of any party affected, rescind or vary –
(a) an order or judgment erroneously sought or erroneously
granted in the absence of any party affected thereby ; (my
emphasis)
[17] When it comes to rescission under Rule 42(1)(a), a judgment is considered
to be issued in error if, at the time it was made, there was a fact unknown to
the court that would have prevented the judgment from being granted. If the
court had been aware of this fact, it would not have granted the judgment.
10
8 Case Lines 02-31
9 Annexure SAS5 at 02-43
10 Van Heerden v Bronkhorst 2020 JDR 2363 (SCA) at [10);
Lodhi 2 Properties Investments CC and Another v Bondev
Developments (Pty) Ltd 2007 (6) SA 87 (SCA)
6
COMMON LAW
[18] Under common law, an Applicant seeking rescission of a D efault Judgment
must demonstrate “good cause”. This requires the following:
"[t]he Courts generally expect an Applicant to show good cause
(a) by giving a reasonable explanation of his default;
(b) by showing that his application is made bona fide; and
(c) by showing that he has a bona fide defence to the Plaintiff's claim
which prima facie has some prospect of success."11
DEFENDANTS’ GROUNDS FOR RESCISSION
[19] The Defendants rescission grounds, as set out in their Founding Affidavit,
were categorised and stipulated as follow:
[19.1] The Defendants never received notice of the summons;
(hereafter "the service-defence")
12
[19.2] The Court lacks jurisdiction as the agreement (upon which the
judgment was based)("the agreement") was concluded in Port
Elizabeth;
(hereafter "the jurisdiction-defence"); 13
[19.3] The Second Defendant's understanding was that the agreement
had been consensually cancelled;
(hereafter "the cancellation-defence")14
[19.4] The Defendants dispute that the Plaintiff had locus standi in the
action and contend that the rights in the agreement allegedly
11 Colyn v Tiger Foods
Industries Ltd t/a Meadow Feeds Mills (Cape)
2003 (6) SA 1 (SCA) at [5] to [6]
12 Paragraph 11 at 12.2-11
13 Paragraph 13 at 12.2-11
14 Paragraph 28.3 at 12.2-17
7
vested in the Plaintiff's subsidiary, South African Securitisation
Programme (RF) Ltd;
(hereafter "the disputed cession-defence")15
[19.5] In so far as the Second Defendant is concerned, she contends
that she was misled into signing the written guarantee (in terms of
which she was held liable jointly and severally with the First
Defendant) as she was never told that she was agreeing to a
personal guarantee.
(hereafter "the misrepresentation-defence")
[20] At the outset I was informed that the Defendants aborted the cancellation
and locus standi defences (as referenced in paragraphs [19.3] and [19.4]
here in above)
[21] I will sequentially deal with and evaluate the grounds raised commencing
with the service defence.
SERVICE DEFENCE:
[22] In considering whether there was proper service of the action the following
became apparent:
[22.1] Both the Defendants had elected domicilium citandi et
executandi addresses in the Master Rental Agreement and the
Guarantee respectively.
[22.1.1] The First Defendant’s chosen domicilium address
as per the terms of business to the Master
Agreement is as set out in note ii), being the
15 Paragraphs 36 and 37 at 12.2-18
8
installation address namely 1[…] J[…] Road,
B[…] B[… ], Port Elizabeth.16
[22.2.2] The Second Defendant, as guarantor, chose the
address set out in the guarantee as per clause 11
as her domicilium address, namely 4 […] Y[…]
Road, B[…] B[…] Port Elizabeth.17
[22.2] The summons was served upon the First Defendant at its
chosen domicilium address on 12 November 2021. The Sheriff
served the summons on a person, a Mrs. Mtamo, apparently
not less than 16 years of age.18
[22.3] The summons was served on the Second Defendant at her
domicilium address on 12 November 2021 , with the Sheriff
affixing the summons
"[to] the principal door".19
[23] Both the Defendants however pleaded that the summons did not come to
their attention as they never received same.
[24] The First Defendant specifically pleaded that it had ceased trading at its
chosen domicilium address. The premises at 1[…] J[…] Road, B[…] B[…] ,
Port Elizabeth, which is owned by the Second Defendant, were occupied by
an Educational Tenant. The Second Defendant has no idea who Mrs .
Mtamo is and can only assume it was an employee of the Tenant.
[25] The First Defendant had no knowledge (and was not notified by the Tenant)
that a Summons had been served.
[26] In respect of service on the Second Defendant it is clear that her residential
address is also her chosen domicilium address. The Sheriff indicated that
he affixed copies of the documentation to the principal door as the
premises were locked.
16 Case Lines 02-50
17 Case Lines 02-49
18 Case Lines 02-47
19 Case Lines 02-48
9
[27] The Second Defendant however pleaded that it was impossible to gain
access to the principal door of the residence as there is a surrounding wall,
gate and security. It could therefore not have been left at the front gate, if at
all. She similarly did not have knowledge of the summons.
CONSIDERATION OF SERVICE DEFENCE
[28] In Twee Jonge Gezellen (Pty) Ltd v Land and Agricultural Development
Bank of South Africa t/a The Land Bank 2011 (3 SA 1 (CC) at para [57] the
Constitutional Court explained the gravity of the right to a fair hearing by
quoting De Beer N.O. v North- Central Local Council and South -Central
Local Council:
‘This section 34 fair hearing right affirms the rule of law, which is a founding
value of our Constitution. The right to a fair hearing before a court lies at
the heart of the rule of law. A fair hearing before a court is a prerequisite to
an order being made against anyone is fundamental to a just and credible
legal order.’
[29] The section 34 right necessarily includes being informed of court
proceedings and being able to participate in them; otherwise, both the text
and values it embodies would be rendered meaningless.
[30] The most basic right of a Defendant is to be informed of the proceedings
against him/her, to be apprised of the case, and to be afforded proper time
to respond to the claim and be granted the opportunity to be heard.
[31] In the matter of First National Bank of SA Ltd v Schweizer Drankwinkel
(Pty) Ltd 1998 (4) SA 565 (NCD) at 568 C - D the court referred to service
as one of the cornerstones of our legal system and that it is therefore
required that a Defendant is entitled to be informed of the process against
him/her.
10
[32] In instances where default judgment is pursued, it is required that evidence
be provided demonstrating that the D efendant has indeed selected that
address as their domicilium citandi. In this matter the election of the
Defendants’ addresses as per the Master Rental Agreement’s T erms of
Business and the G uarantee remains undisputed and apparent. Service
was effected at the said addresses.
[33] Where an individual has designated a domicilium citandi address, service
may be accomplished by delivering or leaving a copy of the relevant
process or document at the chosen domicilium.
20
[34] Service at the domicilium will be good even if it is apparent that the process
could not have come to the D efendant’s notice. The reason is that
the domicilium so chosen is regarded as the place of residence within the
meaning of the rule.21
[35] In the matter of Bowley Steels (Pty) Ltd v 10 Sterling Road (Pty) Ltd the
court, RS Willis AJ found that:
“[13] … Such service is then good, even if the process may not actually be
received, because the purpose of requiring the choice of a domicilium
is to relieve the party causing service of the process, from the burden
of proving actual receipt, hence the decisions in which service at a
domicilium has been held to be good, …” [Emphasis added]
[36] The party giving notice or serving a document need only prove compliance
with the requirements of the chosen domicilium address.
[37] On appeal, the Gauteng Division, Johannesburg in the matter of Shepard v
Emmerich (A5066/2013) [2014] ZAGPJHC 120 considered the validity of
the service of a summons at a contractually chosen domicilium citandi et
executandi.
20 Cohen v Lench 2007 JOL 19995 (SCA); 2007 6 SA 132 (SCA) par 35:
21 Muller v Mulbarton Gardens (Pty) Ltd 1972 1 All SA 190 (W) ; 1972 1 SA 328 (W) 332; Loryan (Pty) Ltd v Solarsh Tea and
Coffee (Pty) Ltd 1984 3 All SA 625 (W); 1984 3 SA 834 (W) 847; Amcoal Collieries Ltd v Truter 1990 1 All SA 248 (A)
11
[37.1] The court held that the fact that the Respondent had moved
from the domicilium address and the fact that Mr Janks had
resigned were of no moment. Therefore, if service had been
effected in accordance with the agreement, being marked for
the attention of Mr Janks and served at the 2 nd floor, proper
service would have been effected even though the summons
would not have come to the attention of the Respondent.
[38] Where an agreement contains a chosen domicilium address, service at that
address must accordingly be in accordance with the domicilium clause as
stated in the agreement for proper service to be effected. If such clause is
strictly complied with, proper service will have been effected even if the
Defendant no longer resides at the domicilium address.
[39] In Amcoal Collieries Ltd v Truter 1990 1 SA 1 (A) at 5l to 6C it was held:
“ …It is a well- established practice (which is recognised by Rule 4(1)(a) (iv)
of the Uniform Rules of Court) that, if a defendant has chosen a domicilium
citandi, service of process at such place will be good, even though it be a
vacant piece of ground, or the defendant is known to be resident abroad, or
has abandoned the property, or cannot be found." (Emphasis added)
[40] In the matter before me service was effected on the chosen domicilium
addresses as per the Master Rental Agreement and the Guarantee in terms
of Rule 4(1)(a)(iv) the Uniform Rules of Court which stipulates:
if the person to be served has chosen a domicilium citandi, by delivering a
copy thereof to a person apparently not less than sixteen years of age at
the
domicilium so chosen: Provided that if no person is present at the
domicilium,
the sheriff may leave a copy at the aforesaid domicilium;
12
[41] The Sheriff had served the summons in terms of the Uniform Rules of Court
on a person apparently not less than sixteen years of age at the domicilium
in respect of the First Defendant and by affixing in terms of the Second
Defendant when the latter was absent. In respect of the return in respect of
the Second Defendant the Sheriff indicated that he affixed the
documentation to the principal door as the premises were locked. There is
no mention made that service was effected at the front gate or at security.
The return is furthermore deemed prima facie proof of the service.
[42] The Sheriff’s service on the Defendants was proper, cannot be said to be
defective and simply cannot lead to the conclusion the order was
erroneously sought or erroneously granted.
[43] Paragraphs at 578G to 579E in Hardroad (Pty)Ltd v Oribi Motors (Pty) Ltd
1977 (2) SA 576 (W) is highly relevant:-
"This Rule [Rule 42(1)(a)] does not specifically require "good cause" or
"sufficient cause" (as in certain earlier Rules) to be shown, before a
judgment can be rescinded or varied. Paragraph (a) requires, however, that
the judgment must have been "erroneously sought" or "erroneously
granted". Examples of that sort of error that will or will not avail an applicant
are to be found in Ex parte Jooste 1968 (4) SA 437 (O); Custom Credit
Corporation (Pty) Ltd v Bruwer 1969 (4) SA 564 (D); Shield Insurance Co
Ltd v Van Wyk 1975 (4) SA 781 (NC). The only possible error that could be
suggested in the present case is that the service of the provisional
sentence summons upon the applicant was defective... ...Counsel for the
applicant ultimately virtually conceded that there had been proper service of
the summons in terms of the Rules. The order was therefore neither
erroneously sought nor erroneously granted. He suggested no other
grounds upon which the judgment had been erroneously sought or
erroneously granted. The application therefore could. not be made in terms
erroneously granted. The application therefore could. not be made in terms
of Rule 42(1)(a)." (my emphasis)
13
[44] The service provided in this instance is beyond reproach. Consequently,
this aspect of the Defendants' argument for rescission is not sustainable
and must be dismissed.
JURISDICTION DEFENCE
[45] The second basis for a rescission is the court’s alleged lack of jurisdiction.
[46] The Defendants asserts that the agreements were concluded in Gqeberha
(previously Port Elizabeth) and that the court lacked jurisdiction to entertain
the Default Judgment application and to grant an order.
[47] The Plaintiff disagreed and contended that the Master Rental Agreement
amounted to an offer by the First Defendant, which was accepted in
Randburg where Kago operated from. On that basis, the court had
jurisdiction.
[48] The foundation for the Plaintiff’s contention is based upon the trite principal
that the place where a contract is concluded is where the offer is received
and acceptance dispatched.
22 Acceptance takes place when the offeree
(the person receiving the offer) communicates their unconditional assent to
the terms of the offer, usually in writing and signs.
[49] It is clear from the Master Rental Agreement that the First Defendant was
the offeror as the agreement is framed as an offer.
[49.1] It stipulates and is apparent that the First Defendant ask “us” -
Kago Finance (Pty) Ltd, of 3 Highview Boulevard, Ferndale Ext
26, Randburg to hire to it the equipment listed in the schedule
thereto and at the Installation address as per the Terms of
Business at 1[…] J[…] Road, B[…] B[…] , Port Elizabeth.
23
22 African Banking Corporation of Botswana Ltd v Kariba Furniture Manufacturers (Pty) Ltd and others
[2015] 3 All SA 10 (SCA)
23 Case Lines 02-49
14
[50] The offer was signed by the Second Defendant, duly authorised by the First
Defendant, at Port Elizabeth on 23 January 2019. A certain Ms. Sonja van
der Merwe, the new business manager of the Plaintiff had subsequently
signed on 25 January 2019 in a block on the agreement marked “ FOR
OFFICE USE ONLY”.24
[51] It is common cause that:
[51.1] the delivery and installation of the equipment , the Toshiba
printer, was effected in Port Elizabeth prior to, or concomitant
with the Second Defendant's signature on 23 January 2019;
[51.2] the equipment was tested prior to the Second Defendant
signing the offer on 23 January 2019.
[52] The Defendants' Founding Affidavit clarifies that the supplier of the relevant
equipment, Toshiba (hereafter "the supplier"), not a party to the Master
Rental Agreement, provided the agreement to the Second Defendant. Upon
installation of the equipment, the supplier required the Second Defendant to
sign the Schedule to the agreement, thereby confirming satisfactory
installation and consenting that the cedent may proceed with payment for
the goods "[a]nd
that we may pay for the purchase of the goods."25
[53] Prior to releasing any payment to Toshiba (the supplier) the First Defendant
therefore had to confirm that:
"you state that you have received all of the goods as scheduled above and
that it is exactly what you ordered and you have tested it and found it to be
in good working order and that we may pay for and purchase the goods".
26
24 Case Lines 02-49
25 Case Lines 02-50
26 Case Lines 02-50
15
[54] The Second Defendant confirmed that the equipment was delivered,
installed and tested prior to her signing the agreement framed as an offer
on 23 January 2019.27
[55] It is of crucial importance to note that Toshiba was not a party or a
signatory to the said agreement.
[56] The only party to the Master Rental Agreement who signed on 23 January
2019 was accordingly the Second Defendant on behalf of the First
Defendant.
[57] The Defendants drew my attention to clause 17 of the Terms of Business
which states as follows:
“17. You acknowledge and agree:
17.1 That you selected and inspected the goods prior to signing this
agreement and or the schedule and are satisfied with the
goods and that they suit your purpose;
17.2 that all warranties implied by the C ommon Law are excluded
and that no representations of any nature have been made by
or on behalf of us; and
17.3 that once the Schedule to the A greement is signed by you, all
the risk in the goods pass to you.”
[58] The Defendants argued that even the risks in the goods passed to the First
Defendant upon the Second Defendant signing the Schedule to the Master
Agreement of Hire.
27 Paragraph 16 at 12.2-12
16
[58.1] The passing of risk in respect of the copier in this agreement, is
in terms of clause 17.3 of the Terms of Business, linked to the
signing of the Schedule to the agreement and not to the
conclusion of the agreement.
[58.2] Clause 17.3 in the Terms of Business to the agreement
between the parties specifically deals with t he passing of the
risk in respect of the copier. Parties can therefore stipulate
when the passing of risk in respect of goods can occur as in
the case before me.
[58.3] Additionally, the commencement date of the agreement was
agreed upon as the date of last signature of the agreement,
namely that of the Plaintiff on 25 January 2019. The date of the
passing of the risk in respect of the copier was accordingly not
the same date as when the Second Defendant signed the
Schedule to the Agreement.
[59] Accordingly, it was argued that the delivery, installation, testing and
signature by the Second Defendant all took place in Port Elizabeth and that
even the risk passed to the First Defendant upon signature of the Schedule
by the Second Defendant. The Defendants accordingly argued that:
[59.1] the entire agreement was concluded on 23 January 2019;
[59.2] by 25 January 2019 the agreement was already concluded and
the Plaintiff had nothing to accept;
[59.3] the annotation on the signature of the Plaintiff is in block titled
“OFFICE USE ONLY” and therefore of no significance and
[59.4] the agreement does not make provision for acceptance.
[60] The aforesaid argument does not hold muster and cannot be accepted
considering the following:
[60.1] the agreement is framed as an offer calling for acceptance.
17
[60.2] the Plaintiff was not present at the Installation address in Port
Elizabeth on 23 January 2025 only Toshiba – the supplier –
which was not a contracting party;
[60.3] even if the Schedule was signed and the risk of the equipment
passed to the First Defendant, the signature merely
represented an offer. The First Defendant’s offer is a firm, clear
promise to contract on specific terms which had to be accepted
by the Plaintiff. In the absence of acceptance there was no
valid and binding agreement between the parties;
[60.4] the agreement made provision for a commencement date – the
date of last signature thereof;
28 This date was the Plaintiff’s
signature on 25 January 2019.
[60.5] The first rental was due on the commencement date (date of
last signature of the agreement);
[60.6] the Plaintiff’s signature was required to establish the
commencement date of the agreement, which was only
appended on 25 January 2019.
[60.7] the Plaintiff, who was absent at Port Elizabeth on 23 January
2019, did not communicate acceptance on 23 January 2019.
[60.8] the Defendants did not plead how , where and by whom the
Plaintiff accepted the offer on 23 January 2019. Acceptance is
an unconditional, communicated agreement to the terms of the
offer. An offer and the acceptance thereof constitute the core
mechanism for forming a legally binding contract, establishing
mutual assent (consensus ad idem) between parties.
28 Case Lines 02-50 under initial rental period;
18
[60.9] the Plaintiff’s signature and the date of signature at Randburg
on 25 January 2019 cannot be of no consequence and
insignificant as each page of the Master Rental Agreement,
Schedule, Terms of Business and Guarantee was also initialled
by Ms Sonja van der Merwe on the Plaintiff’s behalf as
Business manager. The only plausible reason for her signature
and initials on each page must simply be that the offer had to
be accepted for a valid and binding agreement to come into
play.
[60.10] the Plaintiff’s written signing and initialling of each page of the
agreement is clearly indicative of a written acceptance of the
offer to establish a valid and binding agreement.
[60.11] the initial rental period was stated in the Schedule as 60 days
from the first common due date after the date of last signature
hereto (“the Commencement Date”). This is contrary to the
Defendants’ contention that the signature was merely for office
purposes and that the signature was insignificant. The first
rental payment was also due on the commencement date of
the agreement which is the date of last signature.
29
[60.12] the Master Rental Agreement was of no force and effect unless
in writing and signed by both the Plaintiff and First Defendant in
terms of clause 15 of the Terms of Business. The
commencement date was triggered by both parties’ signatures.
[61] I am of the firm opinion that the signature on behalf of the cedent ( Kago
Finance (Pty) Ltd) at Randburg on 25 January 2019 can only been seen as
acceptance of the offer. The Defendants furthermore remain silent (does
29 Clause 14 at 02-50
19
not plead) as to where , when and by whom acceptance took place on
23 January 2019.
[62] A contract is made at the place at which the signature to the last party is
affixed.30 The signature on the cedent's behalf on 25 January 2019 turned
the offer into a binding contract.31
[63] An offer made without acceptance does not create a binding contract, 32 as
legal obligation requires both parties to agree (consensus). An offer
remains just a proposal until accepted unconditionally. Without acceptance,
the offer may lapse due to rejection, counter-offer, or expiration of time.
[64] The Defendants did not plead where, how and by whom acceptance took
place on 23 January 2019.
[65] I accordingly find that the signature of the Plaintiff was required in terms of
the agreement to come into full force and effect
33 and that same took place
as per the written agreement on 25 January 2019 at Randburg. The court
accordingly had jurisdiction to deal with the matter and th e jurisdiction
defence can therefore not succeed.
MISREPRESENTATION - DEFENCE
[66] I now address the final defence relating to misrepresentation.
[67] The Second Defendant asserts that she was induced to sign the written
guarantee -pursuant to which she is held jointly and severally liable with the
First Defendant - on the basis of a misrepresentation. Specifically, she
claims that she was not informed that she was executing a personal
guarantee (hereafter "the misrepresentation defence").
30 Kergeulen Sealing & Whaling Co Ltd v Commissioner for Inland Revenue 1939
AD 487 at 503 to 504
31 Driftwood Properties (Pty) Ltd v McLean 1971 (3) SA 591 (A) at 598A.
32 African Banking Corporation of Botswana Ltd v Kariba Furniture Manufacturers (Pty) Ltd and others
[2015] 3 All SA 10 (SCA)
33 Clause 15 of both the terms of business and guarantee at 02-50 and 02-49
20
[68] According to the Second Defendant she signed the guarantee undertaking ,
without reading it, and claims that the supplier did not inform her that she
was required to agree to be personally liable.
34
[69] The Second Defendant asserts that the only place her handwriting appears
on the Master Agreement of Hire and/or the Guarantee, is where she had
signed.
[70] She states that all of the handwriting on the Master Agreement of Hire, is
either that of :
[70.1] Ms. Nadia du Plessis, who was the Account Manager of the
First Defendant at the time; and/or
[70.2] the Representative of Toshiba, who was present ; and/or
[70.3] Ms. Sonja Van Der Merwe, whose signature appears in the
block under the heading "FOR OFFICE USE".
[71] Similarly, the handwriting on the Guarantee and the Schedule to the Master
Agreement of Sale is not her handwriting. It is only her signature, but
nothing further appears on the documentation.
[72] Toshiba’s representative had handed the Second Defendant, she asserts, a
fully completed agreement. Ms Nadia du Plessis had inserted the
handwriting relating to the Defendants. All she knew was that she was
renting a copier.
[73] The Second Defendant confirms her signature on the guarantee. She
stated that she was misled into signing the document on the basis that my
signature was perfunctory on an Agreement with KAGO Finance (Pty) Ltd
(of whom she had no knowledge) for the rental of the equipment.
34 Paragraphs 43 and 44 at 12.2-20
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[74] The word “GUARANTEE” appears in bold and in larger font at the top of
the page. The page contains a number of clauses, in a relatively small font,
although by no means illegible.
[75] Below the word GUARANTEE in a separate block is the following
recommendation printed and easy to read:
“It is recommended that the Guarantor/s obtain independent legal advice to
ensure that they understand their commitment in terms hereof and the
potential consequence of their decision to bind themselves as Guarantor/s
and co-principal debtor/s.” (my emphasis)
[76] Clause 1 of the guarantee then reads as follows:
“1. I/ We the Guarantor/s listed below, do hereby bind myself/ourselves
jointly and severally as co- principal debtor and for the primary
continuing obligation and punctual payment by User, as defined
overleaf, to Hirer, as defined overleaf or its cessionary/ies of all
amounts due and owing arising out of or from the Master Agreement
of Hire and the schedule/s thereto and all and any other indebtedness
t Hirer, whether actual or contingent, present or future and howsoever
arising (the “Guaranteed Obligations");”
[77] It is important to note that t he Second Defendant signed in a block below
the various clauses, which is distinctly headed: “Signature of Guarantor”.
[78] The Second Defendant argued that she had no intention to be bound and
that no guarantee was accordingly entered into. However, contractual
liability can arise even without genuine agreement or consensus, through
the doctrine of quasi mutual assent. This means that, even if both parties
did not truly agree, contractual liability may still occur. The error which
occurred was unilateral. As held in National and Overseas Distributors
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Corporation (Pty) Ltd v Potato Board 1958(2) SA 473 (A) at 479G -H, this
type of mistake is one-sided.
“Our law allows a party to set up his own mistake in certain circumstances
in order to escape liability under a contract into which he has entered b ut
where the other party has not made any misrepresentation and has not
appreciated at the time of acceptance that his offer was being accepted
under a misapprehension, the scope for a defence of unilateral mistake is
very narrow, if it exists at all. At least the mistake (error) would have to be
reasonable (justus), and it would have to be pleaded.”
[79] The validity of the guarantee remains unaffected by any misrepresentation
made by a third party (the supplier) who is not a party to the contract, even
if the supplier's silence is deemed to constitute a misrepresentation. 35 In
such cases, the remedy lies against the third party directly.
[80] Where a fraud which allegedly induces a contract does not proceed from
one of the parties, but from an independent third person (such as the
representative), it will have no effect on the contract.
[81] Further, a contracting party is generally not bound to inform the other party
of the terms of the proposed agreement. 36 He must do so, however, where
there are terms that could not reasonably have been expected in the
contract.37
[82] The guarantee in the current matter was not hidden. It was separate page
under a bold and capitalised heading "GUARANTEE". Moreover, it required
the Second Defendant's signature immediately next to her residential
address and identity number. A cursory glance would have alerted the
Second Defendant about the nature of the document she was agreeing to.
35 Slip Knot Investments 777 (Pty) Ltd v Du Toit 2011(4) SA 72 (SCA)
36 Constantia Insurance Co Ltd v Compusource (Pty) Ltd 2005 (4) SA 345 (SCA) para 19.
37 Afrox Healthcare Bpk v Strydom 2002 (6) SA 21 (SCA) ([2002] 4 AII SA 125) para 36; and cf Fourie v Hansen and Another
[2001] 1 All SA 510 (W) at 516.
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[83] The Second Defendant's mistake was accordingly unilateral one. On her
version (the supplier's representative present ed the agreement and the
guarantee for signature without saying anything, and the Second
Defendant's staff member Ms. Nadia Du Plessis had already filled in
sections of the agreement when the Second Defendant had signed ("the
circumstances") she does not establish that her mistake constituted an
iustus error.
[84] The decisive question is whether a reasonable person would have been
misled (considering the form and format of the guarantee, and the
alleged
circumstances leading to it being signed).
“(Did) the party whose actual intention did not conform to the common
intention expressed, lead the other party, as a reasonable man, to believe
that his declared intention represented his actual intention? ... To answer
this question, a three- fold enquiry is usually necessary, namely, firstly, was
there a misrepresentation as to one party's intention; secondly, who made
that misrepresentation; and thirdly, was the other party misled thereby?
...”
38
[85] Considering the form and format of the guarantee, and the circumstances,
a
reasonable person would not have been misled. The Second Defendant
is furthermore a business lady and should have realized the importance of
the heading in bold GUARANTEE.
[86] The misrepresentation-defence consequently also fails to establish a bona
fide defence to the Plaintiff's claim which prima facie has some prospect of
success.
CONCLUSION:
38 Sonap Petroleum (SA) (Pty) Ltd (formerly known as Sonarep (SA) (Pry) Ltd) - Pappadogianis 1992 (3) SA 234 (A) at 2391-
240B.
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[87] Having considered all the Defendant’s defences – the service, the
jurisdiction and misrepresentation defences - it is clear that there is no merit
in these.
[88] There is neither a defence on the merits that has reasonable prospects of
success,
nor has the existence of an error as contemplated in Uniform
Rule 42(1) been established. A rescission can accordingly not be granted in
terms of rule 42(1)(a) or based upon the common law.
[89] In respect of c osts, costs will follow the cause and be granted on an
attorney and own client scale as per clause 16 of the T erms of Business39
and clause 10 of the Guarantee.40
[90] I accordingly make the following order:
Order
[1] The Rescission application is dismissed;
[2] The Defendants are directed to pay the costs of the application, jointly
and severally the one paying the other to be absolved, on an attorney
and own client scale.
___________________________
S VAN ASWEGEN
ACTING JUDGE OF THE HIGH COURT
JOHANNESBURG
39 Case Lines 02-50
40 Case Lines 02-49
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Delivery date: 8 May 2026
For the Applicant: Adv R Kriek
advrozannekriek@counseljhb.co.za
079 514 9411
Instructed by Friedman Scheckter
Attorneys
gerald@lawprop.co.za
Ref: Mr Friedman/ps/L11933
For the Respondent: Adv JG Botha
igbotha@theproteagroup.co.za
083 703 4418
Instructed by ODBB Attorneys
Ref: SR0526
(011) 883 9041
lelanie@odbb.co.za
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