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[2018] ZASCA 54
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Mostert and Others v Firstrand Bank t/a RMB Private Bank (198/2017) [2018] ZASCA 54; 2018 (4) SA 443 (SCA) (11 April 2018)
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THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case
No: 198/2017
In
the matter between:
DAVID CARL
MOSTERT
FIRST
APPELLANT
DAVID CARL MOSTERT
NO
SECOND
APPELLANT
LEE ANNE ELIZABETH
MOSTERT NO
THIRD
APPELLANT
SANDRA
MARGARET MOSTERT NO
FOURTH
APPELLANT
and
FIRSTRAND
BANK LIMITED
t/a
RMB PRIVATE
BANK
FIRST
RESPONDENT
SHERIFF OF THE HIGH
COURT
SECOND
RESPONDENT
Neutral
citation:
Mostert
v Firstrand Bank t/a RMB Private Bank
(198/2017)
[2018] ZASCA 54
(11 April 2018)
Coram:
Shongwe
ADP and Van der Merwe JA and Rogers, Hughes and Schippers AJJA
Heard:
15
March 2018
Delivered:
11
April 2018
Summary:
Debtor
and creditor – remedying of default in a credit agreement in
terms of
s 129(3)
of the
National Credit Act 34 of 2005
–
s
129(3)
requires payment by or on behalf of the consumer –
consumer relied on payments during 2013 and 2015 – not
established
that 2013 payment settled the arrears – 2015
payments did settle the arrears but were not made by or on behalf of
the consumer.
ORDER
On
appeal from:
Western
Cape Division, Cape Town (Gamble J sitting as court of first
instance):
1 The appeal is
dismissed.
2 The appellants are
directed to pay the costs of the appeal on the scale of attorney and
own client, including the costs of two
counsel, jointly and
severally.
JUDGMENT
Van
der Merwe JA (
Shongwe
ADP and Rogers, Hughes and Schippers AJJA
concurring)
[1]
The first appellant is Mr David Carl Mostert. Mr Mostert and the
third and fourth appellants are the trustees of the Carpe Diem
Trust
IT561/1991 (the Trust). The Trust is the owner of Erf 382,
Bishopscourt, Cape Town (the property). The first respondent,
Firstrand Bank Limited t/a RMB Private Bank (RMB), obtained a
judgment in the Western Cape Division in terms of which the property
was declared specially executable. The second respondent, the sheriff
of the Western Cape Division (the sheriff), did not participate
in
the litigation relevant to the appeal. The property is quite valuable
(during August 2013 it was valued at R40 million) and
is the
residence of Mr Mostert and his wife and family. The question in the
appeal is whether RMB should be prohibited from taking
steps to
execute the judgment in respect of the property.
Background
[2]
During March 2005 Mr Mostert and RMB entered into a written loan
agreement. In terms of the loan agreement RMB advanced the
amount of
R20 million to Mr Mostert. This amount, together with agreed interest
thereon, had to be repaid over a period of 240
months at a rate of
R176 742.14 per month. In terms of the loan agreement the loan
was inter alia to be secured by suretyships
and a mortgage bond over
the property. In compliance herewith the Trust, New Port Finance
Company (Pty) Ltd (New Port) and a company
now known as TPC Marketing
(Pty) Ltd (the sureties), each bound themselves jointly and severally
as surety and co-principal debtor
in
solidum
for payment of all sums of money owing by Mr Mostert to RMB. The
suretyship of the Trust was supported by the registration of a
first
mortgage bond in the amount of R30 million over the property in
favour of RMB. The loan agreement was amended in writing
on several
occasions, mainly in respect of the amount of the loan and the
monthly repayments. The last amendment of the loan agreement
was
effected on 30 March 2007. In terms thereof the amount of the loan
was increased to R30 million and the repayment (over the
remaining
period of 216 months) increased to the considerable sum of
R311 235.06 per month.
[3]
Mr Mostert failed to make payment in terms of the loan agreement. As
a result, during December 2009, RMB issued summons in the
Western
Cape Division against Mr Mostert and the sureties, for payment of the
full outstanding balance of the loan, interest and
costs. On 3 March
2010 a written settlement agreement was entered into between RMB, Mr
Mostert and the sureties. This agreement
provided for specified
payments, which had to settle the arrears in terms of the loan
agreement by 1 March 2011. This agreement
further provided that Mr
Mostert would cede all his shares in CSHELL 374 (Pty) Ltd (CSHELL) to
RMB and would sign a special power
of attorney authorizing RMB to
sell the shares in the event of default of the settlement agreement.
[4]
The settlement agreement was not complied with. RMB consequently
brought an application for default judgment against Mr Mostert
and
the sureties. The application was opposed and answering and replying
affidavits were filed. On 12 September 2011, the Western
Cape
Division granted judgment against Mr Mostert and the sureties jointly
and severally for payment of the sum of R33 625 364.58,
interest
thereon at a rate 11,75 per cent per annum from 12 November 2009 to
date of payment and costs as between attorney and
own client. In
addition, as I have said, the property was declared specially
executable.
[5]
On the same day Mr Mostert undertook to make payment of the amount of
R1 million by the end of September 2011 and to make
quarterly
payments of R500 000 each until the arrears in respect of the
loan agreement were settled. The undertaking clearly
envisaged that
payment in accordance therewith would take place in addition to the
monthly instalments payable in terms of the
loan agreement. As a
result of the undertaking RMB held execution of the judgment in
abeyance.
[6]
But Mr Mostert did not keep to his undertaking. He only made payment
of the amount of R920 000 in respect of his undertaking
to pay
R1 million by the end of September 2011. He failed to make any
payment in respect of the quarterly payments of R500 000
each
that he had promised would take place on 30 June 2012 and 30
September 2012. When RMB thereafter informed Mr Mostert of its
intention to have the property sold in execution, Mr Mostert took the
stance that RMB had lost the right to execute the judgment.
He
alleged that during September 2011 RMB had agreed: (i) that he be
granted the opportunity to settle the arrears in respect of
the loan
agreement by inter alia making payments in accordance with his
undertaking and (ii) that once the arrears were paid RMB
would not be
entitled to rely on the judgment and in case of default, had to
commence legal proceedings afresh. He further alleged
that the
arrears were settled ‘. . . during or about June 2013’.
He therefore contended that RMB was not entitled to
execute the
judgment. During May 2014 Mr Mostert and the Trust (the appellants)
instituted an action in the Western Cape Division
against RMB and the
sheriff. Relying essentially on the aforesaid allegations, the
appellants claimed an order declaring that RMB
is not entitled to
sell the property in execution.
[7]
RMB, however, persisted in the contention that it was entitled to
proceed with the sale of the property. This was finally conveyed
by
RMB’s attorneys to Mr Mostert’s attorneys in a letter
dated 15 December 2015. In support of RMB’s stance the
letter
inter alia stated that no payments had been made by Mr Mostert or the
Trust in respect of the judgment debt since August
2013. This
prompted the present application, which was launched by the
appellants against RMB and the sheriff during February 2016.
In the
founding affidavit the appellants essentially relied on the
allegations referred to above, namely that the agreement reached
with
RMB during September 2011 and the compliance therewith by the
settling of the arrears by about June 2013, precluded execution
of
the judgment. In response only to the allegation in the letter of 15
December 2015 that no payments had been made since August
2013, it
was stated in the founding affidavit that payments totaling R7
739 476.40, representing the proceeds of the sale
of shares in
CSHELL, were made to RMB during 2015.
[8]
In the notice of motion the appellants claimed an interim interdict
prohibiting the sale in execution of the property pending
the final
determination of their 2014 action. In the alternative, and in the
event that the court should determine that the merits
of RMB’s
entitlement to execution of the judgment fell to be determined in the
application (rather than the 2014 action),
they claimed an order
declaring that neither RMB nor the sheriff ‘. . .is permitted
to take any further steps in regard to
the execution or disposal’
of the property. In addition, in view of the factual disputes between
the parties evidenced by
the correspondence between the respective
attorneys, they claimed an order referring the matter for oral
evidence. In effect therefore,
the alternative relief claimed was
also of temporary nature, pending determination of the alleged
agreement of September 2011 by
oral evidence.
[9]
In the answering affidavit RMB denied the alleged agreement of
September 2011 and the alleged payment of the arrears. In order
to
displace the impression that Mr Mostert diligently adhered to his
payment obligations, RMB attached a schedule to the answering
affidavit reflecting the installments due in terms of the loan
agreement and the amounts actually paid during the period from 30
September 2011 to 29 February 2016 (the schedule). The schedule
reflected that an amount of R925 181.00 had been paid on 31
May
2013 (the 2013 payment). RMB also acknowledged receipt of the
aforesaid payments during 2015, that is the amount of R3 178 554.94
on 31 March 2015 and the amount of R4 million on 30 September 2015
(the 2015 payments), but pointed out that both these payments
were
made by New Port. In the replying affidavit the appellants alleged,
for the first time, that the loan agreement had been reinstated
in
terms of s 129(3) of the National Credit Act 34 of 2005 (the NCA) as
a result of payments made during 2013 or the 2015 payments.
[10]
The court a quo (Gamble J) correctly considered the matter on the
basis that interim relief was claimed. He analyzed the evidence
and
concluded that the appellants did not
prima
facie
establish the alleged agreement of September 2011. Therefore the
appellants did not show the first requirement for an interim
interdict. In its judgment the court a quo stated that it was common
cause that by mid-2013 the outstanding arrears due to RMB had
been
settled, but did not consider the reinstatement of the loan agreement
as a result thereof. In respect of the question whether
the 2015
payments remedied the default in the loan agreement in terms of s
129(3), the court held that the point was raised only
in the replying
affidavit and could not be relied upon by the appellants and that, in
any event, the 2015 payments were not made
by the consumer as
required by s 129(3). It consequently dismissed the application with
costs on the scale of attorney and client
including the costs of two
counsel where so employed, such costs to be borne by the appellants
jointly and severally. The court
a quo subsequently granted leave to
the appellants to appeal to this court.
[11]
In this court the appellants abandoned any reliance on the alleged
agreement of September 2011. They contended that the loan
agreement
had been reinstated as a result of the 2013 payment or that the 2015
payments remedied the default and that the Trust
was entitled to rely
on s 129(3) to resist execution of the judgment against it. The
appellants asked that the order of the court
a quo be replaced with a
final order declaring that RMB is not permitted to execute the
judgment in respect of the property.
[12]
On behalf of RMB it was submitted that the reliance on s 129(3) was
impermissibly raised only in the reply and that the appeal
should be
dismissed for that reason alone. On the merits RMB argued that it had
not been established that the 2013 payment settled
the arrears. RMB
conceded that the 2015 payments had settled the arrears in terms of
the loan agreement. However, it argued that
the 2015 payments were
not made by Mr Mostert. Therefore, so it was contended, the 2015
payments did not remedy the default in
terms of s 129(3) and that
even if they did, RMB’s rights to execute against the Trust
were not affected.
New
case in reply
[13]
It is trite that in motion proceedings the affidavits constitute both
the pleadings and the evidence. As a respondent has the
right to know
what case he or she has to meet and to respond thereto, the general
rule is that an applicant will not be permitted
to make or supplement
his or her case in the replying affidavit. This, however, is not an
absolute rule. A court may in the exercise
of its discretion in
exceptional cases allow new matter in a replying affidavit. See the
oft-quoted
dictum
in
Shephard
v Tuckers Land and Development Corporation (Pty) Ltd
(1)
1978 (1) SA 173
(W) at 177G-178A and the judgment of this court in
Finishing
Touch 163 (Pty) Ltd v BHP Billiton Energy Coal South Africa Ltd &
others
[2012]
ZASCA 49
;
2013 (2) SA 204
(SCA) para 26. In the exercise of this
discretion a court should in particular have regard to: (i) whether
all the facts necessary
to determine the new matter raised in the
replying affidavit were placed before the court; (ii) whether the
determination of the
new matter will prejudice the respondent in a
manner that could not be put right by orders in respect of
postponement and costs;
(iii) whether the new matter was known to the
applicant when the application was launched; and (iv) whether the
disallowance of
the new matter will result in unnecessary waste of
costs.
[14]
I now consider whether the appeal should be dismissed for the sole
reason that the appellants raised reinstatement of the loan
agreement
only in reply. It appears that only after the judgment of the
Constitutional Court in
Nkata
v Firstrand Bank Ltd
[2016]
ZACC 12
;
2016 (4) SA 257
(CC), did the appellants contend that the
loan agreement had been reinstated despite the fact that judgment had
been granted and
the property declared specially executable. I do not
think that that was unreasonable or indicative of carelessness. Apart
from
an
obiter
dictum
in
Nedbank
v Fraser
[2011] ZAGPJHC 35;
2011 (4) SA 363
(GSJ) paras 39-42, this meaning of
s 129(3) and 129(4) was explained only in the judgment that went on
appeal in
Nkata
,
reported as
Nkata
v Firstrand Bank
Limited
& others
[2014]
ZAWCHC 1
;
2014 (2) SA 412
(WCC).
[15]
The appellants did not raise new facts in their replying affidavit.
What they said in reply was that the payments referred
to in the
founding affidavit had reinstated the loan agreement by operation of
law. RMB did not apply for the striking out of the
new matter in the
replying affidavit, nor did it seek leave to file further affidavits.
On the contrary, RMB fully argued the merits
of the matter in the
court a quo and in this court. Importantly, RMB did not at any stage
indicate that it had been prejudiced
in any manner. I think that it
is fair to say that counsel for RMB did not press this argument. In
my view the merits of the matter
can properly be determined on the
evidence on record. Whether that evidence is sufficient to sustain
the relief claimed, is of
course another matter, to which I shall
return. A consideration that weighs heavily with me is that the
parties have since 2009
been involved in protracted litigation in
respect of the same subject matter, no doubt at considerable expense.
In my view it is
in the interests of justice that the litigation
between the parties proceed to finalization. In the exercise of the
discretion
of this court in the exceptional circumstances of this
case, I conclude that the applicability of s 129(3) should be
considered
in respect of the 2013 payment and the 2015 payments.
The
2013 payment
[16]
In this regard it must in the first place be emphasized that the
appellants now seek final relief in motion proceedings. Therefore,
where there is a dispute of fact on the papers, the version of RMB
must be accepted unless it is clearly untenable, farfetched
or could
for some other reason be rejected out of hand.
[17]
In respect of payment of the arrears during 2013, Mr Mostert said
only the following in the founding affidavit:
’
30.
I complied with the terms of the 2011 settlement agreement in 2011
and 2012, resulting in the payment of the outstanding arrears
and the
revival of the original loan agreements during or about June 2013.
The First Respondent consequently reverted thereafter
to charging the
pre-default interest rate under the loan agreements.
’
Mr
Mostert placed no evidence before the court in respect of what the
amount in arrears then was, what payments were made to settle
the
arrears and when they were made. Not even in the replying affidavit
did he do so, despite the fact that the schedule reflected
the 2013
payment.
[18]
As I have said, RMB pointed out in the answering affidavit that Mr
Mostert failed to settle the arrears inter alia because
he only paid
the amount of R920 000 at the end of September 2011 and did not
pay the amount of R500 000 in terms of his
undertaking on both
30 June 2012 and 30 September 2012. RMB denied the allegation that
the arrears had been paid and denied that
it reverted to the
pre-default interest rate as a result of payment during 2013. In
amplification it mentioned the possibility
that its system may have
read the 2015 payments as having settled the arrears. In the
circumstances RMB’s answer can hardly
be described as a bare
denial and can certainly not be rejected on the papers. It also
follows that the statement by the court
a quo that it was common
cause that the arrears had been settled by mid-2013 was clearly wrong
and probably made
per
incuriam
.
[19]
In argument the appellants attempted to show that an analysis of the
schedule indicated that the 2013 payment had settled the
arrears. But
the schedule did not deal with arrear amounts, it only reflected the
instalments due and the payments made during
the period that it
covered. At best for the appellants, the
dictum
of Botha JA in
Administrator, Transvaal & others v Theletsane & another
[1990] ZASCA 156
[1990] ZASCA 156
; ;
1991 (2) SA 192
AD at 197D is applicable:
‘
It
is clear, in my view, that the room for deciding matters of fact on
the basis of what is contained in a respondent’s affidavits,
where such affidavits deal equivocally with facts which are not put
forward directly in answer to the factual grounds for relief
on which
the applicant relies, if it exists at all, must be very narrow
indeed.’
[20]
In the result the appellants failed to show that the 2013 payments
settled the arrears. It follows that it is not necessary
to consider
whether there was a duty on the appellants to deal with the question
whether RMB had demanded payment of its prescribed
default
administration charges or of the reasonable costs of enforcing the
loan agreement up to 31 May 2013.
The
2015 payments
[21]
As I have said, RMB conceded that the 2015 payments had settled the
arrears. In respect of the 2015 payments the papers are
also silent
on the question of default administration charges and reasonable
costs of enforcement. On the view that I take of the
matter, it is
not necessary to delve into these aspects.
[22]
The next question is whether a default in a credit agreement may be
remedied by payment that was not made by or on behalf of
the consumer
in respect of that credit agreement. The answer must of course be
found in the interpretation of s 129(3). It is trite
that that
exercise requires giving meaning to the words used in this section
within the broad context in which they were used.
The context
includes the overarching aims of the NCA, and the purpose of s 129(3)
within the context of s 129 as a whole.
[23]
Section 129(1) and (3) provide:
‘
129
Required procedures before debt enforcement
(1)
If the consumer is in default under a credit agreement, the credit
provider —
(a)
may
draw the default to the notice of the consumer in writing and propose
that the consumer refer the credit agreement to a debt
counsellor,
alternative dispute resolution agent, consumer court or ombud with
jurisdiction, with the intent that the parties resolve
any dispute
under the agreement or develop and agree on a plan to bring the
payments under the agreement up to date; and
(b)
subject to section
130 (2), may not commence any legal proceedings to enforce the
agreement before —
(i)
first providing notice to the consumer, as contemplated in paragraph
(a)
, or in section 86 (10), as the case may be; and
(ii)
meeting any further requirements set out in section 130.
(2)
. . .
(3)
Subject to subsection (4), a consumer may at any time before the
credit provider has cancelled the agreement, remedy a default
in such
credit agreement by paying to the credit provider all amounts that
are overdue, together with the credit provider’s
prescribed
default administration charges and reasonable costs of enforcing the
agreement up to the time the default was remedied.’
[24]
The core objective of the NCA is the protection of consumers by
securing a credit market that is fair and equitable. The means
by
which it seeks to do so is by balancing the respective rights and
responsibilities of credit providers and consumers. In line
herewith
it has been held that the correct interpretation of s 129 of the
NCA is one that strikes an appropriate balance between
the competing
interests of the parties to a credit agreement. The purpose of s
129(1) is to ensure that the attention of the consumer
is drawn to
the default under the credit agreement and to advise the consumer of
the options that he or she may utilize to remedy
the default. Thus,
the aim of s 129(1) is to facilitate consensual resolution of credit
agreement disputes. See
Sebola
& another v Standard Bank of South Africa Ltd & another
[2012]
ZACC 11
;
2012 (5) SA 142
(CC) paras 40 and 46;
Kubyana
v Standard Bank of South Africa Ltd
[2014]
ZACC 1
;
2014 (3) SA 56
(CC) paras 19-23;
Nkata
paras
53 and 92-98.
[25]
The language of s 129(3) is clear. I find nothing in the context
thereof that justifies departure from the clear meaning of
the words
of s 129(3). On the contrary, it fits neatly into the scheme and
purpose of the NCA and s 129. Section 129(3) provides
a novel and
extraordinary remedy (
Nkata
paras 100 and 142) only to a
consumer who is in default in respect of a credit agreement to which
he or she is a party. I believe
that that is why Moseneke DCJ said
the following in
Nkata
(para 104):
‘
At
the outset, I observe that ss 129(3) and (4) start with what a
consumer may and may not do. It is the consumer who may reinstate
a
credit agreement. This she may do “any time before the credit
provider [cancels] the agreement”. So, as long as the
agreement
is current, she may elect to reinstate it. The clear import is that
for purposes of reinstatement the consumer is the
protagonist. She
may disclose her design to the credit provider but she is not
compelled to give notice to or seek the consent
or cooperation of the
credit giver.’
[26]
Payment in terms of s 129(3) may of course be made on behalf of the
consumer. Payment accepted on behalf or in the name of
the consumer
is equal to payment by the consumer in person. But when payment is
not thus made by the consumer, it falls outside
the scope of s
129(3). This accords with what I have said before. When payment of
arrears does not emanate from the consumer’s
bona fide effort
to resolve the default, but from the credit provider having had to
enforce rights against a third party, the consumer
is not deserving
of the protection of s 129(3).
[27]
The common law tells us how a payment by a third party is made on
behalf of a debtor. In
The Law of Contract in South Africa
,
2
nd
edition, volume II, Sir John Wessels said at 606:
‘
2133.
By the Civil Law, however, a creditor is not as a rule entitled to
refuse payment from a third party where it makes
no difference to him
by whom the contract is performed, provided the performance is
effective and in terms of the contract (Vinnius,
ad
Inst.,
3.30pr., n.9;
Pothier,
Oblig.,
ss.
464, 494).
2134.
It must, however, be quite clear that the third party makes the
payment for the benefit of the debtor (Van Leeuwen,
Cens. For.,
1.4.32.3).’
In
Commissioner for Inland Revenue v Visser
1959 (1) SA 452
(AD) the court explained at 457H-458A that when the payment in that
matter was made, the person making the payment clearly professed
to
pay on behalf of another and in the latter’s name and that the
payment was accepted as having been so made. The court
proceeded to
say:
‘
The
effect of such a payment may be gathered from the following passage
in Part III, Chap. 1, art. 1 of Pothier’s
Obligations
(I quote from
Evans’
translation at p. 330):
“
It
is not essential to the validity of the payment, that it be made by
the debtor, or any person authorised by him; it may be made
by any
person without such authority, or even in opposition to his orders,
provided it is made in his name, and in his discharge,
and the
property is effectually transferred; it is a valid payment, it
includes the extinction of the obligation, and the debtor
is
discharged even against his will . . .”
Grotius,
3.39.10;
Voet,
46.3.1 and van Leeuwen,
Censura Forensis,
1.4.32.3,
are to the same effect.’
See
also
Absa
Bank Ltd v Moore & another
[2016]
ZACC 34
;
2017 (1) SA 255
(CC), where Cameron J said (para 33) that
our common-law jurisprudence and case law hold that ‘. . . a
debt paid by a third
party
in
the name
of
the debtor extinguishes the debt, even when payment is unauthorised,
or even when the debtor opposes it.’ (my emphasis).
The
position is succinctly stated in GB Bradfield
,
Christie’s Law of Contract in South Africa,
7
th
edition (2016) p 471, namely that ‘. . . a third party may
intervene and validly perform with or without the knowledge of
the
debtor and even against the debtor’s will, provided the third
party makes clear that it is performing in the name and
on behalf of
the debtor.’
[28]
The definition of ‘consumer’ in s 1 of the NCA includes a
guarantor under a credit guarantee. A credit guarantee
is a credit
agreement that meets all the criteria set out in s 8(5). It suffices
to say that s 8(5) includes a suretyship in respect
of the
obligations in terms of a credit facility or credit transaction.
Thus, a surety is a consumer in respect of the credit agreement
to
which he or she is a party, that is the suretyship. In terms of s
4(2)
(c)
the NCA applies to a credit guarantee only to the extent that it
applies to a credit facility or credit transaction in respect
of
which the credit guarantee is granted. A surety may thus remedy a
default in respect of the suretyship in terms of s 129(3).
The surety
is not, however, a consumer in respect of the credit agreement in
respect of which the suretyship was granted. The surety
may make
payment of arrears on behalf of the consumer but that will not always
be the case.
[29]
The following is what happened on the facts on which this matter has
to be determined. Mr Mostert was the holder of shares
in CSHELL. Mr
Mostert and RMB are in agreement that the shares were ‘pledged’
to RMB as security for the loan agreement.
It does not appear from
the papers whether this means that the aforesaid documents referred
to in the 2010 settlement agreement
were executed, but in my view
nothing turns hereon. What is clear, however, is that Mr Mostert
pledged the shares to RMB in consequence
of the 2010 settlement
agreement. On the evidence that I have to accept, Mr Mostert was in
arrears in respect of the loan agreement
at all times between the
2010 settlement agreement and the 2015 payments. Thus, at a time when
he was in arrears in respect of
the loan agreement, Mr Mostert
transferred the shares to New Port. This took place without the
knowledge or consent of RMB. Only
when CSHELL was in the process of
buying back the shares from New Port did it come to the attention of
RMB that Mr Mostert had
disposed of the shares. A buy-back agreement
between CSHELL and New Port was subsequently recorded in writing.
[30]
RMB insisted that New Port cede the proceeds of the sale of the
shares to CSHELL to it on an out and out basis. It is common
cause
that the 2015 payments were made by New Port and that they
represented the proceeds of the sale of the shares to CSHELL.
Although a written out and out cession agreement between New Port and
RMB was only finalised during October 2015, there can be
little doubt
that the 2015 payments were made only because of RMB’s conduct
in following up its security. In the result the
2015 payments were
not made on behalf or in the name of Mr Mostert. In fact, they were
not even made pursuant to New Port’s
obligation as a surety.
Because of RMB’s insistence New Port simply paid the proceeds
of the sale of the pledged shares directly
to RMB. It follows that
the 2015 payments did not remedy Mr Mostert’s default in the
loan agreement. It also follows that
it is not necessary to consider
the question whether remedying of the default would have inured to
the benefit of the Trust.
[31]
In the result the appeal must fail. Mr Mostert and the Trust are
liable to pay costs on the scale of attorney and own client,
in terms
of the loan agreement and the suretyship respectively, and the latter
provides for liability
in
solidum.
[32]
The following order is made:
1 The appeal is
dismissed.
2 The appellants are
directed to pay the costs of the appeal on the scale of attorney and
own client, including the costs of two
counsel, jointly and
severally.
_________________________
C
H G van der Merwe
Judge
of Appeal
APPEARANCES
For
Appellant: R G Goodman SC, with him G Quixley
Instructed
by:
Taylor
Incorporated, Cape Town
Webbers
Attorneys, Bloemfontein
For
First Respondent: B J Manca SC, with him J E Smit
Instructed
by:
Werksmans
Attorneys, Johannesburg
Symington
& De Kok, Bloemfontein