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principally in dispute is whether the individual who entered
into the loan agreements on behalf of the Trust, the first
respondent, Mr V an Houten, was authorised to do so on the
Trust's behalf.
When he entered into the various loan agreements Mr
Van Houten warranted that he was duly au thorised to do so
on behalf of the Trust. In his answering affidavit, supported
by confirmatory affidavits from the other trustees, Mr Van
Houten now says that he was not so authorised. These two
contradictory assertions lead to what was described in the 10
case of Moraitis Investments v Montic Dairy (Pty) Ltd 2017
(5) SA 508 (SCA) , as a “stark question ”. There, Justice
Wallis , writing for a unanimous court, posed the question as
follows: Why should we believe that the trustee was lying when
he signed the loan agreements but telling the truth in his affidavit?
(Moraitis, para 33).
The same question arises here. Why should a court
believe that Mr Van Houten was not, after all, duly
authorised to enter into the various loan agreements by the
other trustees , he having signed a large quantity of
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documentation warranting that he is so authorised . In order
to answer that question, it would have been incumbent upon
the Trust and its trustees to set out the circumstances
under which authority flowed through them to Mr Van
Houten in the ordinary course and scope of the Trust' s
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business and why, on each individual occasion that he
signed the various loan agreements, that authority was
absent. Such a version is entirely absent from the Trust's
answering affidavit .
B ut it gets worse. The trustees themselves, over
extended periods, signed various agreements where they
bound themselves on as sureties for the Trust's
performance under the various loan agreements. Not every
trustee signed as a surety in respect of every transaction,
but enough of the trustees signed enough of the suretyships
10
to raise the question of how, if they did not authorise the
decisions to incur the indebtedness under the various loan
agreements for which they stood a s surety, the trustees
came to sign the suretyship agreements in the first place.
That is not explained in the answering affidavit either .
Furthermore, on 30 March 2012, all the trustees, that
is, each one of the first to fourth respondents, signed a
resolution authorising Mr. van Ho uten to be ,
"n ominated to represent the Van Houten
Properties Trust and be authorised to sign
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all documentation pertaining to any
transaction with regard to the trust. "
That document was disclosed in reply, but its
existence is not explained or contextualised at all by the
respondents . T he document adds to the mountain of
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documentary and circumstantial evidence which leads to the
conclusion that Mr Van Houten was in fact authorised to
enter into the various loan agreements upon which the first
applicant now seeks to collect.
To put it another way, on the Moraitis case, especially
on a conspectus of p aragraphs 32 and 33 of that decision, a
trust which seeks to resist liability for the performance of an
obligation , on the basis that the obligation was incurred
unauthorised by one of its trustees , may not simply issue a
bare denial of authority. It must explain the circumstances
10
under which authority is usually given, and it must
contextualise the circumstances under which the trustee
whose authority is den ied purported to pos sess authority
they did not have. A trust that does not do that runs the
risk in application proceedings such as those presently
before me of having its denial of authority rejected as far -
fetched and untenable.
In my view, for all the reasons I have given, the
respondents ’ denial of Mr Van Houten's authority to enter
into the various agreements is stark, far -fetched and
20
untenable. It falls to be rejected on the ordinary principles
applicable to applications for final relief.
There we re a number other points raised in the
answering affidavit. Mr Bhima , who appeared for the
respondents, quite wisely declined to press them. Although
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the respondents do not abandon them, they are
transparently without merit. The first point is that it is said
to be unclear on the Notice of Motion which of the two
applicants seeks to enforce the obligations owed under the
loan agreement. It is plain , on a conspectus of the papers ,
that it is the first applicant to whom the obligation is owed
and the firs t applicant to whom payment is due. Any other
interpretation of the papers that seeks to create an
ambiguity is tortured and untenable.
It was then alleged that action to collect on the loan
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agreements was contrary to an underlying understanding
between the parties, that execution of the loan agreements
would not follow upon a single or a small number of acts of
default, that essentially what was agreed between the
parties was some sort of revolving loan facility, and that the
present action is in breach of that understanding.
Unfortunately, the underlying understanding, if it exists, has
not been pleaded, and the facts giving rise to the
understanding have not been set out in the answering
affidavit.
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The loan agreements and the letters of grant
embodying them are in writing and attached to the founding
affidavit. In those circumstances, the mere mention of an
underlying understanding is not sufficient to create a
dispute that would prevent my granting final relief of the
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nature the applicants seek.
It was then suggested that the identity of the debtor
under the suretyships signed by the various trustees is
unclear. The most cursory glance at the first page of each
of the suretyships puts pa id to that suggestion. The debtor
is described as the trustees of the trust, which is the
appropriate form.
It was then suggested that the property against which
the applicants seek to execute is residential in nature, and
that as a result, Rule 46A of the rules of this court and the 10
various underlying legal pr inciples controlling execution
against residential property have application. That, too, is
an empty defence. No primary facts are set out in the
answering affidavit , which are capable of grounding the
suggestion that any of the property against which the loans
are secured is residential. In reply, facts are put up which
demonstrate the property is, in fact, commercial. Rule 46A
plainly does not apply.
It was finally suggested that one of the letters of
grant referred to in the papers as B929 did not create any 20
liability on the Trust's behalf. That defence appears to be a
rather opportunistic attempt to seize on the fact that the
original of the letter of grant cannot be found . T he applicant
put up a true copy of it. Instead of disputing the
authenticity of the true copy, a bare denial that it gave rise