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IN THE HIGH COURT OF SOUTH AFRICA
NORTH WEST DIVISION, MAHIKENG
Not reportable
Case No: A2026-075149
Court a quo Case No: M521/2023
In the matter between:
BALETSEMA (PTY) LTD Appellant
(Registration No. 2018/198087/07)
and
PHEK ENGINEERING & SUPPLIES CC First Respondent
(Registration No. 2004/055459/23)
MOTLHOPESI STEPHEN PHEKOLA Second Respondent
(Identity No. 6[...])
MORWADI CONSTANCE PHEKOLA Third Respondent
(Identity No. 6[...])
Coram: Petersen J, Wessels AJ, Tsautse AJ
Heard on: 24 July 2026
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Delivered: This judgment was handed down electronically by circulation to the parties’
legal representatives by email, uploaded to CaseLines and released to SAFLII. The
date and time for the handing down of the judgment is deemed to be 12h00 on 16
September 2026.
Summary: Appeal against dismissal of an application for payment, alternatively transfer
of immovable property, founded on a written acknowledgement of debt - The court a quo
found the acknowledgement of debt to be an unlawful, unregistered credit agreement
under the National Credit Act 34 of 2005 - The agreement falls outside the application of
the Act in terms of s 4(1)(a) - The first respondent (the consumer) being a juristic person
with an admitted asset value and turnover exceeding the prescribed threshold - The
court a quo materially misdirected itself by not considering this exclusion - Appeal
upheld on that ground - The remaining defences, including the common law in duplum
rule, the disputed validity of the third respondent’s suretyship, and whether transfer of
the immovable property would unjustly enrich the appellant, referred to oral evidence.
___________________________________________________________________
JUDGMENT
___________________________________________________________________
PETERSEN J (WESSELS AJ and TSAUTSE AJ concurring):
Introduction
[1] This is an appeal, with leave of Masike AJ granted on 17 October 2025, against
the whole of the judgment and order of Malane AJ delivered on 13 August 2025,
dismissing, with costs, an application for specific performance instituted by the appellant
against the respondents.
[2] The appellant, Baletsema (Pty) Ltd (“Baletsema”), is a private company duly
incorporated in terms of the Companies Act 71 of 2008. The first respondent, Phek
Engineering & Supplies CC (“Phek Engineering”), is a close corporation which renders
light engineering and mining supply services. The second respondent, Motlhopesi
light engineering and mining supply services. The second respondent, Motlhopesi
Stephen Phekola, is the sole member of Phek Engineering. The third respondent,
Morwadi Constance Phekola , is his spouse and is married to him in community of
property. I refer to the second and third respondents together as “the sureties” for
convenience only, without prejudging whether the third respondent is in fact bound as
such, a matter to which I return below.
[3] The court a quo dismissed the application solely on the basis that a written
acknowledgement of debt concluded between Baletsema and the respondents
constituted a credit agreement within the meaning of s 8(4) (f) of the National Credit Act
34 of 2005 (“the NCA”), and that, Baletsema not being registered as a credit provider,
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the agreement was unlawful and void under s 89(5) (a)of the NCA. Whether that finding
can stand, once regard is had to the exclusion in s 4(1) (a) of the NCA, is the central
question on appeal.
Factual background
[4] On 16 January 2023, Baletsema and Phek Engineering, represented by the
second respondent, concluded a written loan agreement in terms of which Baletsema
advanced R500 000 to Phek Engineering. The loan attracted an administration fee and
interest of R200 000. R100 000 was payable on or before 17 February 2023, and the
balance of R600 000 on or before 6 March 2023. The immovable property known as the
Remaining Extent of Portion 1 of the Farm Witrand 457, Registration Division JP, North
West Province (“the immovable property”), together with seven identified motor vehicles,
served as security; the loan agreement contemplated that the immovable property
would be sold, and the proceeds applied to the debt, in the event of default. The second
respondent bound himself as surety and co-principal debtor for the debt.
[5] Phek Engineering defaulted. On 6 April 2023 the second respondent, on behalf of
Phek Engineering and in his personal capacity, signed a written acknowledgement of
debt (“the AOD”) in terms of which Phek Engineering acknowledged indebtedness to
Baletsema in the sum of R1 209 600, payable on or before 31 May 2023, failing which
the full amount became immediately due, together with interest of 20% per month on
overdue amounts. Clause 2.4 of the AOD provided that a certificate signed by
Baletsema certifying the amount due would constitute prima facie proof of indebtedness
sufficient to found summary judgment or provisional sentence. Clause 3.1 purported to
bind the second and third respondents jointly and severally, in solidum, as sureties and
co-principal debtors. Materially, and in contrast to the loan agreement, clause 4.2 of the
AOD provided that the immovable property would be transferred, rather than sold, to
AOD provided that the immovable property would be transferred, rather than sold, to
Baletsema if the debt was not repaid timeously, the parties recording in clause 4.1 that
the value of the immovable property was not disproportionate to the debt.
[6] Whether the third respondent in fact signed the AOD, and thereby bound herself
as surety and co -principal debtor, is disputed. Phek Engineering failed to pay the
amount acknowledged. Letters of demand dated 21 June 2023 and 6 August 2023 went
unanswered. A certificate of balance reflected R1 935 360 due as at 31 August 2023,
inclusive of accrued interest. On 2 October 2023, Baletsema’s notice of motion was
served. Prayer 1 sought payment of R1 209 600, being the capital sum acknowledged
in the AOD, within seven days of the order; prayer 2 sought, failing such payment,
transfer of the immovable property; and prayer 4 sought costs of the application on the
attorney and client scale.
[7] The respondents opposed the application. In an answering affidavit deposed to
by the second respondent on behalf of all three respondents, the respondents raised
three points in limine . First, that the AOD constituted an unregistered, and therefore
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unlawful, credit agreement under the NCA. Second, that the interest claimed offended
the in duplum rule. Third, that Baletsema had adopted an incompetent procedure, in
that a liquid document such as the AOD ought properly to have been enforced by
provisional sentence or action rather than application. On the merits, the second
respondent admitted signing the AOD and admitted Phek Engineering’s default, but
pleaded that he had not appreciated, when signing the AOD, that its terms (in particular,
the transfer, rather than sale, of the immovable property) departed materially from the
loan agreement, and disputed that the third respondent had ever consented to, or
signed, any suretyship. He further contended that transfer of the immovable property,
whose value he asserted exceeded the debt, would unjustly enrich Baletsema.
[8] The matter was heard on 18 October 2024. Malane AJ, in a judgment handed
down on 13 August 2025, found that the AOD, providing for deferred payment with
interest, met the definition of a credit transaction in s 8(4) (f) of the NCA. 1 Baletsema,
having admitted that it was not registered as a credit provider, the learned Judge held
the AOD to be unlawful and void under s 89(5) (a) of the NCA, and dismissed the
application on that ground alone, with costs. The remaining points in limine , and the
merits generally, were accordingly not determined.
[9] Baletsema sought leave to appeal, contending that the court a quo had erred in
finding the AOD to be a credit agreement subject to the NCA, given that Phek
Engineering, the consumer under the agreement, had an admitted asset value and
turnover exceeding R1 million, bringing the agreement within the exclusion in s 4(1) (a)
of the NCA. Leave to appeal to the full court was granted by Masike AJ on 17 October
2025.
The application to introduce further evidence
[10] Shortly before the hearing of the appeal, the respondents applied for leave to
[10] Shortly before the hearing of the appeal, the respondents applied for leave to
introduce, as further evidence on appeal, a valuation report reflecting a market value of
R8 500 000 for the immovable property. The explanation tendered was that no valuation
had been obtained by the time the answering affidavit was filed, there having been
insufficient time to do so within the fifteen days allowed for that affidavit.
[11] The admission of further evidence on appeal is governed by well -established
principles. An applicant must furnish a reasonably satisfactory explanation for the failure
to have produced the evidence timeously, must show that the evidence is prima facie
credible, and must establish that it is materially relevant to the outcome. Counsel for
Baletsema submitted, correctly in my view, that the report is in any event of doubtful
admissibility on this ground alone: it is not a sworn valuation by a suitably qualified
valuer, but an unsworn estate agent’s valuation. 2 The explanation proffered here does
not withstand scrutiny. The answering affidavit was deposed to on 1 November 2023.
1 National Credit Act 34 of 2005, s 8(4)(f).
2 Simon NO v Air Operations of Europe AB and Others 1999 (1) SA 217 (SCA) at 228E-229A.
Judgment was only handed down on 13 August 2025, some twenty -one months later,
and the matter was only argued on 18 October 2024, a full year after the answering
affidavit. Nothing prevented the respondents from applying, at any time during that
period, to supplement the record with a valuation. The absence of any explanation for
that lengthy delay tells materially against the application.
[12] However, it is unnecessary to dismiss the application outright. For the reasons
that follow, the value of the immovable property, and its bearing on the propriety of an
order for transfer as opposed to payment, falls to be determined by oral evidence in any
event. The application to introduce the valuation report is accordingly better dealt with,
together with all other evidence relevant to that question, before the court hearing that
oral evidence, and I make no final ruling on its admissibility.
Submissions on appeal
The appellant’s submissions
[13] Baletsema submitted, first, that the enquiry into the application of the NCA must
begin with the loan agreement of 16 January 2023, since the character of an antecedent
credit arrangement determines the classification of a subsequent acknowledgement of
debt concluded to settle it. Given the admission, at paragraph 22 of the answering
affidavit, that Phek Engineering’s asset value or turnover exceeded R1 million, the loan
agreement itself fell outside the Act under s 4(1) (a)(i), alternatively constituted an
excluded large agreement under s 4(1)(b) read with s 9(4).
[14] Relying on Ratlou v MAN Financial Services SA (Pty) Ltd 3, counsel submitted
that where the underlying agreement is not itself regulated by the NCA, a subsequent
settlement or acknowledgement of debt concluded to compromise it does not become
subject to the Act merely because it defers payment and attracts interest. A contrary,
literal reading of s 8(4) (f) would have a chilling effect on parties' willingness to conclude
settlements.
settlements.
[15] This was tested directly in argument. It was put to counsel that Ratlou might be
read as laying down a general rule that the character of any antecedent agreement,
once established, is carried over into a later acknowledgement of debt, or whether the
decision is narrower and tied to the chilling effect that subjecting settlements generally
to the NCA would have on parties’ willingness to compromise disputes. Counsel
confirmed that the latter, narrower reading is correct because the initial loan agreement
fell outside the NCA, it was never within the parties' contemplation, in concluding the
AOD, that they were thereby creating a fresh NCA -regulated transaction attracting
obligations such as registration as a credit provider.
3 Ratlou v MAN Financial Services SA (Pty) Ltd 2019 (5) SA 117 (SCA) para 21.
[16] In the further alternative, Baletsema submitted that the AOD did not in any event
satisfy s 8(4) (f), since the interest of 20% per month it imposed was payable only on
amounts remaining unpaid after 31 May 2023, and not on the R1 209 600 itself deferred
to that date. Relying on Allied Steelroad (Pty) Ltd v Dreyer and Another 4, counsel
submitted that mora or penalty interest levied on default, as distinct from a charge for
the deferral itself, falls outside the reach of s 8(4) (f). On this footing, Baletsema
contended that the court a quo erred, first, in treating the AOD in isolation from the
NCA-exempt status of the antecedent loan agreement, and, second, in failing to
consider whether the exclusion in s 4(1) (a) removed the AOD, even assuming it to be a
credit transaction, from the application of the Act altogether.
[17] It was further put to counsel that the R200 000 administration fee charged under
the loan agreement, if regarded as a charge levied in respect of the deferred amount,
might itself have brought the loan agreement within s 8(4) (f), independently of the
argument concerning the AOD’s interest provision. Counsel accepted this for purposes
of argument, but submitted, correctly in my view, that the enquiry does not advance
beyond s 4. That section concerns the identity and classification of the consumer and is
logically anterior to the characterisation enquiry under s 8. On this footing, counsel
submitted that once the admitted threshold under s 4(1) (a) is accepted, it becomes
unnecessary to resolve whether Ratlou correctly excludes the AOD from s 8(4) (f) at all,
that question being rendered academic. For the reasons that follow, I agree that the s
4(1)(a) point is dispositive, and it is accordingly unnecessary to determine the Ratlou
point further.
The respondents’ submissions
[18] The respondents supported the reasoning of the court a quo. They submitted that
both the loan agreement, which deferred repayment of R700 000, being the R500 000
both the loan agreement, which deferred repayment of R700 000, being the R500 000
advanced together with the administration fee, over two instalments, and the AOD itself,
were credit agreements as defined in s 8(4) (f), the AOD having deferred the then
outstanding indebtedness and attracted both an administration fee and interest.
[19] The respondents further submitted that Baletsema was, in any event, obliged to
register as a credit provider under s 40(1) (b), since the threshold prescribed under s
42(1) for that requirement has, since 11 May 2016, stood at nil, with the result that the
obligation to register arises irrespective of the size of the transaction or the identity of
the consumer. Relying on Vesagie NO and Others v Erwee NO and Another 5, counsel
submitted that an agreement concluded by an unregistered credit provider is unlawful
and falls to be declared void ab initio.
[20] Finally, and for the first time on appeal, the respondents contended that Phek
Engineering is not in fact a juristic person with an asset value or turnover of R1 million
4 Allied Steelrode (Pty) Ltd v Dreyer and Another [2023] ZASCA 181 para 31.
5 Vesagie NO and Others v Erwee NO and Another [2014] ZASCA 121 para 1.
or more. They point to the absence of independent proof of that fact; to the
circumstance that only one of the assets pledged as security, a motor vehicle first
licensed in 2009 and, on the respondents’ submission, substantially depreciated, was
registered in Phek Engineering’s own name, with the immovable property and remaining
vehicles held personally by the second and third respondents; and to the submission
that, had Phek Engineering in truth possessed assets or turnover of the order admitted,
it would not have needed the loan in the first place, nor defaulted three years later on an
amount as comparatively modest as R500 000. On that footing, the respondents
submitted that the exclusion in s 4(1)(a) could not avail the appellant, and prayed for the
dismissal of the appeal.
Is the acknowledgement of debt a credit agreement?
[21] Section 8(4)(f) of the NCA provides, in substance, that an agreement constitutes
a credit transaction if payment of an amount owed by one person to another is deferred
and any charge, fee or interest is payable in respect of the agreement or the deferred
amount. The AOD deferred payment of R1 209 600 to 31 May 2023, and imposed
interest of 20% per month on amounts not paid by then. The court a quo correctly held
that this brought the AOD within the definition of a credit transaction, and no ground of
appeal seriously contends otherwise. The difficulty with the judgment lies not in this
finding but in what followed from it.
The section 4(1)(a) exclusion
[22] Section 4(1) (a) of the NCA excludes from the application of the Act a credit
agreement in terms of which the consumer is a juristic person whose asset value or
annual turnover, together with that of any related juristic persons, equals or exceeds the
threshold determined by the Minister under s 7(1). That threshold has, since 1 June
2006, been fixed at R1 million for s 4(1) (a). It is distinct from, and ought not to be
2006, been fixed at R1 million for s 4(1) (a). It is distinct from, and ought not to be
confused with, the nil threshold now applicable to the separate registration requirement
in s 40(1), a distinction of some importance given the different consequences that flow
from each provision.6
[23] Paragraph 8.3 of Baletsema’s own founding affidavit alleged that Phek
Engineering “renders light engineering and mining supply services and has an asset
value and/or annual turnover in excess of R1 -million”. In the answering affidavit, the
second respondent, dealing expressly with paragraphs 8 to 10 of the founding affidavit,
recorded that “the contents of these paragraphs are admitted”. Accordingly, there is no
dispute on the papers before the court a quo that Phek Engineering’s asset value or
turnover exceeded the threshold prescribed under s 7(1) at the relevant time. The
respondents’ submission on appeal, that Phek Engineering does not in truth meet this
threshold, cannot be reconciled with that unqualified admission. A fact formally admitted
6 De Bruyn NO and Others v Karsten 2019 (1) SA 403 (SCA) paras 24 -27; GN 713 GG 28893 of 1 June
2006 (threshold for s 4(1)(a)); GN 513 GG 39981 of 11 May 2016 (nil threshold for s 40(1) registration).
in an affidavit is binding on the party who made the admission unless and until it is
properly withdrawn by application, which was neither sought nor obtained in this matter.
This was put squarely to counsel for the respondents in argument, and she candidly,
and correctly, conceded that no application to withdraw the admission had been
brought, either before the court a quo or on appeal.
[24] The respondents’ further submission, that the assets pledged as security are
registered in the personal names of the second and third respondents rather than in the
name of Phek Engineering, does not assist them. The enquiry under s 4(1) (a) is
concerned with the consumer’s own asset value or turnover, not with the ownership of
whatever specific property happens to have been furnished as security for the debt; the
one has no logical bearing on the other.
[25] It follows that the AOD, although a credit transaction as defined, fell outside the
application of the NCA altogether by virtue of s 4(1) (a). Consequently, the registration
requirement in s 40, and the consequences of non -registration in ss 89(2) (d) and
89(5)(a), on which the court a quo’s entire judgment rested, never came into play. This
is not a novel proposition. In Paulsen and Another v Slip Knot Investments 777 (Pty)
Ltd7, the Constitutional Court proceeded on the accepted footing that a credit provider
lending exclusively to a large juristic person falling within the s 4(1) (a) threshold need
not be registered under the NCA, and that the accessory liability of natural -person
sureties for such a debt is unaffected by the Act’s registration provisions.
[26] Baletsema raised this point before the court a quo. The judgment records, at
paragraph 18, the submission that the respondent did not need to comply with the
impugned provisions of the NCA because it was a juristic person with turnover and
assets exceeding R1 million. Regrettably, the judgment does not thereafter engage with
assets exceeding R1 million. Regrettably, the judgment does not thereafter engage with
that submission. It proceeds directly from the finding that the AOD is a credit transaction
to a discussion of registration and enforcement under ss 40, 89, 129 and 130, without
first asking whether the Act applied to the agreement at all. That omission constitutes a
material misdirection of law. The exclusions in s 4 of the NCA are logically anterior to,
and dispositive of, any subsequent enquiry into registration or compliance, and ought to
have been considered first.
[27] The appeal should accordingly be upheld on this ground. The point in limine that
the AOD is unlawful and void for want of registration under the NCA cannot be
sustained and falls to be dismissed.
The remaining defences
[28] The disposal of the NCA point in limine does not, however, dispose of the
application. Three further matters raised by the respondents, and not determined by the
7 Paulsen and Another v Slip Knot Investments 777 (Pty) Ltd 2015 (3) SA 479 (CC) paras 2, 11 and 100-
103.
court a quo, remain live. It is trite that a court, in giving judgment, must engage with the
issues genuinely raised by the parties and provide reasons that demonstrate this
engagement.8 While a court need not traverse every subordinate argument, it may not
leave a properly raised and potentially dispositive issue undetermined. Moreover, our
courts have consistently discouraged the piecemeal disposal of disputes.9
[29] In argument, counsel for the appellant submitted that this court should finally
determine these three issues on the existing papers. The parties had exchanged
founding, answering and replying affidavits, and, in counsel’s submission, neither the in
duplum defence nor what counsel termed the “ambiguous ancillary defences” was
capable of altering the outcome of a successful appeal. I do not accept that submission,
at least in relation to the third respondent’s suretyship. Where a respondent’s affidavit
raises a specific and particularised denial that she executed the very document said to
found her personal liability, that is not a dispute this court can resolve simply by
preferring one affidavit to the other; it is precisely the kind of dispute, going to the
authorship of a signature and incapable of resolution on paper alone, for which referral
to oral evidence, rather than final adjudication on the papers, is the appropriate
course.10 Similar considerations, explained below, apply to the quantum properly owing
once the in duplum rule is applied, and to the propriety of transfer rather than payment.
The suretyship of the third respondent
[30] The founding affidavit alleges that the third respondent signed the AOD
personally and thereby bound herself as surety and co -principal debtor. The answering
affidavit denies this unequivocally. The second respondent states that the third
respondent “has not signed any agreement with the Applicant or on behalf of the First
Respondent” and “ has never consented to being a surety and a co -principal debtor ”.
Respondent” and “ has never consented to being a surety and a co -principal debtor ”.
This is not a bare denial devoid of particularity. It is a specific, factual dispute as to
whether the third respondent executed the document on which her personal liability is
said to rest. Such a dispute cannot be resolved on the papers, and Baletsema , as the
party seeking final relief against the third respondent, bears the consequences of having
proceeded by application in the face of a real and foreseeable dispute of this kind.11
The in duplum rule
[31] With the NCA point in limine disposed of, the statutory in duplum provision in s
103(5) of the NCA does not apply, as the Act does not apply to this agreement. The
common law in duplum rule nevertheless applies with full force, and operates
independently of any contrary contractual term. Once unpaid interest equals the
8 Mphahlele v First National Bank of SA Ltd 1999 (2) SA 667 (CC) para 12; Strategic Liquor Services v
Mvumbi NO and Others 2010 (2) SA 92 (CC) para 15.
9 Cyril and Another v CSARS [2024] ZASCA 32 para 10.
10 Wightman t/a JW Construction v Headfour (Pty) Ltd and Another 2008 (3) SA 371 (SCA) para 13.
11 Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA 623 (A) at 634E-635C.
outstanding capital, interest ceases to run, both before and during litigation. 12 On the
figures reflected in the certificate of balance, interest of R725 760 had accrued against a
capital sum of R1 209 600 as at 31 August 2023 and had not yet reached parity with the
capital. It is common cause, however, that further interest continued to be claimed after
that date, up to and beyond the hearing before the court a quo on 18 October 2024,
some eighteen months after the AOD was signed. Whether, and at what point, the
accrued interest reached the capital amount, and what amount is accordingly now
recoverable, requires a proper accounting which the papers before this court do not
permit. This question, too, must be determined on further evidence.
Transfer of the immovable property and unjust enrichment
[32] The respondents’ answering affidavit raises, with reasonable particularity, a
defence that transfer of the immovable property, as opposed to a money judgment,
would unjustly enrich Baletsema , given the disparity alleged between the property’s
value and the debt. Although clause 4.1 of the AOD records the parties’ agreement that
the property’s value was not disproportionate to the debt, the second respondent’s
affidavit disputes this, asserting that no valuation was obtained before he signed the
AOD, and that he did not appreciate that clause 4.2 departed from the sale -and-
recovery mechanism of the original loan agreement. Coupled with the unresolved
application to introduce a valuation report reflecting a materially higher value than the
debt, this raises a genuine and material dispute of fact as to whether specific
performance in the form of transfer, rather than payment, is relief this court, sitting in
application proceedings, ought to grant.
[33] In anticipation of an equity-based answer to the claim for transfer, counsel for the
appellant submitted, first, that any such answer is foreclosed by the principle of pacta
appellant submitted, first, that any such answer is foreclosed by the principle of pacta
sunt servanda, which gives effect to the constitutional values of freedom and dignity and
continues to inform the judicial control of contracts through the instrument of public
policy.13 Counsel submitted, in the further alternative, that the line of authority permitting
a court to intervene where a pactum commissorium would otherwise entitle a creditor to
retain pledged property on a debtor’s default has no application here, since that
authority concerns pledges of movable property. 14 In contrast, the immovable property
in issue cannot be pledged, and Baletsema , in any event, approaches this court for an
order under judicial supervision rather than by way of self -help. These are substantial
submissions, but it is unnecessary to resolve them at this stage. Whether transfer or
payment is the appropriate remedy turns, for the reasons already given, on disputed
12 Standard Bank of SA Ltd v Oneanate Investments (Pty) Ltd (In Liquidation) 1998 (1) SA 811 (SCA) at
828.
13 Beadica 231 CC and Others v Trustees for the Time Being of the Oregon Trust and Others 2020 (5) SA
247 (CC); [2020] ZACC 13 para 83.
14 Bock and Others v Duburoro Investments (Pty) Ltd 2004 (2) SA 242 (SCA) para 8; Graf v Buechel 2003
(4) SA 378 (SCA) paras 9-11.
facts concerning the property’s value relative to the debt, which fall to be determined on
oral evidence together with the other matters identified above.
[34] Baletsema elected motion proceedings notwithstanding that its own notice of
motion sought, in the alternative to payment, an order compelling transfer of immovable
property said in the same papers to have a value not disproportionate to a debt of just
over R1,2 million. A dispute of this kind, concerning equitable relief over land, was
reasonably foreseeable at the outset.15
Disposition
[35] Given the disputes identified in paragraphs 31 to 35 above, it would not be
appropriate for this court to grant final relief, whether in the form sought by Baletsema in
its notice of appeal or otherwise, without those disputes first being resolved. The proper
course, where the court a quo disposed of the matter entirely on a point in limine that
cannot be sustained, is to uphold the appeal, set aside the order of the court a quo,
dismiss the point in limine relied upon, and refer the remaining disputes of fact to oral
evidence.
[36] I emphasise, since the respondents did not contest liability for the underlying
debt as such (the second respondent having admitted signing both the loan agreement
and the AOD, and having admitted Phek Engineering’s default), that this order should
not be read as suggesting the appellant’s claim lacks substance. It is only the quantum
recoverable, the extent of security available in the form of the third respondent’s
suretyship, and the appropriateness of transfer, as opposed to payment, as the ultimate
remedy, that remain to be determined.
Costs
[37] The appeal succeeds on the central ground advanced by the appellant,
notwithstanding that final relief is not granted at this stage. Costs should follow the
result. Baletsema’s notice of appeal seeks costs of the appeal, and costs of the
application in the court a quo, on the attorney and client scale. The costs of the
application in the court a quo, on the attorney and client scale. The costs of the
application a quo are , for the reasons already given, reserved for determination by the
court hearing the oral evidence, once the merits are finally known, and it is neither
necessary nor appropriate to fix the scale of those costs now. As to the costs of the
appeal, an attorney and client costs order is a punitive measure, reserved for cases
where a litigant has been guilty of dishonesty, vexatious conduct, or other conduct
deserving of the court’s censure. The respondents’ opposition to this appeal, though
ultimately unsuccessful on the central point, raised an argument that was reasonably
arguable on the papers. Nothing in the record justifies departing from the ordinary rule.
The costs of the appeal should accordingly be awarded on the ordinary party and party
scale.
15 Room Hire Co (Pty) Ltd v Jeppe Street Mansions (Pty) Ltd 1949 (3) SA 1155 (T) at 1162-1163.
Order
[38] In the result, the following order is made:
1. The appeal is upheld.
2. The order of the court a quo is set aside and substituted with the following
order:
2.1 The point in limine that the acknowledgement of debt dated 6 April
2023 constitutes an unlawful and void credit agreement for want of
registration under the National Credit Act 34 of 2005 is dismissed.
2.2 The following issues are referred to the hearing of oral evidence in
terms of Uniform Rule of Court 6(5)(g):
2.2.1 whether the third respondent executed the acknowledgement of debt
dated 6 April 2023 and thereby bound herself as surety and co -principal
debtor;
2.2.2 the amount, if any, presently owing by the first and second
respondents to the appellant, after due application of the common law in
duplum rule;
2.2.3 whether an order directing transfer of the immovable property
described in the acknowledgement of debt, as opposed to an order for
payment, is appropriate relief, having regard to the value of the property
relative to the amount found to be owing.
2.3 The respondents’ application to introduce further evidence on appeal is
to be determined, together with any further evidence on the value of the
immovable property, by the court hearing the oral evidence directed in
paragraph 2.2 above.
2.4 The costs of the application in the court a quo are reserved for
determination by the court hearing the oral evidence directed in paragraph
2.2 above.
3. The first, second and third respondents shall pay the costs of the appeal, on
the party and party scale, Scale B, jointly and severally, the one paying the other
to be absolved.
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A H PETERSEN
JUDGE OF THE HIGH COURT
NORTH WEST DIVISION, MAHIKENG
I agree.
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M WESSELS
ACTING JUDGE OF THE HIGH COURT
NORTH WEST DIVISION, MAHIKENG
I agree.
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T TSAUTSE
ACTING JUDGE OF THE HIGH COURT
NORTH WEST DIVISION, MAHIKENG
APPEARANCES
For the Appellant: Adv J C Viljoen
Instructed by: Cronje Attorneys Inc, Kempton Park,
c/o Maree & Maree Attorneys, Mahikeng
For the Respondents: Adv T M Makgatho
Instructed by: Gumbo & Co Inc, Mahikeng,
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c/o Gura Tlatetsi Inc, Mahikeng
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