Cemblock (Pty) Ltd v Mmege Construction and Projects CC and Others (64838/18) [2019] ZAGPPHC 442 (20 August 2019)

Cemblock (Pty) Ltd v Mmege Construction and Projects CC and Others (64838/18) [2019] ZAGPPHC 442 (20 August 2019)

The court found that the National Credit Act does not apply to the underlying credit agreement or the Acknowledgement of Indebtedness (AOD) because the first respondent is a juristic person with an annual turnover exceeding R2 million and the transaction value exceeds R250,000. The relationship with the second respondent is a credit guarantee, which is excluded from the NCA if the underlying transaction is excluded. The AOD does not constitute a new credit agreement but merely affirms the existing indebtedness under the initial agreement. The respondents failed to provide factual grounds for the application of the NCA and relied on circular arguments. The applicant's case was accepted,...

Citation
[2019] ZAGPPHC 442
Parties
Applicant: Cemblock (Pty) Ltd; Respondent: Mmege Construction and Projects CC; Respondent: Mushi Somo; Respondent: The Rustenburg Local Municipality
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
20 August 2019
Case Number
64838/18
Procedural Posture
Civil Application / Judgment
Outcome
Application granted. The Acknowledgement of Indebtedness is made an order of court and respondents are ordered to pay the claimed amount with interest and costs.
Judges
NN Bam
Legal Topics
Acknowledgement of Debt, Suretyship, Applicability of National Credit Act, Credit Provider Registration, Settlement Agreements, Liquid Document
Commercial and Corporate Civil Procedure Acknowledgement of Debt Suretyship Applicability of National Credit Act Credit Provider Registration Settlement Agreements Liquid Document

Case Brief

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Parties

Cemblock (Pty) Ltd

Applicant

Mmege Construction and Projects CC

Respondent

Mushi Somo

Respondent

The Rustenburg Local Municipality

Respondent

Procedural Posture

Civil Application / Judgment

Legal Issues

  1. 1 Is the National Credit Act applicable to the underlying credit agreement and the Acknowledgement of Indebtedness (AOD)?
  2. 2 Does the AOD constitute a credit agreement subject to the NCA or merely affirm existing indebtedness?
  3. 3 Is the applicant required to be registered as a credit provider under the NCA for this transaction?

Ratio Decidendi

The court found that the National Credit Act does not apply to the underlying credit agreement or the Acknowledgement of Indebtedness (AOD) because the first respondent is a juristic person with an annual turnover exceeding R2 million and the transaction value exceeds R250,000. The relationship with the second respondent is a credit guarantee, which is excluded from the NCA if the underlying transaction is excluded. The AOD does not constitute a new credit agreement but merely affirms the existing indebtedness under the initial agreement. The respondents failed to provide factual grounds for the application of the NCA and relied on circular arguments. The applicant's case was accepted,...

Court Disposition

Application granted. The Acknowledgement of Indebtedness is made an order of court and respondents are ordered to pay the claimed amount with interest and costs.

Orders

  • The Acknowledgement of Indebtedness (AOD), annexure 'A', is made an order of court.
  • The first and second respondents are ordered to pay the applicant R617,621.36, jointly and severally, the one paying the other to be absolved, together with interest on R548,844.00 at prime plus 3% per annum, compounded monthly in arrears, from 11 August 2018 to date of final payment.