First Rand Bank Limited v Stapelberg (5147 / 2019) [2021] ZAMPMHC 31 (29 November 2021)

THE

HIGH COURT OF SOUTH AFRICA

MPUMALANGA DIVISION, MIDDELBURG LOCAL SEAT

CASE NO: 5147 / 2019

REPORTABLE:

NO

OF INTEREST TO OTHER JUDGES: NO

REVISED.

29 November 2021

In the matter between:

FIRST

RAND BANK

LIMITED

APPLICANT

and

JOHAN

CHRISTOFEL CAREL STAPELBERG

RESPONDENT

J

U D G M E N T

RATSHIBVUMO J:

Delivered: This judgment was handed down electronically by circulation to the parties' representatives by email. The date and time for hand-down is deemed to be 10H00 on 29 November 2021.

Introduction.

[1] This is an application for monetary judgment based on a loan agreement that was entered between the Applicant and the Respondent on 15 February 2017. While the Respondent’s indebtedness to the

Applicant and the amount thereof remains undisputed, the application is opposed for reason that the Respondent was unduly influenced and/or was under duress when he entered into the credit agreement with the Applicant. For that reason, the Respondent submits that the application should be dismissed. In the alternative, the Respondent submits that the application should be referred to oral evidence in that there is dispute of fact on whether the respondent was unduly influenced or not.

[2] The Applicant denies that the Respondent was unduly influenced or that he was under duress when he entered into an agreement with the Applicant. It is further denied by the Applicant that there is dispute of fact warranting the matter to be referred to oral evidence.

[3] A similar application was launched by the Applicant against the Respondent in 2018 under case no. 445/2018 (the First application). That application was withdrawn following a payment by the Respondent

of a substantial amount which had the effect of reinstating the credit agreement. In this application, the Applicant prays for costs incurred in the First application. Both parties agreed that the costs in the First application should follow the cause in this application.

Points in limine.

[4] When the matter came before this Court for hearing on 18 November

2021, two points in limine were disposed of before dealing with the main application. Firstly, was an application for acceptance of a further affidavit by the Applicant in terms of Rule 6(5)(e) of the Uniform Rules which was not opposed by the Respondent. The affidavit in question forms the basis for the amendment to the notice of motion in that the amount claimed is recalculated to accommodate concerns raised by the Respondent. The application was granted with no order as to costs.

[5] Secondly, was the application for condonation of the late filing of the replying affidavit by the Applicant. Counsel for the Applicant took responsibility for the late filing owing to his busy schedule, the impact of Covid-19 regulations and directives to his office and some family emergencies at the time. This application was opposed by the Respondent who submitted that the reasons were not good enough to ignore the time lines set by the Rules. While the court does not condone failure to adhere to the times lines set in the Rules, it was however of a view that the litigant should not be prejudices due to commitments of a legal representative. It also concluded that the respondent suffers no prejudice if the late filing of the replying affidavit is allowed. For these reasons, the court concluded that the interests of justice demand that the condonation be allowed.[1] The condonation was as such granted with costs.

Background.

[6] Facts of this case are largely undisputed. The dispute lies in the

interpretation of those facts. Towards the end of 2016 and prior to entering into a credit agreement referred to above, the Respondent

had applied for a loan of R4.5 million in order to purchase two farms from Mr. Oosthuizen. The Respondent was informed by the Applicant

that his loan application would be approved and as such, he moved into the farms and started his farming duties. Mr. Oosthuizen on the other hand vacated the farms to start a business franchise with Wimpy in Pretoria. For this business to get off the ground, the proceeds of sale of the farm would come in handy.

[7] Moments after he moved into the farms, the Respondent was informed by the Applicant that his loan application to purchase the farms was unsuccessful. He was however offered a R3 million loan to purchase one of the two farms. He accepted this loan offer and entered into credit agreement. He alleges that his negotiating capabilities were weakened and he ended up signing a credit agreement with several conditions not favourable to him.

[8] What made the Respondent to anticipate the approval of his loan application was in the main, the cell phone text message sent to Mr. Oosthuizen by Mr. Holtzhausen, the Applicant’s representative

attached to the Witbank Branch, sent on 20 December 2016. The message read,

“Good morning uncle Pieter. I apologise for only now sending this message to you. We could not get cell phone roaming in Namibia. I am now back. I will arrange that a non-retractable guarantee be issued if registration does not take place before month end. I am at the office today and will provide a progress report to you. Greetings.”[2]

[9] The Applicant explains that the guarantee was necessary in order for Mr. Oosthuizen to start with his business in Pretoria. I have few concerns with the frustrations that the Respondent attributes to the message above. First, he fails to demonstrate how he would have had an upper hand in negotiating the terms of a credit agreement had his loan application for R4.5 million been approved as he envisaged. Secondly, he fails to demonstrate the conditions that would have been attached to that credit agreement, or at least, how they vary from those finally attached to the one he signed. I am unable to find that any of the conditions attached to the loan agreement the Respondent finally entered into, is demonstrably favouring the Applicant to the Respondent’s detriment. To me, they appear to be standard conditions to credit agreements of this nature.

[10] Even if hypothetically speaking it is accepted that the loan approval in the amount of R4.5 million would have put the Respondent in a better negotiating position, I do not see how this message not directed to him but to Mr. Oosthuizen would make him believe that the loan was approved, while an official letter from the Applicant to Mr. Oosthuizen, signed by the same Mr. Holtzhausen does not confirm that. That letter dated 21 November 2016 read,

“We are pleased to advise that FNB Business (“the Bank”), a division of FirstRand Bank Limited has approved in principle a FNB Agricultural loan of which R4.500 000 (Four million five hundred Rand) will be utilised for the purchase of the above mentioned property upon signing of applicable Facility letters. Kindly note that the loan is subject to final credit approval and we reserve the right to withdraw our approval should any new or previously undisclosed fact emerge or should there be a change of circumstances which may prejudice the rights of the Bank.”[3] [My emphasis].

[11] It is common cause that when applying for the loan, the Respondent gave out the total value of the two farms to be R5.5 million. The farms were later evaluated by the experts and found to be way below the value presented by the Respondent in his application.[4] It is also common cause that the Respondent when applying for the loan, he did not disclose that his residential house (to be used as security) was actually co-owned by him and his ex-wife and that there was a bond registered against it in the amount of R600 000.00.

This was only unearthed by the Applicant on 10 January 2017.[5]

[12] It is apparent from the above that the Applicant approved the loan application in principle and subject to stipulated conditions. When these conditions were not met, the Applicant exercised its expressed reserved right by withdrawing the approval that was granted in principle. The non-approval of the R4.5 million and the approval of R3 million instead, could not have come as a shock to the Respondent as he knew well that he did not disclose to the Applicant that he was

not the sole owner of his house, and that the withdrawal came after the evaluation of the property by the Applicant in which the values he had presented were disproved.

[13] Moreover, it is the Respondent’s case that his legal representative, Mr. Schutte, communicated with Mr. Holtzhausen on several occasions including on 29 December 2016, asking if the loan was approved. Mr. Holtzhausen responded saying,

“Just waiting for the documents to sign. As soon as I have them I will draft a list for you regarding the way forward. I am really pushing for us to finish and to be able to quickly register.”[6]

[14] If the loan had been approved by then, there would be no need for Mr. Holtzhausen to be “really pushing for us finish and to be able to quickly register…” when asked if the loan application was approved. It is also the Respondent’s case that he together with Mr. Holtzhausen and his attorney, Mr. Schutte, were in a meeting in December 2016 in which Mr. Schutte again asked if the loan was approved. Mr. Holtzhausen indicated that while the loan application was successful, it awaited a final signature.[7] If the Respondent had an impression that the loan was already approved, he had an opportunity to know in this meeting that the

final signature was not a rubber stamp to a done deal, but an approval by whoever appends it.

[15] To accept that the Respondent believed that the loan application was approved on 20 December 2016 and yet, in January 2017 his legal representative was still enquiring on his behalf if the loan was approved, defies logic. As a result, I cannot find that the Applicant misrepresented the facts or that in granting a loan to the Respondent

in the amount lesser than the amount he had applied for, prejudiced him in any manner, which prejudice can be attributed to the

Applicant.

[16] The Respondent’s reliance on BOE Bank Bpk v Van Zyl[8]is in my view, misplaced. In that matter, the Respondent had challenged the validity of a contract in which he stood as surety, stating that he signed the contract after he was threatened with the arrest and prosecution of his son in law. The court of appeal was not convinced that there was threat or duress when the Respondent was even allowed a day to think about it and only came back the following day to sign as surety. The position was captured well in Experian South Africa (Pty) Ltd v Haynes and Another[9] when Mbha J said,

“The law is clear: a contract concluded as a result of duress can be assailed. In BOE Bank Bpk v Van Zyl (supra) para 36 the court reaffirmed that the party wishing to rely on duress in order to set aside a contract must allege and prove that there was a threat of considerable evil to the person concerned, or to his or her family, such as to induce a reasonable fear of an imminent or inevitable evil; that the threat or intimidation was unlawful or contra bonos mores; and the moral pressure used must have caused damage.”

[17] In casu, the Respondent was not threatened into signing a credit agreement. Instead, he was given an offer and he chose to sign it voluntarily. What forced him into signing an agreement even when the conditions were not favourable to him is what forces every borrower to approach the bank for a loan which is the need to be financed. If he had enough cash, he would not have approached the bank and so is the case with every borrower due to their need for funds. The bank on the other hand, is determined to make profit through every credit agreement entered into. To inform an applicant that he did not qualify for a loan of R4.5 million but only R3 million is no threat and does not consent given invalid for lack of voluntariness.

[18] In light of the position I adopt in this case, the question on whether the challenge to this credit agreement has prescribed in view of the years that lapsed from the date a credit agreement was signed, does not arise and requires no further determination. I also find that there is no dispute of fact and that to the extent that there could be any dispute between the version of the Applicant and that of the Respondent, this case can be decided on the version of the Respondent. There is therefore no need to refer this to oral evidence. My view is that such an averment is an attempt to buy time on the part of the Respondent. In reaching this conclusion, I take cue from the SCA decision in National Director of Public Prosecution v Zuma[10] when it held,

“Motion proceedings, unless concerned with interim relief, are all about the resolution of legal issues based on common cause facts. Unless the circumstances are special they cannot be used to resolve factual issues because they are not designed to determine

probabilities. It is well established under the Plascon-Evans rule that where in motion proceedings disputes of fact arise on the affidavits, a final order can be granted only if the facts averred in the applicant's affidavits, which have been admitted by the respondent, together with the facts alleged by the latter, justify such order. It may be different if the respondent's version consists of bald or uncreditworthy denials, raises fictitious disputes of fact, is palpably implausible, far-fetched or so clearly untenable that the court is justified in rejecting them merely on the papers.”

[19] Consequently, the following order is made:

[19.1] Judgment is granted in favour of the Applicant against the Respondent for:

[19.1.1] Payment of the sum of R3 278 966.15.

[19.1.2] Payment of interest on the amount of R3 278 966.15 at the prime rate (currently 7.00%) plus 6% per annum compounded monthly and calculated from 02 November 2020 until the date of payment.

[18.2] The Respondent is ordered to pay the costs of this application and costs incurred in the First application (case no. 445/2018), as agreed between the parties.

TV

RATSHIBVUMO

JUDGE

OF THE HIGH COURT

FOR

THE APPLICANT

:

ADV L MEINTJIES

INSTRUCTED BY

: RWL INC

C/O GFT

PISTORIUS INC

MIDDELBURG

FOR

THE RESPONDENT

: MR. DPA SCHUTTE

INSTRUCTED BY

: KARIEN SCHUTTE ATTORNEYS

DATE

HEARD

: 18 NOVEMBER 2021

JUDGMENT

DELIVERED

: 29 NOVEMBER 2021

[1] Smith NO v Brummer NO; Smith NO v Brummer 1954 (3) SA 358 (O).

[2] See the respondent’s answering affidavit on p. 486 para 4.7

[3] See a letter from the Applicant marked MJ19 on p. 338.

[4] See p. 249 – 254 [par 19 – 21] read with Annexure MJ12 on p. 323 – 324.

[5] See p. 360, Annexure MJ23.

[6] See respondent’s answering affidavit at p. 487.

[7] See respondent’s answering affidavit at p. 488.

[8] 2002 (5) SA 165 (C).

[9] 2013 (1) SA 135 (GSJ) at para 32.

[10] [2009] ZASCA 1; 2009 (2) SA 277 (SCA) at para 26.