Megafreight Services (Pty) Ltd v Lombard Insurance Company Limited and Another (82748/14) [2015] ZAGPPHC 650 (11 September 2015)

IN THE HIGH COURT OF SOUTH AFRICA

(GAUTENG DIVISION, PRETORIA)

CASE NUMBER: 82743-2014

DATE: 11/9/2015

In the matter between:

MEGAFREIGHT SERVICES (PTY) LTD

APPLICANT

and

LOMBARD INSURANCE COMPANY LIMITED

FIRST RESPONDENT

TRANSNET PORT TERMINALS

SECOND RESPONDENT

JUDGEMENT – LEAVE TO APPEAL

TLHAPI J

[1] This in an application for leave to appeal a judgment delivered on 24 March 2015. Although several grounds were mentioned, the main issue revolved around the meaning of a document issued by the first respondent and described in the papers as PM1, whether this document stood as a Deed of Suretyship or a Guarantee. Mr Pillay for the second respondent contended that the determination of what the document represented was a factual one, that there was a clear dispute on the papers as to what PM1 was intended to be by the parties.

[2] He referred to other documents ‘RA 2’ (an email from the applicant), ‘RA4’ (application for a guarantee) and ‘PM5’ (the tariff annexure) as proof that the applicant had always intended or understood that PM1 was meant to stand as a guarantee. Mr Maritz for the applicant contended that what was of importance was to ask what the first respondent intended the document to be and that this could only be determined by looking at the document itself, that terms in the document identified it as a contract of Suretyship.

[3] ‘PM1’ states that Lombard Insurance Company binds itself as the ‘Guarantor unto and in favour of Transnet... as Surety for and Co-principal debtor in solidum with Megafreight ...as the Debtor for due payment of every sum owing by the debtor to Transnet out of a credit account agreement entered into between the Debtor and Transnet and to which this guarantee becomes and annexure .....We....on behalf of the Guarantor, hereby renounce the benefits of the legal exceptions of excussion....... etc (My underlining) It is not in dispute that the applicant had a number of credit facilities with the second respondent. ‘PM5’ is not the credit account agreement referred to in ‘PM1’and in terms of this document the applicant is but an agent of the principal debtor African Star Minerals which is not mentioned in the Deed of Suretyship. The Deed of Suretyship was signed on 6November 2013, which date predated the signing of PM5. PM5 was signed on different dates during December 2013 by the parties agreeing to it.

[4] Mr Pillay contended that the judgment suggested that it was necessary for the second respondent to have claimed rectification and he relied on the decision in Gralio (Pty) Ltd v D E Classen (Pty) Ltd 1980 (1) 816 (A) in which it was held that it was not necessary to claim rectification. At page 824 Miller JA stated:

“The upholding of the defendant’s plea that the escalation clause agreed upon was inaccurately rendered in the written contract would not have the effect of constituting a new contract, separate and distinct from that upon which the plaintiff relied; it would merely serve to correct an inaccuracy in the contract relied upon by plaintiff. Indeed (leaving aside cases in which the contract is by law required to be in writing), a defendant who raises the defence that the contract sued upon does not correctly reflect the common intention of the contract; it is sufficient if he pleads the facts necessary to entitle him to rectification and asks the Court to adjudicate upon the basis of the written contract relied upon by plaintiff as it stands to be corrected”

Mr Marits contended that what was required was for the second respondent to have alleged the facts upon which the deed stood to be rectified which was not done. In his heads of argument in the application he stated the following:

“At best for the second respondent, it may be that there was a common error between the applicant, the first respondent and the second

respondent as to the principal debt and the identity of the principal debtor, but in the absence of a contention by the second respondent that the Deed of Surety stands to be rectified, any evidence at variance with the express terms of the Deed of Suretyship is inadmissible”

I am therefore not persuaded that there are reasonable prospects of success on appeal.

[5] In the result the following order is given.

1. The application for leave to appeal is dismissed with costs which include costs of senior counsel.

_________

TLHAPI VV

(JUDGE OF THE HIGH COURT)

MATTER HEARD ON

: 02 SEPTEMBER 2015

JUDGMENT RESERVED ON

: 02 SEPTEMBER 2015

ATTORNEYS FOR THE

: SHEPSTONE & WYLIE ATT.

ATTORNEYS FOR THE RESPONDENTS : POSWA INC