Paulsen v Slip Knot Investments (434/2013) [2014] ZASCA 16; [2014] 2 All SA 527 (SCA); 2014 (4) SA 253 (SCA) (25 March 2014)

Paulsen v Slip Knot Investments (434/2013) [2014] ZASCA 16; [2014] 2 All SA 527 (SCA); 2014 (4) SA 253 (SCA) (25 March 2014)

The Supreme Court of Appeal held that the National Credit Act does not apply to large credit agreements with juristic persons whose asset value or turnover exceeds the statutory threshold, and therefore the agreement and suretyships were not void for non-registration of the credit provider. The court found that the interest stipulated in the agreement was properly characterised as interest and not profit share. Applying the in duplum rule, the court held that interest recoverable prior to litigation was limited to the capital amount, but that interest could accrue again after the commencement of litigation and after judgment, up to the duplum. The accessory nature of suretyship did not...

Citation
[2014] ZASCA 16
Parties
Appellant: André Francois Paulsen; Appellant: Margaretha Elizabeth Paulsen; Respondent: Slip Knot Investments 777 (Pty) Limited
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
25 March 2014
Case Number
434/2013
Procedural Posture
Civil Appeal / Supreme Court of Appeal Judgment on Appeal and Cross Appeal
Outcome
Appeal dismissed with costs; cross-appeal upheld with costs; amended order granted limiting and specifying interest recoverable.
Judges
MPATI, SHONGWE, WALLIS, WILLIS, MATHOPO
Legal Topics
National Credit Act, Suretyship, In Duplum Rule, Mezzanine Finance, Interest Limitation
Commercial and Corporate Civil Procedure National Credit Act Suretyship In Duplum Rule Mezzanine Finance Interest Limitation

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 4 Authorities cited 17 Party arguments 2 Amounts and remedies 3
Sign in to unlock

Parties

André Francois Paulsen

Appellant

Margaretha Elizabeth Paulsen

Appellant

Slip Knot Investments 777 (Pty) Limited

Respondent

Procedural Posture

Civil Appeal / Supreme Court of Appeal Judgment on Appeal and Cross Appeal

Legal Issues

  1. 1 Does the National Credit Act 34 of 2005 render the credit agreement and suretyships void due to non-registration of the credit provider?
  2. 2 Does the in duplum rule limit the interest recoverable under the loan agreement and suretyships?
  3. 3 Is the interest stipulated in the agreement properly characterised as interest or profit share?

Ratio Decidendi

The Supreme Court of Appeal held that the National Credit Act does not apply to large credit agreements with juristic persons whose asset value or turnover exceeds the statutory threshold, and therefore the agreement and suretyships were not void for non-registration of the credit provider. The court found that the interest stipulated in the agreement was properly characterised as interest and not profit share. Applying the in duplum rule, the court held that interest recoverable prior to litigation was limited to the capital amount, but that interest could accrue again after the commencement of litigation and after judgment, up to the duplum. The accessory nature of suretyship did not...

Court Disposition

Appeal dismissed with costs; cross-appeal upheld with costs; amended order granted limiting and specifying interest recoverable.

Orders

  • The appeal is dismissed with costs, including costs of two counsel.
  • The cross-appeal succeeds with costs, including costs of two counsel.