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IN THE HIGH COURT OF SOUTH AFRICA
(GAUTENG DIVISION, PRETORIA)

REPUBLIC OF SOUTH AFRICA

(1)      REPORTABLE:       NO

(2)      OF INTEREST TO OTHER JUDGES:      YES/NO

(3)      REVISED

           DATE:     15 SEPTEMBER 2021

Case Number: 14146/2020

DIRK JACOBUS VAN DER MERWE	First Excipient/Plaintiff
EMMARENTHEA PETRONELLA VAN DER MERWE	Second Excipient/Plaintiff
And
JOHANNES PETRUS CRONJE	Defendant

JUDGMENT

JANSE VAN NIEUWENHUIZEN J

[1]           This is an exception taken by the plaintiffs against the defendant’s plea on the grounds that the plea is vague and embarrassing.

 

Cause of action

[2]           The plaintiffs and the defendant entered into a sale agreement in terms of which the plaintiffs sold their immovable property to the defendant.

 

[3]           The parties, furthermore, entered into four loan agreements, in terms of which the defendant loaned and advanced monies to the plaintiffs.

 

[4]           The sale agreement is in Afrikaans and the relevant portions of the agreement, loosely translated, reads as follows:

“2.      PURCHASE PRICE

The purchase price is the amount of R 1 973 863, 84 (One million nine hundred and seventy-three thousand eight hundred and sixty-three rand and forty-eight cent) VAT inclusive and is payable as follows:

2.1      The sellers confirm that the amount of R 1 243 863, 84 has already been paid, which amount consists of loans and interest due to the purchaser in the amount of R 1 238 702, 84 together with the legal fees in the amount of R 1 561,00.”

 

and

 

“13.    SPECIAL CONDITION

          The parties agree that should the sellers pay the amount of R 1 238 702, 84 (One million two hundred and thirty eight thousand seven hundred and two rand and eight four cent) plus 10% interest per year calculated from 11 October 2017 up and until date of final payment, plus legal fees in the amount of R 1 561,00 (One thousand five hundred and sixty one rand) plus the bond cancellation fees of R 3 500, 00 (Three thousand five hundred rand) prior to the date of registration into the trust account of Roeland & Booysen Inc, the conveyancers will immediately stop the transfer and the agreement will be cancelled.”

 

[5]           The plaintiffs allege that the loan agreements constitute credit agreements and that the provisions of the National Credit Act, 34 of 2005 (“NCA”) is applicable to the agreements.

 

[6]           In the premises, the defendant had to comply with the peremptory provisions of, inter alia, sections 40(1) and 81(2) of the NCA prior to the conclusion of the agreements.

 

[7]           The defendant failed to comply with the aforesaid provisions and as a result, the agreements are:

7.1       in terms of section 89(2)(d), unlawful;

7.2       in terms of section 89(5) void ab initio; and

7.3       unenforceable.

[8]           The plaintiffs allege that the causa and sole reason for the conclusion of the sale agreement was to provide a manner in which the plaintiffs could repay their loans. In the premises, the sale agreement must follow the same fate as the loan agreements.

 

Plea and exception

First exception

[9]           The defendant admits the conclusion of the loan agreements but denies that the agreements are subject to the NCA. The defendant pleads that the agreements are exempted from the provisions of the Act, because the plaintiffs were at the time of the conclusion a juristic person as contemplated in section 4(1)(a)(i) of the NCA.

 

[10]        The plaintiffs’ exception against the aforesaid averment is two-fold:

10.1    Firstly, that the averment is in direct contradiction to the admission of the plaintiffs’ citation in the particulars of claim and agreements, which citation clearly states that the plaintiffs are natural persons and entered into the agreements in their capacity as such; and

10.2    Secondly, that the averment fails to disclose the identity of the alleged “juristic person”.

 

[11]        In order to consider the exception, it is apposite to have regard to the relevant provisions of the NCA. Section 4(1)(a)(i) reads as follows:

“4(1)   Subject to sections 5 and 6, this Act applies to every credit agreement between parties dealing at arm’s length and made within, or having effect within, the Republic, except-

(a)  A credit agreement of which the consumer is-

(i)            A juristic person whose asset value or annual turnover, together with the combined asset value or annual turnover of all juristic persons, at the time the agreement is made, equals or exceeds the threshold value determined by the Minister in terms of section 7(1);”

 

[12]        “Juristic person” is defined in section 1 as follows: “includes a partnership, association or other body of persons, corporate or unincorporated, or a trust if….”

 

[13]        I agree with Mr Kruger, counsel for the applicants, that there is a clear and glaring contradiction between the admission that the plaintiffs are natural persons and the averment that they are a “juristic person”

 

[14]        Furthermore, the averment that the plaintiffs are a “juristic person” without pleading the basis for such averment, renders the averment vague and embarrassing.

 

[15]        To his credit Mr Matthee, counsel for the defendant, did not seriously contend otherwise.

[16]        In the premises, the first exception must succeed.

 

Second exception

[17]        The second exception pertains to the alternative basis for the defendant’s denial that the NCA is applicable to the loan agreements. In this respect, the defendant pleaded that the NCA is not applicable, because the parties are “not independent of each other”.

[18]      The averment is premised on the wording of section 4(1) of the NCA and more specifically the portion that provides that the NCA is only applicable to agreements at arm’s length. Section 4(2)(b) deals with agreements that are not at arm’s length and section 4(2)(b)(iv)(aa) exempt an agreement from the NCA in circumstances where “each party is not independent of the other and consequently does not necessarily strive to obtain the utmost possible advantage out of the transaction; or ….”

 

[19]        The plaintiffs’ complaint is directed at the defendant’s failure to disclose the nature and extent of his alleged dependence on the plaintiffs, as well as the nature and extent of the plaintiffs’ dependence on him.

 

[20]        Mr Kruger submitted that the defendant’s aforesaid failure renders the averment vague and embarrassing.

[21]        Mr Matthee, however, pointed out that the defendant pleaded the following in amplification of the aforesaid averment:

“8.7    The Plaintiffs and the Defendant are well known to each other and were close and intimate friends for approximately 20 years.

8.8     The Defendant has loaned out amounts to the Plaintiffs on their instance and request since approximately 2010.

“8.9    The loan was not provided to the Plaintiffs with the intention to obtain the utmost commercial gain and the interest rate to be paid in the amount of R 438, 64 was to defray the banking costs and the interest that the Defendant would lose in paying over the amount to the Plaintiffs for the period as agreed.

8.10    Accordingly the loan was not made at arm’s length.”

 

[22]        I am of the view that the aforesaid allegations amplify the averment to such an extent that the averment is not vague and embarrassing.

 

[23]        To his credit Mr Kruger did not seriously persist with the second exception.

 

[24]        In the premises, the second exception cannot succeed.

 

Costs

[25]        Mr Kruger submitted that the plaintiffs were substantially successful and are entitled to a cost order.

[26]        Mr Matthee did not agree. Mr Matthee submitted that each party was equally successful and that each party should pay its own costs.

 

[27]        Mr Matthee’s submission would have been more attractive if the defendant conceded the first exception and only proceeded to oppose the second exception. This he did not do. The defendant persisted in opposing both exceptions, which left the plaintiffs with no other choice than to proceed with the application.

 

[28]        In the result, I am of the view that the plaintiffs are entitled to their costs and such an order will follow.

 

ORDER

[29]        In the premises, I grant the following order:

1.    The first exception is upheld and the defendant is afforded a period of ten (10) days to amend his plea.

2.    The defendant is ordered to pay the costs of the application.

 

 

N. JANSE VAN NIEUWENHUIZEN

JUDGE OF THE HIGH COURT OF SOUTH AFRICA

GAUTENG DIVISION, PRETORIA

DATE HEARD PER COVID19 DIRECTIVES:                     30 August 2021

(Virtual hearing.)

DATE DELIVERED PER COVID19 DIRECTIVES:           15 September 2021

 

APPEARANCES

Counsel for the Excipients/Plaintiffs:                                Advocate J.E. Kruger

Instructed by:                                                                     Kok & Van Staden Attorneys

 

Counsel for the Defendant:                                                Advocate J.D. Matthee

Instructed by:                                                                     Booysen Attorneys

 

 

 

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